Individual Retirement Accounts (Traditional and Roth)

What this video covers

• The combined contribution limit across all Individual Retirement Accounts (IRAs), the catch-up amount for age 50+, and why earned income is the ultimate ceiling
• How spousal IRAs let a working spouse fund a non-working spouse's account on a joint return
• Why Traditional IRA deductibility phase-outs only apply when the contributor or spouse is covered by an employer plan, and what happens when neither spouse is covered
• The critical exam distinction: Traditional IRAs have deduction phase-outs (anyone can contribute), while Roth IRAs have contribution phase-outs (high earners are barred entirely)
• The two Roth IRA qualified distribution rules (5-year clock plus age 59.5, death, disability, or first-time home purchase) and why Roth contributions can always be withdrawn tax-free and penalty-free
• The 10% early withdrawal penalty exceptions specific to IRAs, including the SEP schedule trap and the 12-week unemployment requirement for health insurance premiums
• RMD start dates at age 73, the April 1st delay trap that forces two distributions in one year, and why RMDs can never be rolled over
• Direct versus indirect rollovers, the 20% mandatory withholding on indirect plan distributions, and the once-per-12-month limit on indirect IRA-to-IRA rollovers
• Roth conversions: why income limits apply to contributions, never to conversions, and the tax treatment of converted amounts