I find one of the most confusing set of rules for retirees are the three 5 year Roth IRA rules. Often they each are referenced as 'The 5 Year Roth Rule' as if there is only one rule. However, there are three and each carries a different penalty for non-compliance. The worst part about these penalties is that they destroy wealth in your most valuable retirement account: Roth IRA. The confusion around these rules has been compounded in recent years. As recent as 2020, the estate planning rules have changed thus changing one of these rules. In this video, we simplify and explain these rules in layman's terms. We cover: 1. The 5-Year Contribution Rule 2. The 5-Year Conversion Rule 3. The 5-Year Inheritance Rule If you have any questions, please post them in the comments and we will make sure you get the answers you need. - - - - - - - - - - - - - - - - - - - - Always remember, "You Don't Need More Money; You Need a Better Plan" 🍿 Subscribe to our channel: 🏆 Join our 'Retirement Mastery' Facebook Group: 📈 Talk with us about your retirement plan here: 📚 The New 60/40: How the Next Generation of Retirees Can Achieve Radical Financial Freedom through Better Safe Investing - Safeguard Wealth Management is a Registered Investment Advisor in the State of WI. Safeguard Wealth Management is not an insurance provider. All content on Youtube is for informational purposes only and should not be taken as personal advice for your situation. You can read more disclosures at ...(read more)
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When it comes to retirement planning, the Roth IRA can be an invaluable tool. It allows you to save for retirement in a tax-advantaged way, and the money you contribute grows tax-free. But there are some important rules you need to be aware of when it comes to Roth IRAs. In particular, there are three confusing 5 year Roth IRA rules that you need to understand in order to make the most of your retirement savings. The first 5 year Roth IRA rule is the 5 year holding period rule. This rule states that you must hold the Roth IRA for at least 5 years before you can withdraw any earnings tax-free. This means that if you withdraw any earnings before the 5 year mark, you will be subject to taxes and penalties. The 5 year holding period begins on the first day of the tax year in which you make your first Roth IRA contribution. The second 5 year Roth IRA rule is the 5 year age requirement. This rule states that you must be at least 59 ½ before you can withdraw any earnings tax-free. This means that if you withdraw any earnings before the 5 year mark, you will be subject to taxes and penalties. The third 5 year Roth IRA rule is the 5 year death requirement. This rule states that if you die before the 5 year mark, your beneficiaries will not be able to withdraw any earnings tax-free. This means that if your beneficiaries withdraw any earnings before the 5 year mark, they will be subject to taxes and penalties. Navigating these three 5 year Roth IRA rules can be complicated, but understanding them is essential for making the most of your retirement savings. By knowing when you can withdraw earnings tax-free and when you or your beneficiaries may be subject to taxes and penalties, you can ensure that you are taking advantage of the tax-free growth of a Roth IRA. https://inflationprotection.org/the-roth-ira-5-year-rules-explained-navigating-three-confusing-5-year-roth-ira-rules/?feed_id=73123&_unique_id=63f786057c1aa #Inflation #Retirement #GoldIRA #Wealth #Investing #5yearrothrule #5yearrothruleexplained #5yearruleroth #5yearrulerothira #multiple5yearrule #roth5yearrule #roth5yearruleexplained #rothconversion #rothconversion5yearrule #rothconversionexplained #rothira5yearrule #rothiraconversion5yearrule #rothiraearlywithdrawal #rothirapenalty #rothiratwo5yearrules #rothirawithdrawalrules #rothirawithdrawaltaxrules #rothwithdrawalrules #two5yearrules #VanguardIRA #5yearrothrule #5yearrothruleexplained #5yearruleroth #5yearrulerothira #multiple5yearrule #roth5yearrule #roth5yearruleexplained #rothconversion #rothconversion5yearrule #rothconversionexplained #rothira5yearrule #rothiraconversion5yearrule #rothiraearlywithdrawal #rothirapenalty #rothiratwo5yearrules #rothirawithdrawalrules #rothirawithdrawaltaxrules #rothwithdrawalrules #two5yearrules
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