What is the Roth IRA five-year rule?

 

What is the Roth IRA five-year rule?Actually, there are two five-year rules you need to know about. The first five-year rule determines when you can begin receiving tax-free qualified distributions from your Roth IRA. Withdrawals from your Roth IRA–including both your contributions and any investment earnings–are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies:

  • You’ve reached age 59½ by the time of the withdrawal
  • The withdrawal is made due to a qualifying disability
  • The withdrawal is made for first-time homebuyer expenses ($10,000 lifetime limit)
  • The withdrawal is made by your beneficiary or estate after your death

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What is the Roth 401(k) five-year rule?

 

What is the Roth 401(k) five-year rule?The Roth 401(k) five-year rule determines when you can begin receiving tax-free qualified distributions from your 401(k) plan Roth account. While it’s similar to the five-year rule that applies to Roth IRAs, there are important differences.
 
Withdrawals from your Roth 401(k) plan account–including both your contributions and any investment earnings–are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies:

  • You’ve reached age 59½
  • You have a qualifying disability, or
  • The withdrawal is made by your beneficiary or estate after your death

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Prepaid Funeral Arrangements Can Have Grave Consequences

 

Prepaid Funeral Arrangements Can Have Grave ConsequencesAn important part of estate planning involves consideration of funeral or memorial arrangements, including paying for some or all of the costs in advance. Planning ahead not only spares your survivors from the stress of making these decisions, but prepaying for your services relieves your survivors from the burden of worrying about money during an otherwise difficult time.
 

Prepaid agreement

One way to prepay your funeral is by entering into a pre-need agreement with a funeral home of your choice. The funeral home may agree to “lock in” costs for future funeral or burial services at an agreed-upon price. This is often done through a trust or other arrangement that you can fund with cash, bonds, or life insurance. At your death, the funds are disbursed to pay for your funeral according to the terms of the agreement.
 
But before entering into a prepaid arrangement, you may want to get answers to the following questions:

  • What happens to the funds you’ve prepaid? How are they held? Do they earn interest? Are they safe?
  • What happens if the funeral home goes out of business? What protections, if any, do you have that your funds will be available when needed?
  • Can you cancel the agreement and, if so, are you able to receive a refund?
  • If you move, can your funds be transferred to another funeral home? Will the same terms apply? Is there a fee or cost to transfer your funds to another funeral home?

 
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Five Steps to Tame Financial Stress

 
Five Steps to Tame Financial StressDo you sometimes lie awake at night thinking about bills that need to be paid? Does it feel as though you’re drowning in debt? If this describes you, you might take solace in the fact that you’re not alone. A recent report released by the American Psychological Association (APA) showed that 72% of adults feel stressed about money at least some of the time, and 22% said the amount of stress they experienced was extreme.1
 
The bad news is that stress can be responsible for multiple health problems, including fatigue, headaches, and depression. And, over time, stress can contribute to more significant health issues, including high blood pressure and heart disease.2 The good news is that there are some simple steps you can take to reduce or eliminate some of the financial stress in your life.
 

1. Stop and assess

The first step in reducing financial stress is to look at your situation objectively, creating a snapshot of your current financial condition. Sit down and list all of your financial obligations. Start with the items that are causing you the most stress. For debts, include the principal due, the applicable interest rate, and the minimum payment amount. If you’re not already doing so, review your bank account and credit-card statements to track where your money is going. The goal here is not to solve the problem; it’s to determine and document the scope of the problem. You might find that this step alone significantly helps alleviate your stress level (think of it as facing your fears).
 
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What’s New in the Housing Market for 2015?

What's New in the Housing Market for 2015?Home buyers and sellers finally have reason to celebrate in 2015. After almost a decade of limping along toward recovery, it seems as though the housing market has finally hit a more comfortable stride. According to the S&P/Case-Shiller Home Price Indices, well-known gauges of the U.S. housing market, real estate is finally showing healthy signs of improvement.
 
Data released by Case-Shiller at the end of April indicates that home prices have continued to rise across the United States. (Source: S&P/Case-Shiller Home Price Indices, April 2015) And as it turns out, no one factor is responsible for the trend. Rather, a variety of factors are being credited for the recovery.

 

Low mortgage interest rates

This year, mortgage rates have remained at all-time lows. (Source: Freddie Mac U.S. Economic & Housing Market Outlook, April 2015) A slower-than-expected economic recovery may be partly responsible, with the Federal Reserve holding off on raising interest rates until the economy is on more solid ground. And while interest rates are expected to go up at some point (possibly later this year), home buyers are taking advantage of the historically low rates while they can.
 
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