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What is a simple IRA and how can I invest in one?
SIMPLE IRA - WikipediaOnly an "eligible employer" may establish a SIMPLE IRA. An eligible employer is one with no more than 100 employees. An employer who has already established a SIMPLE IRA may continue to be "eligible" for two years after crossing the 100 employee limitOrTraditional IRA vs. Roth IRA: Understand the Differences | RothIRA.com
Are you able to open up a multiple accounts at Wealthfront, like one for personal investment, one for roth IRA, and one for SEP IRA?
Yes, you can - here is their FAQ What types of accounts does Wealthfront currently support? We often get this question at Hedgeable. We have over 20 account types offered  -As our clients needs expand, the number of accounts they have with Hedgeable often grows as well. There are many different types of accounts that clients can open (listed below) to serve various goals and objectives: retirement, general wealth accumulation, gifting to a minor, and more.Benefits of Having More than One AccountWith multiple accounts, it can be hard to keep track of. How is one account being managed versus the other? Is one hand washing the other? Many of our clients open up all of their accounts with Hedgeable to ensure that strategies and investment holdings aren't duplicated across their overall financial picture. By doing this, they allow us to manage their full financial picture, to mitigate risk across all account types.Beyond that, it's helpful to have all accounts on one platform. Instead of needing to log on to separate sites to view account analytics, performance, or even remembering separate logins, Hedgeable brings everything into one simple picture. You can even manage recurring contributions into each of your account, to be taken out of your checking at a frequency of your choosing.Types of AccountsIndividual - TaxableYour bread and butter for first investment account at Hedgeable. Do you have a big chunk of money earning 0% interest in your savings account? Do you only have a couple bucks to spare until you win the Powerball? Either way, we have you covered. With no account minimum, you can open up a regular taxable account to grow and preserve your nest egg.Joint Account - TaxableSometimes, it might be appropriate to open up an account with more than one person. Some spouses decide to open up joint accounts once they get married, family members own certain accounts in joint title, or anything in between. These joint accounts can be formed in different ways: Joint Tenant with Rights of Survivorship, Joint Tenants in Common, Joint Tenants with Community Property, and Joint Tenants by Entirety. Please consult your legal advisor to determine which of these is appropriate for your circumstances and if each account type is allowed in your state of residence.Traditional IRATraditional IRA's have become as ubiquitous as commercials with older balding gentlemen telling you how important it is to save for retirement. Through our platform, you can easily start saving for retirement by making contributions from your checking account. Per the Internal Revenue Service (IRS), you can contribute $5,500 to your account per year (or $6,500 if you are older than 50). The funds that you put into the account are tax-deductible; so, the IRS will grant a credit to you, making your IRA contributions effectively before-tax. Your account will grow tax-deferred--that is, you will not pay taxes on any earnings. Once you make a retirement withdrawal after age 591/2, they are taxed as ordinary income without penalty.Rollover IRADo you have 401(k)'s scattered across previous employers? Rollover IRA's allow you to combine 401(k)'s that you may have had at previous employers into one account. By doing this, it allows you to maintain the tax-deferred status from your 401(k), without a penalty. In addition, as your continue to save for retirement and your account size grows, you can take advantage of our fee breakpoints. From an account management and logistics standpoint, the Rollover IRA is essentially the same thing as a Traditional IRA.ROTH IRAMany Hedgeable clients take advantage of a Roth IRA, in addition to a Traditional IRA. Unlike a Traditional IRA, contributions to ROTH IRA's go in after-tax, and are withdrawn tax-free (as long as they are a qualified retirement distributions after age 591/2). This tax-free growth can be compelling for younger clients that want to take advantage of longer time horizons for their retirement. In addition, many clients utilize ROTH conversions, a strategy that recognizes taxes in a Traditional IRA immediately and moves the proceeds to a ROTH IRA. Please consult your tax advisor to determine if ROTH conversions are appropriate for you.Solo 401(k)Did you know that you don’t have to work for a large company to have a 401(k) plan? It is true. Called a Solo or Individual 401(k), this account type allows you and a spouse to take advantage of the same 401(k) rules that employees of large organizations can. In fact, it is one of the most popular Hedgeable account types, and Hedgeable remains the only major digital wealth manager that offers these account types. There are only about 750,000 401(k) plans in America, yet there are over 25 Million sole proprietorships and single member LLCs in America. You can be a young doctor, dentist, lawyer, accountant, painter, landscaper, consultant, recruiter, and dozens of other occupations and get a Solo 401(k) setup. Regardless of professional title, if you are a "1099 employee" or if you own your own business, you may be eligible to open up a personal 401(k). Unlike SEP