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  • Answer count
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    April 2, 2013
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    July 17, 2015
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AskKen's Answers
1 2 3 4 5 ... 33 next>>
 

Can I hold Canadian stocks in my Roth IRA?

Thanks for your question about the holdings in your Roth IRA. Yes, you can trade Canadian stocks, along with those of 24 other countries in your Fidelity Roth IRA. You can also mix domestic and international stocks within a single Roth IRA. If you have additional questions about your Roth IRA, feel free to call us at 800-343-3548.

Ken
2 weeks, 1 day ago
by
AskKen
 

Retirement for Son

My son has just turned 21 and He would like to start saving for retirement. There is no retirement plan at his current job, but he would like to have regular deposits made from his checking account. He would like to start out with $3000 initially. Is there a minimum amount needed to start? I was thinking about a Roth IRA since the money is after taxes. Would He have the same investment options as I have from the Comau group? He is also interested in buying stocks sometime in the future.

Thanks
Starting to save early is the easiest way to make sure you have enough for retirement, so it’s great that your son is already thinking about this. A Roth IRA could be a good way to get your son started saving for retirement. There is no minimum amount to open and fund a Roth IRA, but some investment options will have minimums associated with them (e.g., most mutual funds).

With a Fidelity Roth IRA, he would have all of the options available in our full brokerage account. You can find more information about opening a Roth IRA on this page: https://www.fidelity.com/retirement...

Thanks for the question.

Ken
2 weeks, 1 day ago
by
AskKen
 

My wife and I each have Roth IRAs and are contributing the maximum yearly but feel we are paying too much in fees. Can Fidelity offer a better deal ?

Each IRA is around 24K and is invested in a number of funds. Each Roth charges us 40 dollars a month. I feel this is way to much. I don't trade much and don't plan on it. I think it gets rebalanced now and then and every month purchases to the different funds are made.
I put in 6.5k for myself and 5.5k for my wife. Maybe this is the going rate, I don't know but it seems high to me especially for such small account. If I were to transfer these to Fidelity and link them to my checking account and not trade much but contribute monthly, could I do better than 40 dollars a month per account when all of the fees are paid ?
Thanks for the question about fees related to your Roth IRA. While there can be fees, like low balance fees or fees that are specific to the investments held within your account, there are no monthly maintenance fees associated with having a Fidelity Roth IRA.

Give us a call at 800-343-3548 if you want to discuss ways to avoid investment-specific fees in your IRAs.

Ken
2 weeks, 1 day ago
by
AskKen
 

What is the best Titleship to make Spousal IRA inheritance last the longest time. Take as rolled into the Spouses IRA or take an inherited IRA

Recently looked at some documentation that seems to state that a person inherits an IRA from their Spouse and rolls it into his / her own IRA that the MRD based payout is almost twice as long as if that person makes an inherited IRA and has to use a Single Life Expectancy Table. If the beneficiary wants to minimize IRA distributions and keep the money the longest time it seems clear that the consolidation approach is clear. Am I missing something since this seems so obvious?? Both individuals are over 78 years of age (78 and 80)
Thanks for your question. If you inherit an IRA from your spouse, there are two options. The assets can be rolled into your IRA, or transferred to an Inherited IRA. With the first option, minimum required distributions (MRDs) would be calculated using the Uniform Lifetime Table. This table assumes that MRDs would extend over two lives, yours and your spouse’s, so the MRD is lower than what it would be with the second option, an Inherited IRA, which uses the IRS’s Single Life Expectancy Table.

Let’s look at an example using the age of 78 on both the Uniform Lifetime Table and the Single Life Expectancy Table:

For the Uniform LifetimeTable: a 78-year-old person would use the life expectancy factor of 20.3.

For the Single Life Expectancy Table: a 78-year-old person would use the life expectancy factor of 11.4.

So at the age of 78, in the example, a spouse who is rolling the deceased spouse’s IRA assets into their own IRA would be required to take a smaller MRD using the Uniform Lifetime Table, than if the assets were transferred into an Inherited IRA and the Single Life Expectancy Table were used.

For some spouses older than 70½ and already taking MRDs, it might make sense to put the assets into the Inherited IRA and use the “wait until” rule. This rule allows you to delay taking MRDs for the inherited assets until the deceased spouse would have been 70½. So if your deceased spouse was younger than 70½ it might make sense to delay taking MRDs using that IRS exception.

If you have other questions about the Inherited IRA MRD rules you can visit our page:
https://www.fidelity.com/retirement...

I hope this is helpful.

Ken
3 weeks, 3 days ago
by
AskKen
 

Is my Roth IRA contribution limit reduced when I also contribute to a 401(k)?

Thanks for your question. No, your ability to contribute to a Roth IRA is not reduced by the contributions you make to a workplace plan such as a 401(k). In fact, a Roth IRA is a great way to supplement your retirement savings and provide you with a source of tax-free income in retirement, since contributions to a Roth are made after taxes are taken out. For 2015, contribution limits to a Roth IRA are $5,500 for those under age 50, or if you are over age 50, the limit is $6,500. There are income restrictions that may apply. You can read about those here: https://www.fidelity.com/retirement...

