Individual Retirement Accounts (IRAs)
Chapters in this video
- 0:00 Meet Carla: traditional IRA contribution basics
- 2:01 Age 73 RMDs and the deduction phase-out trap
- 3:12 Roth IRAs: after-tax in, tax-free out, no RMDs
- 3:48 The 5-year rule and triggering events
- 4:38 Roth income limits that lock out high earners
- 5:15 Traditional vs Roth head-to-head
- 5:52 Prohibited investments: life insurance, collectibles, the gold coin exception
- 7:03 Rapid-fire exam recap
What this video covers
- The 2026 contribution limits ($7,500 base, $8,600 with the age 50+ catch-up) and the earned income requirement for any IRA contribution
- Why anyone with earned income can contribute to a traditional IRA, but high earners with workplace plan coverage lose the deduction past the modified adjusted gross income (MAGI) phase-out
- Required minimum distributions (RMDs) at age 73 for traditional IRAs, and why Roth IRAs have no RMDs during the owner's lifetime
- The two hurdles for a tax-free Roth distribution: the 5-year holding period (clock starts January 1 of the first contribution year, and does NOT reset) plus a triggering event (age 59-1/2, death, disability, or first-time home purchase up to $10,000)
- The Roth contribution income limits that lock out high earners entirely, unlike traditional IRAs where only deductibility is restricted
- Prohibited IRA investments: life insurance is never allowed, collectibles (art, gems, rugs, alcoholic beverages, most coins) are banned, and S-corporation stock is out
- The narrow exception that lets certain U.S. minted high-purity gold and silver coins into an IRA even though most coins are collectibles
Read the full lesson, free
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