IRA's, Solo 401(k)'s can be set up to allow loans from the plan.For these plans, contributions are made by the employee and the employer (even though you are effectively both, since you own your own business). Just like Traditional 401(k)'s, employee contributions are limited to $18,000 (or $24,000 if you are older than 50). Employer's can make non-elective contributions up to 25% or compensation, or as defined by your plan. Please consult your tax advisor to determine what is most suitable when setting up a plan, and how much you can contribute each tax year.ROTH Solo 401(k)Hedgeable allows its clients to participate in a ROTH Solo 401(k) for qualifying small business owners or "1099 employees"! These follow the same contribution rules and procedures, the contributions are after-tax instead of pre-tax, akin to ROTH IRA's compared to Traditional IRA's.SEP IRASEP IRA's are a useful type of account for self-employed or "1099" individuals and provides a higher contribution limit than Traditional IRA's. For 2022. contributions cannot exceed the lesser of 25% of compensation, or $53,000, whichever is smaller.Since there are no employee contributions, it is most useful for a small business owner with no employees. Also, unlike a Solo 401(k), you cannot take advantage of the ROTH option. Historically, SEP IRA's have been a useful tools for self-employed individuals looking for higher contribution plans to save for retirement. Please consult your tax advisor to determine how much you can contribute to your plan each year.SIMPLE IRAA  SIMPLE IRA has been used as a low-cost alternative to 401(k)'s for small businesses. This option allows employees to make contributions, while usually requiring employers to pitch in with employer contributions. Unlike a traditional company 401(k), SIMPLE IRA's do not require the complexity of third-party-administrators or annual safe-harbor testing. For 2022. employees can contribute up to $12,500 (or $15,500 if they are older than 50). It is common for employer's to contribute 3% of employees salary with immediate vesting, but this depends on how the plan is set up. SIMPLE IRA's can not be set up for more than 100 employees at any time during the preceding year. Please note, at this time, the IRS does not allow for a SIMPLE IRA to be a ROTH IRA.Custodial Account (UGMA/UTMA)Custodial accounts are a great way to gift cash or securities to minors. In most states, minors are not allowed to own stocks outright or open an investment account for themselves. Under the Uniform Gift of Minors Act (UGMA) or the Uniform Transfer of Minors Act (UTMA) minors can receive cash or securities while an appointed person (who cannot be a minor) manages the account until the minor reaches the age of majority. You can contribute as much as you want to this account, as long as it complies with the requirements of the gifting limits imposed by the IRS ($14,000, or $28,000 for married couples).Personal & Business Trust AccountsHedgeable accepts personal trust accounts, that can be set up in a variety of forms. Regardless of if the plan is revocable, irrevocable, or a "dynasty trust", we can accept the account and begin to invest for the trust beneficiary's goals and objectives. Trust accounts can be opened for a variety of reasons: planned giving strategies to charities, to give part of an inheritance to someone while abiding by certain rules and stipulations, to care for a mentally challenged or disabled person, among other reasons. Please consult with a trust and estate attorney for future guidance on which trust is most appropriate for you.Businesses can open trust accounts as well, to hold money on behalf of clients, the company, or to met certain regulation requirements. In some cases, it may be appropriate to invest the cash instead of letting it sit in a bank account earning next to nothing in interest.What We Do Not AcceptPlease see my answer on trusts that are available to wealthy Americans.You were born poor, but now you are rich. How do you ensure your family will still be wealthy beyond three generations? We do not offer many of these trust types.Although our clients have multiple accounts with us at Hedgeable, this may not capture their full financial picture. Homes, credit card debt, and mortgages are all examples of assets/liabilities that can not be held at our custodian. To get around this issue, we praccount aggregation services on our platform.Disclaimer: This is not a solicitation to buy or sell securities or an offer of personal financial advice. Past performance is not indicative of future performance. It is suggested you seek out the help of a financial professional before making any investing or personal financial management decision.
Can a person hypothetically max out their 401(k) at one job ($18,500) and then max out a SIMPLE IRA ($12,500) at a second job, thereby giving them a total of $31,000 in tax-deferred savings a year?
From the IRS website about SIMPLE IRAs, “If an employee participates in any other employer plan during the year and has elective salary reductions under those plans, the total amount of the salary reduction contributions that an employee can make to all the plans he or she participates in is limited to $18,500 in 2022 ($18,000 in 2022 - 2017).”So, no you cannot contribute more than the original max of $18,500 total to an employer plan in a year. However, depending on income requirements, you might still be eligible to make $5,500 in contributions to a Roth or Traditional IRA, in addition to your 401k contributions. That could raise your potential tax-deferred savings to a total of $24k.
How do you qualify for the retirement Saver's credit?