I hope this is helpful.

Ken
4 weeks, 2 days ago
by
AskKen
 

Can I Take money out of a traditional IRA and deposit it into a Roth ?

The Roth is already open.
Yes, you can move money from a Traditional IRA to a Roth IRA through a process known as a Roth IRA conversion, but there are potential tax implications if you do so. Basically, any money that wasn’t already taxed in your Traditional IRA, including contribution amounts that you deducted from your taxes and any interest earned on your contributions, will be subject to taxes when it is withdrawn for the Roth conversion. The amount you convert will be counted as income, and the taxes owed could be significant. Remember too that money coming out of a Traditional IRA comes out pro-rata, meaning that you cannot select only previously taxed amounts to convert.

It’s usually a good idea to talk to your tax advisor to make sure you understand all of the implications of a Roth IRA conversion based on your particular circumstances.
Thanks for your question.

Ken
4 weeks, 2 days ago
by
AskKen
 

Retirement account Rollover to an established IRA

If I rollover my retirement into an IRA that I have established already with Fidelity (Rollover IRA),will I have any tax liability that year that I do this ? Also is there any difference between a traditional IRA and a Rollover IRA account ??
Thanks for your question on the tax liability of a rollover. There should be no tax implications of rolling a workplace plan such as a 401(k) into an IRA as long as you are rolling the assets into the appropriate receiving account.

For example, there are no taxes due when rolling a Traditional 401(k) into a Traditional or Rollover IRA. A Rollover IRA is essentially a Traditional IRA that has been funded by a rollover contribution (which allows more than the normal Traditional IRA limit of $5,500 or $6,500 if over age 50).

Once you move the funds into the Rollover IRA, you can continue to make contributions to that account. But before doing so, you may want to consider whether you will want to roll the money back into another workplace plan at some future date. If you do, comingling contributions can complicate things or even disqualify you from moving back to a workplace plan. You can find more information about options for a 401(k) in this article: https://www.fidelity.com/viewpoints...

Ken
4 weeks, 2 days ago
by
AskKen
 

5 year Roth ageing requirement

I make multiple deposits to my ROTH (monthly transfers). Do I have to wait for each deposit to age for 5 years or once I hit the 5 year threashold of opening the ROTH every distribution is considered qualified (provided that I am over 59 1/2 or one of the other requirenments) ?
Thanks for the question. No, you do not have to wait five years after each deposit to your Roth IRA before you can make withdrawals. The five-year aging clock on a Roth IRA starts January 1st of the year in which you make your first contribution. So even if you made a contribution on December 31st of a given year, you get credit for the entire year. The clock does not reset with subsequent deposits.

Ken
4 weeks, 2 days ago
by
AskKen
 

should I contribute to an IRA

We are high wage earners expecting to retire within 5 years at age 62. Would it be beneficial to contribute to a traditional IRA and immediately convert it to a roth IRA.
Thanks for your question. The IRS limits who can contribute to a Roth IRA based on income, and until 2010, there were also restrictions on who could convert money into a Roth. Those restrictions were lifted, so what you are asking about is possible, and in fact is a way for those whose income exceeds the limits to contribute to a Roth. But whether you will get a lot of benefit from it depends on your circumstances. If you don’t have existing Traditional IRA assets you can make nondeductible contributions to a Traditional IRA and immediately convert it with no tax implications. If you have existing IRA assets, then the money is converted pro-rata (meaning you can’t select only previously taxed amounts to convert) and there will likely be taxes due on at least the earnings and any pre-tax contributions.

Whether you will benefit depends on how you will use the distributions from the Roth. Will you need the money for expenses in retirement? Or are you looking for the potential estate planning benefits of a Roth—namely, no minimum distributions required, the ability to keep contributing to the account as long as you have income, and the ability to leave the assets to heirs tax-free.
I hope this is helpful.

Ken

Important Additional Information:
The tax and estate planning information contained herein is general in nature, is provided for informational purposes only and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
4 weeks, 2 days ago
by
AskKen
 

Transfer from a UK SIPP

I have a UK Self Invested Pension Plan - it is currently invested in mostly equities - UK and foreign. Is there a way to roll this over into a Qualifying Recognised Overseas Pension Scheme (QROPS) within Fidelity. Does a 401(k) qualify as a QROP and if so what do I need to do in order to roll over the funds.
Thank you for contacting us regarding your UK Self Invested Personal Pension. Based on current U.S. tax law and applicable IRS rules, a retirement or pension plan from a foreign country cannot be rolled into an IRA or qualified retirement plan.

The Chief Counsel of the IRS offered a memorandum on this topic in 2008 concluding that a distribution from a UK pension scheme is not a qualified rollover distribution under Internal Revenue Code Section 402(c)(4). As a result, Fidelity has since disallowed rollovers to a U.S. IRA or qualified retirement plan like a 401(k) of which Fidelity is custodian.

Thank you again for your question. I hope that this information can serve to help you narrow down what might be a more acceptable option for your foreign retirement savings.

Ken
1 month ago
by
AskKen