Discover what a Roth IRA is and how it works, including income-based eligibility and tax-free growth, and why it may be ideal if your tax rate is higher in retirement. https://t.co/gEw5YfLUuB ...

In a previous article about Roth conversions, an advisor wrote: “For many folks, a prime time for Roth conversions takes place during the years after retirement but before Social Security and RMDs kick in. Those can be relatively low-income years during which initiating a conversion can result in a triple benefit. Those benefits are: lower tax bills, reduced RMDs and future tax-free growth.” My question is based on what I thought the rules were for Roth contributions, which is that you must have earned in ...

Core Insights - The discussion emphasizes the importance of Roth IRAs as a tax-efficient retirement savings option, particularly in light of anticipated tax increases [2][5][7] Group 1: Roth IRA Insights - Ed Slott describes IRAs as a "ticking tax time bomb," indicating that withdrawals during retirement will be taxed at potentially higher rates in the future [3] - The Congressional Budget Office projects that the "One, Big Beautiful Bill Act of 2025" will increase national debt by $3.4 trillion, suggesting that tax rates may rise to offset this debt [4] - Slott advocates for paying taxes now at current low rates by utilizing Roth IRAs, which allow for tax-free growth since they are funded with already taxed income [5][7] Group 2: Employer-Sponsored Plans - A significant majority of employers (94%) offer Roth 401(k) options, yet only 16.2% of eligible employees are contributing to these plans [6] Group 3: Conversion Strategies - Individuals with traditional IRAs or 401(k) plans have the option to convert to a Roth IRA, but should act promptly to avoid required minimum distributions (RMDs) that cannot be converted [8]

Group 1 - Building an emergency fund and contributing to a 401(k) plan are essential financial steps for managing unexpected expenses and building long-term wealth [1] - After establishing basic savings and retirement plans, individuals should consider enhancing their financial safety net and exploring additional investment opportunities [2] Group 2 - Health Savings Accounts (HSAs) provide three layers of tax advantages: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses [3] - HSAs require a high-deductible health insurance plan for qualification, and non-medical withdrawals before age 65 incur a 20% penalty plus taxation [4] Group 3 - Roth IRAs differ from 401(k) plans in tax treatment; contributions to Roth IRAs are not tax-deductible, but all withdrawals, including income and gains, are tax-free [5] Group 4 - Insurance is crucial for asset protection, providing peace of mind against significant losses [6] - Individuals should consider various types of insurance, including health, vehicle, homeowners/renters, disability, umbrella/liability, life, and long-term care insurance, based on their financial situation [7]

Core Insights - Investors must begin taking required minimum distributions (RMDs) from tax-deferred accounts at age 73 or 75, depending on their birth year, which can result in significant cash that may not be needed for living expenses [1][2] - A Roth IRA is suggested as a suitable option for reinvesting unneeded RMD cash due to its tax-free withdrawals and exemption from RMDs during the account holder's lifetime [1] Group 1: RMDs and Roth IRA Contributions - Direct conversion of RMDs to a Roth IRA is not allowed, but individuals can contribute to a Roth IRA if they have sufficient earned income, with a contribution limit of $7,000 plus an additional $1,000 for those aged 50 and above for 2024 [2] - Earned income includes wages, commissions, bonuses, and self-employment income, while it excludes pension payments, interest, dividends, rental income, and other non-qualifying sources [3] Group 2: Income Limits and Withdrawal Rules - Roth IRA contributions are subject to income limits, with phase-out starting at a modified adjusted gross income (MAGI) of $146,000 for single filers and $230,000 for joint filers, becoming ineligible after $161,000 and $240,000 respectively [4] - A five-year waiting period is required after the first contribution to a Roth account before withdrawals can be made, and heirs must withdraw the entire balance within 10 years [5] Group 3: Alternatives to Roth Contributions - For those unable to contribute to a Roth IRA, options exist to eliminate, reduce, or delay RMDs, including converting an IRA to a Roth account after taking the RMD for the year, with taxes applicable on the converted amount [6]

