Get smart with your money
By Liz Weston
You probably need life insurance if your death would cause financial hardship to someone else. If the only coverage you have is through your job, though, you may not have enough.
In my latest for the Associated Press, find out why the pandemic has made buying life insurance somewhat easier and why it may be cheaper than you think.
Dear Liz: My husband doesn't qualify for term life insurance because he is overweight and…
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For a moment I was speechless. The journalist who said these words obviously thought he…
I just turned 70 and retired a month ago. I have a Traditional IRA Account as well as a ROTH IRA Account. I have already made the maximum contributions for both – $39,000 and $7,000 respectively.
I read about the Roll Over and the Conversion from the Traditional to Roth and never got to one that can explain ready well. It just too confusing as they didn’t know how to explain.
To make it as simple, these are my questions.
1. Can I continue to contribute to ROTH since I have retired?
2. I have more than $700K and $50K in my Traditional IRA and ROTH IRA respectively. Since I have already contributed the maximum to both for year 2020, does that mean I cannot do the Roll Over or Conversion for 2020?
3. Is the Roll Over or Conversion limited to just $7K (based on my AGI) per year in my case? That means I can Roll Over $7K of security or cash from my Traditional to ROTH in 2021 without having to pay tax?
Hi, Sylvester. The maximum amount you can contribute to IRA accounts in 2021 is $7,000 total (not $7,000 per account, and certainly not $39,000). Perhaps you rolled another retirement account into your traditional IRA? If not, and it was in fact a new $39,000 contribution, you should talk to a tax pro ASAP about the best way to remove the money and any earnings.
You must have earned income to contribute to an IRA or a Roth. Social Security, pensions and investment income don’t count. You can convert any amount of IRA money to a Roth at any time, but you will owe taxes on the conversion and late-in-life conversions rarely make financial sense. Hope that helps.