|
New law allows IRA owners over 70 1/2 to donate RMD to charity
The Pension Protection Act of 2006 allows IRA owners age 70½ or older to make direct transfers of up to $100,000 per year from their IRA to a charity. The provision became available for IRA distributions taken after Aug. 17, 2006 and applies only through the end of 2007. Distributions can be made from taxable funds in an IRA or Roth IRA, but not from employer plans or SEP and SIMPLE IRAs. The distribution will not be taxable and there is no charitable deduction allowed on the tax return. But the provision allows those who want to contribute some of their IRA funds to a charity during their lifetime to do so without having to add the distribution amount to their income. This is better – because you do get a charitable deduction if you take the IRA withdrawal and report that amount in income. The reality, though, is that it often doesn’t offset perfectly, which is why this new law is more favorable. More...
Is Conventional Planning Right for You?
Do online interactive financial planning models really help people in deciding how much to save, to insure, and to invest in stocks and other asset classes? These models vary in complexity and in level of detail, according to a recent Boston University School of Management Conference on the Future of Life-Cycle Saving & Investing. More...
The Correct Way to Use Lifecycle Mutual Funds
Target-date and target-risk funds have become popular investments among 401(k) plan participants and retirement investors, especially those who have neither the time, knowledge nor inclination to create and manage an investment portfolio. For instance, recent research by Financial Research Corporation, shows that assets in target-date retirement funds has risen dramatically over the past several years, rising from $14.5 billion in 2002 to $86.7 billion in May, 2006. And assets in lifecycle funds have risen from $54.6 billion in 2002 to $145.9 billion in May, 2006. What’s more, FRC is predicting that both target-risk and target-date retirement funds, sometimes referred to as lifecycle or lifestyle funds, will continue to grow dramatically over the next four years, with target-date retirement funds hitting some $30 billion by 2010. Target-date funds are mutual funds that base their asset allocation around a specific date, and then rebalance to more conservative allocations as that date approaches, according to FRC. Target-risk funds are mutual funds that build their asset allocations around a pre-specified level of risk, and then rebalance to maintain that risk level. More...
College Planning in the Wake of New Tax Laws
Planning for college has never been easy. But such planning became a bit easier when President Bush signed the TIPRA and DRA into law earlier this year. Among other things, DRA and TIPRA changed the treatment of pre-paid tuition plans and 529 plans, two popular vehicles Americans use to save for and pay for college. Chief among the changes are those that pertain to the so-called “kiddie tax.” Effective in 2006, the new law calls for the "kiddie tax" to remain in effect until a child turns 18. Previously, unearned income attributable to children age 14 and older was usually taxed at the child's tax rate. The new tax law, however, raises the age to 18 effective January 1, 2006. Exceptions apply for minor children who are married and file a joint tax return, and distributions from certain qualified disability trusts. More...
Other articles: [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] [12] [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [23] [24] [25] [26]
|
|
