Retirement planning is the process of planning for one's retirement, including saving and investing for retirement, estimating future expenses and income, and planning for other retirement-related goals. It is important to plan for retirement early in life, as it can help ensure that one has enough money to live comfortably during retirement.
An IRA (Individual Retirement Account) is a type of savings account that provides tax benefits for retirement savings in the United States. There are two main types of IRAs: Traditional and Roth. Contributions to a Traditional IRA may be tax-deductible, and the money grows tax-deferred, but withdrawals in retirement are taxed as income. Contributions to a Roth IRA are made with after-tax dollars, but qualified withdrawals in retirement are tax-free. IRAs have contribution limits and restrictions on withdrawals before age 59 1/2 to encourage long-term savings for retirement.
The contribution limit for an individual retirement account (IRA) for the year 2023 is $6,000, with an additional catch-up contribution of $1,000 for individuals who are age 50 or older. These limits apply to both Traditional and Roth IRA contributions. Keep in mind, there may be income limits that may affect your ability to contribute the full amount. It's always a good idea to consult a financial advisor or tax professional for personalized advice.
It's important to note that there are contribution limits and eligibility requirements for IRAs, so make sure to research and understand these before you start the funding process.
You can withdraw funds from an individual retirement account (IRA) at any time, but there may be penalties for withdrawals made before age 59 1/2. If you withdraw funds before reaching that age, you may be subject to both federal and state income tax on the distribution, as well as a 10% early withdrawal penalty from the IRS. There are some exceptions to the early withdrawal penalty, such as for first-time homebuyers or for certain medical expenses. It is recommended to consult with a financial advisor or tax professional for more information on IRA withdrawals and the potential implications.
It is difficult to determine the exact amount you will earn in an IRA if it grows at 7% per year for 25 years, as it depends on the starting balance and contributions made over the 25-year period. However, you can use the formula for compound interest to estimate the future value of your IRA. The formula is:
FV = PV * (1 + r/n)^(nt)
Where:
PV = the present value or starting balance of the IRA r = the annual interest rate (7%) n = the number of times the interest is compounded per year t = the number of years (25)
Note that this is just an estimate and actual results may differ due to various factors such as taxes, fees, and inflation.
To calculate the total amount you would have in an IRA after 25 years with an annual contribution of $6,500 and a 7% interest rate, you can use the formula:
A = P * (1 + r/n)^(nt)
Where: A is the end amount P is the principal amount (the amount you initially invest) r is the interest rate (expressed as a decimal) n is the number of times interest is compounded per year t is the number of years
In this case: P = 6500 * 25 = $162,500 (total contribution over 25 years) r = 0.07 n = 1 (once per year) t = 25
Plugging these values into the formula, you get:
A = $162,500 * (1 + 0.07/1)^(1 * 25) = $657,914.07
So, after 25 years of contributing $6,500 annually and with a 7% interest rate, you would have approximately $657,914.07.
Keeping the Match after withdrawing money from your funds depends on how long you've had the contribution in your account and the total balance of your account.
If you’ve held your eligible contributions for at least 5 full years, the Match is yours to keep. If you withdraw money earlier than 5 years, and your remaining balance stays at or above your contribution amount that earned the Match, it’s yours to keep.
For example, if you contributed $1,000 and earned a $10 Match on June 1, 2025, you can withdraw all of it on or after June 1, 2030.
If you choose to withdraw money from your IRA or brokerage before June 1, 2030, you’ll keep the $10 Match if the remaining balance is at least $1,000 (which represents your eligible contribution amount that earned the $10 Match).
The following shows some more examples of the Early Match Removal Fee:
| Contribution | Match | Withdraw date | Account value | Withdraw amount | Remaining balance |
|---|---|---|---|---|---|
| $100,000 | $1000 | 5 or more years | $100,000 | -$80,000 | $20,000 |
| $100,000 | $200 | Less than 5 years | $100,000 | -$80,000 | $20,000 |
| $100,000 | $100 | Less than 5 years | $10,000 | -$90,000 | $10,000 |
| $100,000 | $150 | Less than 5 years | $15,000 | -$85,000 | $15,000 |
The IRA Match generally would be taxable during a conversion because it’s counted as interest income for tax reporting purposes. Everyone has a different tax situation and should consult a tax advisor.
The IRA Match is treated as interest income in your IRA. We won’t deliver a 1099-INT due to the tax status of IRAs.
The match will be paid in US Dollars and sent to the account in cash after 5-10 days after the 5-year anniversary of the account.
Genesis must receive the paperwork through our platform to retitle the account. Once retitled, the account will remain active and will qualify for the match – If the account is closed before the 5-year time period – no monies will be paid on the match. If the account is split up into two or more accounts the original match will be split up based on the percentage that each account receives from the original deposit . For example, if two children inherit the account and want to create two accounts and split the deposit amount- each will receive 50% of the match at the anniversary of the original account – ‘The new accounts cannot be removed from the platform and will receive the transfers from the original account based on the split authorized . Each new account must authorize the match and sign new agreement paperwork to be eligible for the match.
*Limitations
All new accounts must be US citizens or corporations or trusts. All new accounts are covered for the match including IRAs, ( Roth and Traditional) , Individual accounts, trust accounts, corporate accounts, 529 plans, Coverdell plans, crypto accounts , state, and local government accounts. The account must be opened as a discretionary account with full authority for trades by the investment advisor . Individual Federal Treasury or Bond accounts do not qualify . There is a limitation of $2,000,000 that will be match or $20,000. All monies deposited on a match will be in US Dollars 7-10 days following the 5th year anniversary of the account.
Monies deposited into the account in the first 3 years ( up to the anniversary of the 3rd year) will also be matched with 1%. Any monies deposited in the last two years( 4 and 5) will not be matched. If the invested monies drop below the original or subsequent deposits by 20 or more percentage points the match will be at 80% and not lower. For example, the account loses 40% in 5 years( highly unlikely) the match will be 80% of the original deposits and not 60%. The account is guaranteed 80% match or more for the 5-year period.
Genesis has the right to close the account if the investments are deemed to be suspicious or laundering is suspected based on the information given to Genesis. All account owners must be USA citizens . Corporate accounts must be owned 100% by USA persons or USA entities.
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