House Democrats contend the $15 per hour minimum wage bill will lift workers who have not seen the benefits of a strong economy.Politicsread more
The Philadelphia Fed saw its primary gauge measuring the sector jump from 0.3 in June to 21.8, far better than Wall Street estimates of 5 and the highest in a year.Economyread more
Stocks erased earlier losses, but the rise was kept in check as Wall Street digested a mixed batch of corporate earnings results.US Marketsread more
"It's better to take preventative measures than to wait for disaster to unfold," Williams told the annual meeting of the Central Bank Research Association.The Fedread more
The fact that interest rates are relatively low makes the idea of a so-called insurance rate cut later this month an attractive option for the Fed.Market Insiderread more
Video of the event does not show the president disagreeing with his supporters. Instead, it shows that Trump paused as the chant began, allowing his supporters to continue...Politicsread more
President Trump said he's looking at the JEDI Contract that will be awarded to Microsoft or Amazon.Technologyread more
Hacker Square at Facebook's headquarters pays homage to the company's early motto of moving fast and breaking things.Technologyread more
It's tempting to view Netflix as a possible replacement for the entire media ecosystem. But execs on its Q2 earnings call showed lower ambitions: It just wants to create the...Technologyread more
These are the stocks posting the largest moves midday.Market Insiderread more
Jeffrey Epstein, a former friend of Presidents Donald Trump and Bill Clinton, had asked a judge to release him on a bond of as high as $100 million or more.Politicsread more
Perhaps two of the sweetest words retirees long to hear are "tax free."
Though workers are told to put every spare pre-tax cent into a traditional 401(k) at work, the reality is that once the time comes to tap that account for income in retirement, income taxes will follow.
Here's the bright side: You can create a pool of tax-free retirement income. If you're lucky enough, you can even do it at work.
This year, you might even spot one of these plans at work. Nearly 85 percent of the 106 employers polled by Callan said they offered Roth 401(k) accounts in 2018.
The investment consultancy surveyed the companies in September and October.
Roth 401(k) plans are offered alongside traditional 401(k) plans. Between the two, you can save a total of $19,000 in 2019, plus $6,000 in catch-up contributions if you're age 50 and over.
"The power of the Roth 401(k) is tax-free compounding over time," said Ed Slott, CPA and founder of Ed Slott and Co. in Rockville Centre, New York.
Here's what you need to know about maximizing your tax-free savings.
Roth 401(k) plans are an especially sweet deal for high-income earners.
That's because you're barred from making a direct contribution to a Roth IRA if your modified adjusted gross income exceeds $137,000 and you're single ($203,000 if married).
See below for a comparison of Roth 401(k), Roth IRA and traditional 401(k) accounts.
Income caps don't apply to people saving in Roth 401(k) accounts.
You can also save more annually in a Roth 401(k) compared to a Roth IRA. Roth IRAs are subject to an annual contribution limit of $6,000 in 2019, plus $1,000 if you're 50 and over.
Got a Roth 401(k) at work? Consider moving some of your traditional 401(k) savings over to the Roth, in a move that's known as an in-plan Roth conversion.
Be aware that just like any direct contributions you make to your Roth 401(k), any pretax amounts that are converted will be included in your income and subject to taxes.
"The participant would be responsible for taxes on pretax principal and earnings, which could be a very large tax bill," said Jana M. Steele, senior vice president of defined contribution at Callan.
That increase in income can be dangerous for savers. In the worst case, it can move you to a higher tax bracket.
Consider converting pretax dollars in chunks at a time in order to avoid a sharp spike in income and taxes, said Slott.
Be sure to consult your financial advisor or accountant before you move forward.
Maybe you've left your employer, and you have money saved in your traditional and Roth 401(k) accounts.
Though you can't add more money into those plans, there is nothing that prohibits an in-plan conversion of what you've already saved, according to Steele.
The catch is that your retirement plan document would have to permit it, she said.
Another thing: You can't just write a check from an outside bank account to add after-tax money to your Roth 401(k).
"Receiving personal checks is something that the record keepers aren't set up for, and nearly no plans will permit that type of one-off contribution," said Steele.
Time is a major factor into getting the biggest bang for your Roth 401(k) buck.
Millennials are the best candidates to contribute to these accounts or to make a conversion of pretax dollars.
That's because they likely haven't reached their full earnings potential yet. As a result, the tax bill they'll pay for putting money into the Roth 401(k) will likely be lower now than in the future. They also have many years of market growth ahead.
"They're in lower tax brackets, so this is a way to buy off the taxes when you're young and have your savings grow tax free," said Slott.
If you're approaching retirement, you should still be cognizant of your timing if you do a Roth conversion.
That's because if the conversion increases your income, it could also raise your Medicare premiums.
How much you pay for Medicare Part B and Part D, which cover doctor's visits and prescription drugs respectively, depends on your modified adjusted gross income from two years ago.
See below for a breakdown of how your 2017 MAGI will affect your Medicare Part B premiums in 2019.
Here's what your 2017 MAGI means for your Medicare Part D premiums this year.
"If you're going to file for Medicare at 65 and you want to avoid the surcharge, then convert at age 62," said Slott.
One more potential thing for near-retirees to consider if they're weighing a last-minute Roth 401(k) conversion: This account, like your traditional 401(k), is subject to mandatory withdrawals after you turn 70½.
You can avoid these so-called required minimum distributions if you roll your Roth 401(k) into a Roth IRA, said Slott.