Saver’s Credit for Retirement Savings Contributions
This credit used to be known as the “Retirement Savings Contribution Credit.” If you qualify you can claim a credit of up to $1000 for eligible contributions to qualified IRA, 401k, and certain other retirement plans. Since this credit is not refundable it can’t be larger than the tax amount the taxpayer would have had to pay without the credit.
Currently single filers can get a 50% credit of their eligible contributions if their AGI is up to $16,500; a 20% credit if their income is up $18,000: and a 10% credit if their income is up to $27,750. If the single filer’s AGI is over $27,750 they are not eligible for the credit.
A credit equal to 50% of eligible retirement contributions sounds nice but most people making $16,500 and less are probably not contributing or not contributing much to a retirement plan. My guess is that most people who take the credit are those who are eligible for the 10% rate. Although this credit is a nice perk for some I doubt it is actually enticing people to contribute to their retirement plans.
If your income is under $27,500 though be sure to check if you are eligible for this credit. The Saver’s Credit is probably one of the most overlooked credits.
If you owe a small amount in taxes it might be worthwhile to make an eligible retirement contribution just to take advantage of this credit considering you would get 10-50% of your money back.
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Retirement: News, Appraisals, Information, Research, Advice – Everything Life Settlements
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Retirement: News, Appraisals, Information, Research, Advice – Everything Life Settlements
How To Find A Stock Broker
Every once and a while, someone emails me to ask how I find a good stock broker for my retirement assets. What do I look at when I compare stock brokers? My answer, almost always, is “it depends.”
Ahhh I bet you hate that answer too. Well, unfortunately, it’s the truth. Who you decide to use as your stock broker will depend on what you want it for. If you want to invest primarily in mutual funds, I recommend you go with a mutual fund company. If you like Fidelity funds, then open a Fidelity account. If you like Vanguard funds, go to Vanguard Group for your retirement account. For mutual funds, going with the broker that runs them makes the most sense because you don’t have to pay a transaction fee to buy and sell shares. With a Vanguard account, you can buy or sell at will.
If you want to trade in stocks, it comes down to cost. I want a broker that has a good reputation and affordable fees. If I want to trade a lot of options, then I want one that gives me good prices on options trades. If I want to trade straight equities, I want one with cheap commissions on stock trades. After that, I want to look at the account minimums and any other fees, such as an account maintenance or inactivity fee. In all truthfulness, I never pay an account maintenance or inactivity fee. There are far too many brokers for you have to stand dealing with a broker that nickels and dimes you for those fees.
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Retirement: News, Appraisals, Information, Research, Advice – Everything Life Settlements
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