Money & Investing - Banks.com

Few people recognize their retirement accounts as investments, but they are. And in some cases it makes sense to switch up your investments in order to get the best possible outcome for yourself. In such cases, rolling your 401k over into a Roth IRA can be a good move. But you have to be aware that there are some rules for directly rolling 401k retirement accounts into a Roth IRA. Additionally, you can turn your 401k into a traditional IRA and then convert into Roth form.

If you are unsure of how it works, make sure that you speak to a knowledgeable professional who can help you with the ins and outs of taxes, and who can make sure that everything is in order. In the meantime, here are a couple of rules for directly rolling your 401k (or your 403b or your 457) into a Roth IRA:

1. Adjusted gross income must not be more than $100,000, no matter your filing status.
2. Until 2010, you cannot be married filing separately.
3. Taxable income in your retirement accounts must be reported as income for the year of your conversion.
4. While a direct conversion will not have a 20% withholding, 60-day conversions do. Make sure that you do a trustee-to-trustee transfer in order to avoid the withholding.
5. Note that if you withdraw the funds from your account within five years of your rollover, a 10% penalty will be assessed.

Also, on all retirement accounts, check for required minimum distributions and other policies that may affect you now, and down the road. And make sure that rolling the 401k into the Roth IRA will really work for you.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions.

Tags: retirement accounts, Roth IRA, investing blog, 401k,
401k conversion, investments, retirement

One of the more exciting things to happen around the Banks.com neighborhood is the recent acquisition of MyStockFund.com. This is actually a really cool way to get started with investing.

For many beginners, it can be daunting to open an investment account. And there are many online investing brokers that can help you ease into the process. MyStockFund, though, has some features that I really like — features that make stock investing a little easier:

• Fractional investing. This is when you buy portions of a share, rather than a whole share. So, if a share costs $80, and you only have $40 to invest, you would get half a share. If you had $100 to invest, you would get 1.25 shares. This method is very helpful in conjunction with dollar cost averaging or a “buy and hold” strategy.
• Low commissions. It is possible to make trades for as little as 99 cents. There are also investing plans with special pricing, and a promotion going on right now to allow you to waive the subscription fee on one of the accounts.
• No minimum balance. Some online investing services require you to hold a minimum balance. When getting started, this can be difficult. Most beginning investors don’t have $2,000 to $5,000 just laying around to get started with.
• Investment amounts start as low as $10. Many times, an investment account will require at least a $50 minimum per investment. MyStockFund makes it easy to get started with a $10 minimum.
• Dividend reinvestment. Once of the most investment strategies is to reinvest dividends. You can get free dividend reinvestment on MyStockFund. It is also possible to set up your investment account so that dividends are automatically reinvested.
• IRAs. Not every online investing Web site offers retirement account options. You can open an IRA and start saving for retirement — or beef up your retirement savings — with help from MyStockFund.

Bottom line: While it may not be the best option for all investors, MyStockFund is a great service for beginning investors. And, really, day traders can still benefit by setting up an account and taking advantage of the low commissions.

Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional.

Tags: stock investing blog, stock investing news, online investing, fractional investing,
retirement accounts, investment account, investing plan