IRA Rules

Question: I just graduated college and started a real full-time paying job. I now want to invest … HELP!?

I have been trying to learn as much as possible about everything from 401K’s to IRA’s to Stocks and Bonds … but it still all confuses me. If anyone can give me any advice, tips or pointers I would really appreciate it. I have not ruled out the idea of using a financial organization such as Fidelity or Charles Schwab. I just do not know what the next step is and the best option is for someone just out of college making entry level position salary. Any advice is good. Thanks!

Answer: Your best bet is to invest 6% into your 401K account immediately and througout your working career. Your company will match up to 6%, so why not get free money! As you get older, increase to 8% and this will accelerate your money’s growth. Typically, one who invests in 401K early, and works till 62, will have a 401 K account worth millions! You can also purchase some stock for you portfolio, however, you will need to do some research into what to buy so you don’t get burnt. I use Scottrade, and you can start an account with $800.00. Happy investing!

Investing & Personal Finance Tips : IRA MDA Rules

Question: Early IRA withdrawals for a house down payment?

My wife and I are getting ready to put a down payment on our first house, and I know that I can take a $10K withdrawal from a traditional IRA penalty-free. What I don’t know is, can my wife ALSO do this (we file jointly). Also, I know that there is a similar (but slightly different ) rule regarding Roth IRA’s. Does anybody know if I can do all three ($10K from my rollover IRA, $10K from my wife’s rollover, and $10K from my Roth)?

Answer: Your “taxpayer unit” (you AND your wife) can only take a maximum of $10,000 for the “first-time homebuyers exemption” from all of your Traditional IRA’s without being subject to the penalties.

You can also withdraw any amount of your Roth IRA that YOU HAVE CONTRIBUTED. For example, if you’ve got a Roth IRA that is worth $10,000, and you’ve contributed $7,500 and it has grown by $2,500 since you started it, you can withdraw the $7,500 that YOU contributed to it, any time, for any reason, without penalty. (This is one of the advantages of a Roth IRA vs. a traditional IRA).

Retirement Savings – IRA Withdrawals, Rules and Penalties

401k Rollover Don’t Leave It Behind