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11 Work-From-Home Jobs Great for Retirees
Theyâre calling it the Great Unretirement. Millions of people who retired in the last decade, and particularly since COVID, are seeking to return to work in the interest of gaining a little more financial security as well as other benefits like connecting with a community and creating a sense of purpose. Fortunately, since the pandemic […]
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How to Use Apple Pay
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
How To Protect Your Money From Fraud, Fees, And Scams – Money Under 30
As banking has moved more and more online, it’s more important than ever to know what steps to take to protect your finances from scammers, fees, and fraud. The good news is, with the right protections in place, your money can be far more safe and secure than it would be in a coffee can … [Read more…]
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When it comes to the big picture of your finances, small things add up: Like how and where you do your banking. For example, a checking account at the wrong bank can wreck havoc on your finances with unnecessary overdraft fees and customer service hassles. The right bank, by contrast, can make life easier, pay interest, and … [Read more…]
Why Your Bank Might Close Your Account (And What You Can Do About It)
Your bank might close your bank account for a variety of reasons – and they donât have to notify you first. Learn why your bank could close your account so you can take steps ahead of time to avoid it.Your bank might close your bank account for a variety of reasons – and they donât have to notify you first. Learn why your bank could close your account so you can take steps ahead of time to avoid it.
The post Why Your Bank Might Close Your Account (And What You Can Do About It) appeared first on Money Under 30.
Get One of The Highest APYs Around With a Vio Bank Account
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Emergency Funds: Why, Where, and How Much
Checking Accounts Vs. Money Market Accounts: Which Should You Choose? – Money Under 30
Managing your budget can be stressful, especially if you have an unexpected emergency pop up. Fortunately, there’s a way you can prepare for unexpected financial emergencies. By building up a savings buffer—called an emergency fund—you can be prepared to pay for unexpected emergencies without having to turn to credit card debt, family loans, or other borrowing options … [Read more…]
The Best Way for Kids to Save Isnât in a Boring Bank Account
Most kids are encouraged by their parents to save their money from their paper route or part-time job by throwing it into a bank savings account. While any kind of saving is better than nothing, there may be a way to do it where your kids can get tax benefits as well as a potentially better rate of return.
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A Roth IRA, if properly invested, will likely appreciate in value far more than money sitting in the bank â and could do it with tax-free growth. And the day will come when your child will be very grateful for the parent with the wisdom to have them do this. Later the Roth IRA will be available to help pay for college, and up to $10,000 of it can be put toward your childâs first home, all without early withdrawal penalties.
And if the young person canât resist pulling some funds out for that bicycle, the good news is that the original amount invested in a Roth IRA can always be withdrawn tax and penalty free. Also, for the child with the foresight to use some of their Roth IRA for retirement, withdrawals after 59½ will be completely tax free.
Age and income requirements
As long as a child has earned income, they can contribute up to $6,000 per year in a Roth IRA at any age. Someone else can also fund the Roth IRA for the child for up to $6,000 a year as long as the child has earned income equal to the amount contributed on their behalf.
If the child is legally a minor, which means in most states under 18 years of age, they will need to open a custodial Roth IRA where the child is the account owner with an adult, usually a parent, serving as the custodian. Contributions are reported to the IRS under the minorâs Social Security number, but the custodian is the individual authorized to act on the account.
Are there any disadvantages or pitfalls to watch out for?
While the original contributions can always be withdrawn tax-free, any growth in the investments in a Roth IRA if withdrawn before age 59½, would be subject to taxes as well as a 10% penalty. But keep in mind the IRS does make an exception if the funds are used for college or up to a $10,000 amount for a first-time home buyer, both which can prove to be a nice benefit for young people. In these cases, the funds can be withdrawn without a 10% penalty, although the growth would still be subject to taxes.
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Something else to be aware of is how to document income if the minor is not employed with a company and is not issued a W-2, for example if they mow lawns or shovel snow or babysit. In this case the custodian should document that the child received earned income that was reasonable. For example, a parent should not pay a child $1,000 for shoveling the sidewalk one time.
What about market fluctuation?
For a younger child, donât get overly concerned about putting the Roth IRA money in stocks or stock mutual funds, which historically have made the most money over time compared to putting it in things like bank CDs. The best safety against market fluctuation is time, and for a younger child, statistically speaking, they will have a lot more time to average out the fluctuation in the market and likely end up with some good average returns.
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