If you do any amount of research online, you'll find financial advisors everywhere touting the benefits of the Roth retirement account. However, what is often less discussed are the differences between the Roth IRA and the Roth 401(k). What exactly are the differences, and how does this impact your retirement savings? There are pros and cons to each and they're not as similar as you might think.
In case you haven't heard, a new bill has passed through the House of Representatives called the SECURE Act (Setting Every Community Up For Retirement Enhancement). The Act attempts to tackle parts of the retirement savings crisis. Like most bills that come out of Congress, there are good parts and bad. How will this impact you? Here are the top things we think you should know about this bill.
As more and more pensions have phased out, individuals have become increasingly reliant on other retirement savings vehicles, like a 401(k) or an IRA. We hear a lot about people not saving enough for retirement, but for those that do, it's likely they will end up passing their unspent savings to younger generations. This can leave the individual inheriting these accounts in tax situations they haven't come across before. While there are many options for transfers and distributions you have to make sure that you avoid making any mistakes that could lead to costly tax consequences.
When it comes to financial planning, taxes are always a top concern. They can become even more tricky when someone lives in one state but works in another. Do you need to file a state return? What income gets reported where? If you're one of the many who live in NH but work in MA, make sure to report your income correctly so you're not overpaying this year.
Many people work for large corporations who offer stock plans as part of their employee compensation packages. While getting company stock (hopefully at a discount!) can be nice, when tax time rolls around, the extra documents received leaves many with quite the headache. Although each stock plan will be different, we wanted to explain one of the more common confusions with stock plans and their tax forms.
Do you need a CPA? Luckily our very own Jennifer Climo, who is a CPA herself, wrote an article for Exhale Lifestyle addressing this very topic.