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How Does The My RA Work?

Trapped in my office by the Snowpocalypse that hit Atlanta on last Tuesday, I had the opportunity to watch the State of the Union (#sotu) Address delivered by President Obama.   There is a whole lot of financial topics we could talk about on Your Smart Money Moves, but I’d like to review the topic around the new proposed investment vehicle called the MyRA.  Since we already have the SEP-IRA, SIMPLE-IRA, Rollover IRA, Roth IRA, Traditional IRA, Beneficial IRA, etc., wouldn’t it have just been easier to call it the My IRA instead of the new urban dictionary word called MyRA? The concept behind the MyRA account would be a new type of bond within a Roth IRA-type umbrella.  Contributions would not be tax-deductible, but earnings would be tax-free when you withdraw it in the future.  It’s unclear about how closely the rules on this account shadow the rules of the current Roth IRA. The investment vehicle would be a new ...

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Does Your 401(k) Offer An “In Service” Distribution?

For Generation X clients, the majority of their retirement savings are in the company 401(k).   While you do have a multitude of options of what you can do with your 401(k) if you leave your employer, often people feel like they are stuck if they stay with the same employer for a long period of time.  This is especially true with larger companies as most of those plans offer a limited number of investment choices and several target retirement funds.     I’m amazed that many people I sit down have never heard of whether their company offers an in service withdrawal or an in service distribution which can give them greater investment control of their 401(k) assets.    Since we have had two major market meltdowns over the past 12 years, 401(k)’s offer limited power to help you risk mitigate against a market crash.   This is why you need ask your employer today, do we offer an in service distribution? So, just ...

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