The Roth 5 Year Rule Is Really Two Rules
One clock decides whether your earnings come out tax free. A separate clock decides whether converted money comes out without a penalty, and they start on different dates.
Topic
taxes
Social Security At 62, 67 Or 70: The Break-Even
The break-even arithmetic is simple enough to do on a napkin, and it answers a narrower question than most people think. The survivor benefit is the part that changes the decision.
The HSA Is A Retirement Account Wearing A Health Plan
Money goes in untaxed, grows untaxed and comes out untaxed for medical costs, which no other account in America does. Then almost everybody leaves it in cash and spends it on this year's dentist.
The Backdoor Roth: Who Actually Needs One
It is two steps and it is legal, and most people who ask about it can simply contribute to a Roth directly. For the people who cannot, one rule decides whether it is free or expensive.
SEP, Solo 401k Or SIMPLE: Which Shelters More?
A SEP, a solo 401k and a SIMPLE all shelter self-employment income and give you wildly different amounts of room per dollar earned. On a modest profit the gap is roughly three to one.
The 401k Rollover Mistake That Triggers A Tax Bill
Direct and indirect rollovers move the same money to the same place. Only one of them can hand you a tax bill for a transaction you thought was neutral.
Can You Open An IRA If You Already Have A 401k?
Having a workplace plan does not use up your IRA allowance. It changes one narrow thing, and people fold three separate questions into that one.
What A Brokerage Account Costs You At Tax Time
A regular brokerage account has no contribution limit and no rules about when you take the money out, and it charges you for that freedom every single year. The bill arrives as a tax form.
The 7 Costs A Mortgage Calculator Does Not Show You
Principal and interest is where the calculator stops. Seven other costs arrive every month anyway, and together they run about half as much again.
ETFs vs Mutual Funds: Only One Difference Costs You
Two wrappers around an identical basket of stocks, from the same firm, tracking the same index. Three things separate them, and only one of them will ever cost you money.
Saving For College Without Wrecking Your Retirement
The sequence is not a matter of taste and the arithmetic is not close. Fund the match first, then the college account, and here is what waiting five years actually costs.
Paying Tax On Side Income Nobody Withheld
Side income arrives whole and the tax bill arrives later, with an extra piece attached that most first-time freelancers have never heard of. Here is the arithmetic and the account that fixes it.
Where To Keep Cash You Need Within Two Years
Savings accounts, certificates of deposit and Treasury bills all pay roughly similar rates and behave nothing alike when you need the money early. Access is the variable that decides it.
How To Pick A Student Loan Repayment Plan
Plan names change, the two numbers do not: what you pay each month and what you pay in total. Stretching $40,000 from ten years to twenty-five saves $186 a month and costs $24,026.
Should You Itemise? Most People Should Not
The choice comes down to one subtraction, and for most households the answer is settled before they start keeping receipts. Here is how to find out which side of the line you are on.
Roth Or Traditional: One Number Decides It
Strip out the noise and the whole choice comes down to your tax rate today against your tax rate when you withdraw. Everything else is a tiebreaker.
Your Tax Refund Is A Receipt, Not A Bonus
A tax refund is your own money coming back after an interest free loan you did not agree to make. The fix is one form and takes about twenty minutes.
Your Tax Bracket Is Not The Rate You Pay
The belief that a raise can push you into a bracket and leave you with less money is the most persistent wrong idea in personal finance. One worked return kills it.
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