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All posts tagged roth ira

Contemplating whether to contribute to a Roth IRA or a defined contribution (DC) plan (such as a 401k)? Words of advice: Follow the money! If your company offers you a match for your DC plan contribution, you should keep investing in the account up to the maximum percentage that it will match. This is free money, and you won’t find a better deal any place else.

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Did you know there is an order for how withdrawals are taken from Roth IRA accounts? Even if you have 10 different Roth IRA accounts, for tax purposes, they are considered one account. The IRS says that distributions MUST be withdrawn in a specific order, and that order applies regardless of which Roth IRA is used to take that distribution. These distributions should be made in the following order:

  1. From non-taxable annual contribution to a Roth IRA (other than conversion amounts)
  2. From conversion contributions, on a first-in, first out (FIFO) basis
  3. From earnings.

You ask why this matters…click here to read the entire article.