Core Insights - Zoetis Inc. has secured a new five-year $1.25 billion senior unsecured revolving credit facility, enhancing its financial flexibility [2][3] - The new credit facility replaces a previous agreement from 2022 and is administered by JPMorgan Chase, with other major banks acting as syndication agents [2] - The facility allows Zoetis to borrow against base or SOFR rates with a margin linked to its debt ratings, providing liquidity for operations and strategic initiatives [3] Financial Flexibility - The new credit facility has no mandatory prepayments and offers flexible repayment terms, which is advantageous for the company's financial management [3] - This move is expected to support Zoetis's operations and strategic initiatives, indicating a proactive approach to maintaining liquidity [3] Company Overview - Zoetis Inc. specializes in preparing medicines, vaccines, diagnostics, and precision health solutions for both livestock and companion animals globally [3] - The company is recognized as one of the best stocks for Roth IRA investments, highlighting its potential as a stable investment option [1][3]

Core Insights - Elevance Health, Inc. (NYSE:ELV) is reaffirming its full-year 2025 earnings guidance, expecting earnings of approximately $24.10 per diluted share, which includes about $5.90 per share in net unfavorable items, leading to adjusted earnings of roughly $30.00 per diluted share when excluding these items [2][3] Group 1 - The company anticipates a benefit expense ratio close to 90% for the year, based on current market conditions, regulatory factors, and medical cost trends [3] - Elevance Health operates under several brands, including Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon, providing health benefits, pharmacy, and healthcare services across the U.S. [3] - Elevance Health is recognized as one of the best Roth IRA stocks to invest in currently [1][3]

Core Viewpoint - NextEra Energy, Inc. is recognized as a strong investment opportunity, particularly highlighted by Goldman Sachs' reaffirmation of a 'Buy' rating with a price target of $91.00, reflecting confidence in the company's ability to manage regulatory challenges and maintain steady revenue growth through gradual rate increases [2][3]. Group 1: Company Overview - NextEra Energy, Inc. is a leading U.S. utility and clean energy company, generating power through various sources including wind, solar, nuclear, natural gas, and battery storage solutions [4]. Group 2: Financial Outlook - The Florida Power & Light subsidiary of NextEra Energy plans to implement a rate increase of approximately 2% per year on average until 2030, which is designed to ensure sufficient revenue generation while minimizing the impact on customers [2]. - The introduction of rate adjustment tools and SoBRA aims to enhance the company's outlook for predictable returns, with a final commission order expected this fall that could further stabilize the company's financial and operational momentum [3].

Core Viewpoint - The article discusses the 11 best stocks to invest in through a Roth IRA, emphasizing the importance of selecting the right stocks for long-term wealth creation in an uncertain economic environment [1][4]. Investment Strategy - A Roth IRA allows for tax-free investment growth and withdrawals, making it a powerful tool for long-term wealth creation, especially for individuals aged 35 to 60 [2]. - The selection of stocks for a Roth IRA is crucial, particularly in light of recent market volatility and economic uncertainty [3]. Market Context - On September 5, 2025, major market indexes experienced declines following a weaker-than-expected jobs report, raising concerns about economic growth [3]. - The S&P 500 fell by 0.32%, the Dow decreased by 220 points, and the Nasdaq dropped by 0.03%, despite reaching record intraday highs earlier in the session [3]. Methodology for Stock Selection - The list of the 11 best Roth IRA stocks was curated based on long-term growth catalysts, dividend growth history, solid business fundamentals, and positive analyst coverage [6]. - Hedge fund sentiment was assessed using Insider Monkey's hedge fund database, which tracks over 1,000 hedge funds, ranking stocks based on the number of hedge funds holding stakes as of Q2 2025 [6][7]. Featured Stocks - **NextEra Energy, Inc. (NYSE:NEE)**: - Number of Hedge Fund Holders: 66 - Goldman Sachs reaffirmed a 'Buy' rating with a price target of $91.00, highlighting the company's strong regulatory navigation and gradual rate increases [9][10][11]. - **Honeywell International Inc. (NASDAQ:HON)**: - Number of Hedge Fund Holders: 67 - Announced a $600 million equity capital raise for its quantum subsidiary, Quantinuum, valuing it at $10 billion pre-money, aimed at accelerating the development of next-generation quantum computing [13][14][15]. - **Elevance Health, Inc. (NYSE:ELV)**: - Number of Hedge Fund Holders: 67 - Expected to reaffirm full-year 2025 earnings guidance of approximately $24.10 per diluted share, with adjusted earnings projected at around $30.00 per diluted share [17][18].

There's a big difference in the maximum annual contributions allowed to a 401(k) or an IRA regardless of whether it's a Roth or a traditional account. https://t.co/ZHFakoKDVB ...