The Complete Guide to IRAs and IRA Investing: Wealth-Building Strategies Revealed

by Martha Maeda

Overview

As more and more baby boomers reach retirement age and because retirement seems to come at an earlier age, the importance of saving for your nonworking years has become increasingly apparent. Many people find themselves worrying that they will not be able to maintain their current lifestyle once they retire. However, the strategies provided in this book will help turn your IRA into a wealth-building tool.

The Complete Guide to IRAs and IRA Investing will show you how to take control of your investment future and make sure your IRA investments are performing. You will learn about Roth IRAs, traditional IRAs, SEP IRAs, SIMPLE IRAs, and self-directed IRAs, the advantages and disadvantages to each, and how to choose the right plan for you. You will learn about the Economic Growth and Tax Relief Reconciliation Act of 2001, rules regarding distribution, roll overs, transfers, and conversions between accounts, valid adjustments, adjusted gross income, annual contribution limits, potential penalties, and tax-deductible contributions. This book details the myths and truths about IRA investing and IRS guidelines.

In addition, this book will show how to open an IRA, choose the right financial adviser, and how to set up your account with a custodian or IRA administrator to deal with the day-to-day activities, such as depositing contributions and executing and settling transactions. The Complete Guide to IRAs and IRA Investing provides insight and insider secrets to help secure financial victory after your retirement.

Atlantic Publishing is a small, independent publishing company based in Ocala, Florida. Founded over twenty years ago in the company president’s garage, Atlantic Publishing has grown to become a renowned resource for non-fiction books. Today, over 450 titles are in print covering subjects such as small business, healthy living, management, finance, careers, and real estate. Atlantic Publishing prides itself on producing award winning, high-quality manuals that give readers up-to-date, pertinent information, real-world examples, and case studies with expert advice. Every book has resources, contact information, and web sites of the products or companies discussed.

This Atlantic Publishing eBook was professionally written, edited, fact checked, proofed and designed. The print version of this book is 288 pages and you receive exactly the same content. Over the years our books have won dozens of book awards for content, cover design and interior design including the prestigious Benjamin Franklin award for excellence in publishing. We are proud of the high quality of our books and hope you will enjoy this eBook version.

Product Details

ISBN-13:	9781601385567
Publisher:	Atlantic Publishing Group
Publication date:	01/01/2009
Sold by:	Barnes & Noble
Format:	eBook
Pages:	360
Sales rank:	849,956
File size:	2 MB

Table of Contents

Foreword 13

Introduction 19

Section 1 Understanding Iras 23

Chapter 1 What is an IRA? 25

Your Ticket to a Secure Financial Future 25

History of IRAs 26

How Does an IRA Work? 30

IRAs and Income Tax 32

Chapter 2 Traditional IRAs 35

Tax Benefits 35

Types of Investments 37

Rules and Restrictions 38

Withdrawals 41

What You Cannot Do With a Traditional IRA 43

Common Strategies with a Traditional IRA 46

Simplified Employee Pension (SEP) IRAs 54

Advantages of an SEP 58

Education IRAs: Coverdell Education Savings Accounts (CESAs) 60

Simple Iras 62

Chapter 3 Roth IRAs 65

Rules and Restrictions 65

Conversions and Rollovers from Other IRAs and Retirement Plans 73

Reporting a Loss on a Roth IRA 78

Common Strategies with Roth IRAs 79

Chapter 4 IRAs, 401 (k)s, Profit-Sharing Plans 83

Profit-Sharing Plans 83

Stock Bonus Plans 86

Money Purchase Pension Plans 86

Employee Stock Ownership Plans (ESOPs) 87

Defined Benefit Plans 87

Target Benefit Plans 88

Keogh Plans 88

IRAs and 401 (k)s 89

What to Do with Your 401 (k) When You Leave a Company 90

Section 2 Setting Up And Managing An Ira 95

Chapter 5 How to Set Up an IRA 97

What are Your Investment Objectives? 97

How Much Do You Need for Retirement? 98

Considerations in Planning Your IRA 99

Leaving an IRA to a Charity 104

When Should You Open an IRA? 104

How to Find an IRA 107

Financial Advisors 111

Contributions 112

Achieving Your Goals 116

Chapter 6 Your Portfolio 123

Building Your Portfolio 124

Investment Styles 126

Modern Portfolio Theory 132

Asset Allocation 144

Your Portfolio 149

Chapter 7 Self-Directed IRAs 171

The Major Players 172

Choosing anAdministrator 173

Funding a Self-Directed IRA 177

Checkbook Control 178

Managing Risk 179

Real Estate 181

Real Estate Options 184

Taking RMDs 192

Loans 192

Precious Metals 193

Prohibited Transactions 193

Section 3 Making Withdrawals From An Ira 197

Chapter 8 Early Withdrawals 199

Early Distributions - 59V2 Rule 199

Early Withdrawals of Nondeductible Contributions from Traditional IRAs 205

Early Withdrawals from Roth IRAs 206

Chapter 9 Required Minimum Distributions (RMD) 211

When Do You Begin Taking the RMD? 211

Calculating Your RMD 212

How Do You Take Your RMD? 214

RMDs for Multiple IRAs 215

An Extra Amount Withdrawn One Year Cannot Be Credited to a Later Year 215

Penalty For Failure to Take Your RMD 216

Effect of RMDs on Your Finances 217

Chapter 10 IRAs and Your Taxes 219

Income Tax Brackets 220

Basis 223

Tax Deductions for Losses on Investments in Your IRA 225

Investments in Taxable and Non-Taxable Accounts 227

Additional Tax Penalties 229

Section 4 Iras And Estate Planning 231

Chapter 11 Planning for Your Beneficiaries 233

Tax Consequences of Inheriting an IRA 234

Your IRA and Your Will 239

Naming Your Beneficiaries 240

Your Custodial Agreement 248

Stretching an IRA 249

Convert to a Roth IRA 253

Keep All Your IRA Documents in One Place 254

Chapter 12 When You Inherit an IRA 255

How Large is Your Inherited IRA? 256

Do You Need Cash? 257

What Are Your Tax Liabilities? 257

Life Expectancy Rule 258

The First Step: Name a Successor Beneficiary 259

Spouse Sole Beneficiary 260

Non-Spouse Beneficiary 263

Multiple Beneficiaries 265

Reporting Distributions From an Inherited IRA 268

Chapter 13 Special Circumstances 269

Divorce or Separation 269

Common IRA Mistakes 274

What to Do When You Make a Mistake 277

Ineligible Contribution to a Roth IRA 280

Private Letter Ruling 281

Chapter 14 Your IRA and the Economic Crisis of 2008 - 2009 283

Things May Never Be the Same Again 284

Perception and Trust 290

What the Government Can Do 292

Managing Your IRA in a Down Economy 293

Appendix A Acronyms 299

Appendix B Glossary 303

Appendix C Useful Web Sites 317

Appendix D Federal Government Publications and Forms 329

Appendix E Lifetime Expectancy Tables 333

Bibliography 351

Author Biography 355

Index 357