The previous post Converting to Roth and Harvesting Capital Gains Under Obamacare Premium Subsidy shows when you are getting a premium subsidy for buying health insurance on the exchange under Obamacare, you face a marginal tax rate of about 25-30% for ordinary income and 10-15% for long-term capital gains, when normally ordinary income would be […]
Converting to Roth and Harvesting Capital Gains Under Obamacare ACA Premium Subsidy
You will pay an extra 10-15% tax if you convert to Roth or realize capital gains while you receive the premium subsidy under the ACA.
Income Bunching Under Obamacare ACA Premium Subsidy
If you can’t qualify for the premium subsidy under the ACA, if may be helpful to bunch up your income.
Traditional and Roth IRA: Recharacterize vs Convert
When it comes to Traditional and Roth IRAs, convert and recharacterize means different things even though they both involve changing something. Make sure you use the right word.
Your Traditional IRA is Life Insurance and an Emergency Fund
[This is a guest post from Bogleheads investment forum participant Bob’s not my name.] Roth IRAs are touted as backup emergency funds: you can withdraw your direct contributions at any time for any reason, without penalty (and, of course, without tax, because you already paid it). This is a very nice feature. It allows young […]
Stocks or Bonds in Roth?
[This is a guest post from Bogleheads investment forum participant Bob’s not my name.] A number of spurious arguments are made for holding riskier assets in your Roth IRA as opposed to a Traditional IRA. Let’s examine them. For simplicity, we’ll refer to risky assets as stocks and less risky assets as bonds, but the […]
Sitting Out the Roth IRA Movement Party
I woke up this morning hearing there’s a Roth IRA Movement going on in the bloggers circle. I don’t have anything prepared, except I want to remind everyone not to forget The Forgotten Deductible IRA. Roth IRA is great if you aren’t eligible for a tax deduction for contributing to a traditional IRA, meaning you […]
How To Recharacterize An IRA with Vanguard, Fidelity, Or Schwab
As I mentioned in my previous post Recharacterize Backdoor Roth, I requested recharacterization of my Roth IRA conversions in 2011 and 2012. Since this is the first time I did this, I’m documenting the process here. Why Recharacterize? Recharacterizing an IRA can mean two things: recharacterizing contributions OR recharacterizing a conversion (from Traditional to Roth) […]
Most TSP Participants Should Switch To the Roth TSP
My friend Austin asked me about the Roth TSP. TSP is Thrift Savings Plan. It’s the equivalent to a 401k plan for federal government employees and members of the military. Until now, TSP only accepts pre-tax contributions, like a Traditional 401k. TSP announced that it will add the Roth feature soon. I heard April 1, […]
Deduct-and-Convert: Save Hundreds in State Tax on Roth IRA
If you live in the right state and have the right income, you can save hundreds in state income tax when you contribute to a Roth IRA in a different way.