IRA Rules

Archive for the ‘IRA Rules’ Category

Question: No day trading in IRA Brokage account?

I have a Bank of American IRA brokage account and upon doing some buy and sale withint settlement date, i was put on a “free writing violation” restriction.

What is the settlement rule? if you buy something, you have to wait till 3 days later to sell? if you sell something, you can’t use that money to buy another item until 3 days later? this is very confusion

and what does the free writing restriction do to my account? the guy on the phone kept telling me i have a 90 days free writing restriction violation. I asked him, but i couldn’t understanding what he was trying to tell me.

thanks for your help

Answer: An IRA is NOT the place to be doing “day trading.” Yes, all brokerage transactions take three business days to settle. Read the IRA terms & conditions you agreed to when you opened the account.

The IRA try to buy some rocket launchers

Question: How much money should I have already saved at 28 years old?

What is the general rule of thumb? How much should I have saved in 401(k), Roth IRA, emergency funds, towards a down payment of a house, etc.

Answer: You should be bringing home at least your age. (take home pay)
And you should have one years salary (take home) in a savings account.
1/2 in a 401K – half in a savings for emergencies – car for cash – or down payment on house – wedding – honeymoon – etc.
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Inheriting an IRA or 401(k)

Question: Can someone please explain this detail of the 60-Day IRA Rollover rule?

I am under age 59 1/2.

I want to take an amount of cash from my IRA and do a “rollover” into another IRA. I understand that if I take a cash distribution I am subject to current taxes and a 10% penalty if I do not complete this rollover within 60 days. My question is this –

If I take the distribution in December, then complete the rollover (re-deposit the money) in January, what is my tax liability? This transaction will have taken place over two tax years; I will have to report the distribution on my 2011 1040, but I will not be able to report the rollover until 2012. How will this be handled?

If you do answer this and do give an opinion, I’d be grateful if you could link to the IRS ruling or some article that explains it to me.

Thanks

Answer: If you do a rollover, make sure you don’t leave your fingerprints on the money. Have a trustee to trustee transfer and you won’t have to worry about taxes on it until you start spending it.