Keep these tips in mind when you’re planning a home office:
- Be sure it’s ergonomically correct
- Find the optimal location
- Consider used office furniture
- Incorporate lighting, plants and sound
Should you convert all or a portion of your Traditional IRA assets to a Roth IRA account? If the answer is yes, you should consider opening a Discover Roth IRA Certificate of Deposit (CD).
Whether a conversion is right for you depends on the amount of time you plan to leave the assets invested, your estate planning strategies, the federal income tax bill that a conversion is likely to trigger, as well as other factors unique to you.
Potential benefits of converting from a Traditional IRA to a Roth IRA include:
Investors who convert proceeds from a Traditional IRA to a Roth IRA are required to pay taxes on the pre-tax amount that is rolled over for the year it is distributed from the Traditional IRA. Because Traditional IRA contributions are typically made on a before-tax basis, the full amount of the conversion is usually taxable at ordinary rates. When a tax deduction was not taken for the Traditional IRA contribution, only the investment earnings portion of the conversion will be subject to tax upon distribution. If you have a mix of deductible and non-deductible contributions, you may need the assistance of your financial advisor to calculate the taxable amount of the conversion. A conversion, if done incorrectly, could trigger a 10% IRS penalty for early withdrawals or 20% rollover tax withholding. It is important to seek competent tax advice before completing a conversion.
Another cautionary drawback to performing a Traditional IRA to Roth IRA conversion is that starting in 2018, that conversion cannot be “un-done” through a recharacterization of the conversion amount.
A conversion from an existing Traditional IRA to a Discover Roth IRA CD may be more attractive the further you are from retirement. The longer your earnings can grow in your Discover Roth IRA CD, the more time you have to accumulate tax-free earnings. Careful consultation with your financial advisor and tax professional is a good idea before you make your choice.
In addition to offering IRA CDs to help you grow your retirement savings, Discover also offers an Online Savings Account to help you with your short-term savings goals and a full range of CDs to help you save for the future. Open an account online or call our 24-hour U.S.-based Customer Service at 1-800-347-7000. For IRA CD-related assistance, call 1-888-204-8966.
The article and information provided herein are not guaranteed by any party and are intended for educational purposes only. Other factors not represented in this article may influence the amounts you are able to contribute or deduct. The information included is not advice and it may not reflect actual products, services, rates, APYs and/or terms available from Discover Bank. Nothing contained in this article is an offer, solicitation or guarantee for any product or service that may be available from Discover Bank. You may want to contact a financial advisor or tax professional with respect to information contained in this article and how it relates to you.
1IRA account holders (both Traditional and Roth) may make qualified withdrawals before age 59½ only if they meet specific criteria established by the IRS (disability, qualified first-time home buyer, and others). Consult the IRS website for additional information.
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