Retirement savings eligible for the credit. The Saver's Credit can be taken for your contributions to a traditional or Roth IRA; your 401(k), SIMPLE IRA, SARSEP, 403(b), 501(c)(18) or governmental 457(b) plan; and your voluntary after-tax employee contributions to your qualified retirement and 403(b) plans.Jan 30, 2017Retirement Savings Contributions Credit (Saver's Credit)https://www.irs.gov/retirement-p...
What are the different types of retirement plans?
Retirement plans are also known as pension plans are insurance investment products. Under a pension plan, the money you invest gets accumulated over a fixed period of time. Upon maturity, the retirement plan provides a regular source of income that provides much-needed financial stability post-retirement.Here are the different types of retirement plans:1. Personal Retirement PlanIt is purchased personally through a life insurance provider. Under a personal retirement plan, the premium gets invested in the preferred funds of the policyholder. The selection of funds depends totally upon the risk-appetite of the policyholder. As the name suggests, a personal retirement plan has no link to the policyholder’s employer.Personal Retirement plans are of three types:a. Deferred Annuity Planb. Immediate Annuity Planc. Retirement Plan with /without Life InsuranceWork-based Retirement PlanA work-based retirement plan is offered by the employer to their employees. Under this retirement plan, the current employer as well as the employee contributes to the retirement fund every month.Work-based retirement plans are of 3 types:a. Defined Benefitb. Defined Contribution or Money Purchase Planc. Hybrid
How do you determine the fair value of a piece of property?
There are three techniques typically used to value conventional real property: 1) The comparable sales approach, which involves identifying five or more nearby similar properties, making various adjustments for location, lot configuration, etc., and then coming up with an adjusted per square foot value that you then apply to the property you are trying to value. This approach is often used for vacant land or owner-occupied homes such as single family houses or condo unit.2) The income approach, which involves working up an operating pro forma for the subject property based on estimated rents, vacancies, utility costs, taxes and financing, and capitalizing the net cash flow at a market rate (ie. dividing the net profit of the property by a certain percentage that purportedly represents risk-adjusted return). This approach is used for leased properties, where you want to know the value of an income-producing property for investment purposes.3) The replacement value approach, which involves estimating all of the improvements that went into a building and determining how much it would cost to replicate the building today. This approach is used for properties that have some special quality that make the first two approaches irrelevant. For example I was once working on a project involving a concrete plant were the appraiser used this approach because concrete plants are not like most other properties: you cannot build one just anywhere, it has to be within a certain distance of the concrete's intended use, etc.You can read more about each of these approaches here:The Appraisal Foundation's USPAP 2012-1013There are other valuation methodologies that are used for special circumstances, like across-the-fence valuations and corridor valuations, but if you are concerned primarily with residential reale state approaches # 1 & 2 above will cover 95% of it.
In the US, what expenses are tax deductible for individuals?
In the USA, in 2022. individuals who itemize tax deductions can usually include the following with their itemized deductions (although some have floors, ceilings, and other important rules).Medical and dental expensesState and local income taxes or general sales taxesReal estate taxesPersonal property taxesCertain other state and local taxesHome mortgage interest and pointsMortgage insurance premiumsInvestment interest expensesGifts to eligible charitiesThe Tax Cuts and Jobs Act of 2022 eliminated tax deductions for tax preparation fees, investment expenses, and unreimbursed employee expenses, such as certain job travel, some union dues, and some job education, effective January 1, 2018.Individuals may be able to take an exclusion from income for the following.Educator expensesCertain business expenses of reservists, performing artists, and fee-based government officialsHealth savings account contributionsHalf of self-employment taxContributions to Simplified Employee Pension Individual Retirement Arrangements (SEP-IRA), Savings Incentive Match Plan for Employees Individual Retirement Accounts (SIMPLE-IRA), and Individual Retirement Accounts (IRA)Payments for health insurance for self-employed individualsPenalties on early withdrawal of savingsStudent loan interestCertain tuition and related feesCertain domestic production activitiesThe Tax Cuts and Jobs Act of 2022 eliminated exclusions for moving expenses unless the individual is in the military and moving due to military orders.Individuals may be able to take a tax credit for the following.Certain foreign taxes paidCertain child and dependent care expensesAmerican Opportunity Credit and Lifetime Learning Credit for certain education expensesRetirement savings contributions for certain individuals with relatively low incomesThere are plenty of details, exceptions, and limitations to the above. See the relevant IRS instructions, IRS forms, and a tax advisor for more important information.https://www.irs.gov/pub/irs-pdf/...https://www.irs.gov/pub/irs-pdf/...https://www.irs.gov/pub/irs-pdf/...https://www.irs.gov/pub/irs-pdf/...
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