My 11-year-old earns money umpiring baseball games. Can he open an IRA? Will it affect his college aid? — Rick Gross, Avon, Conn.
Assuming Junior is willing, a Roth IRA (which grows and can be tapped tax-free) is a home run. In 2013 he can put in the lesser of $5,500 or his earned income. Does he earn just a few hundred dollars? You'll need a firm with a low minimum, such as Charles Schwab.
Don't worry about college. IRAs aren't used to set federal aid. Though about 260 schools doling out aid ask about IRAs, retirement money is counted only sometimes, such as when a wealthy family has split up assets, says FinAid.org publisher Mark Kantrowitz.
Your son may make too little to file taxes, says H&R Block's Gil Charney, but it's not a bad idea to save W-2s or 1099s proving earned income.
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If I retire overseas, can I lower my taxes by declaring residency in any state I want? — C. Czuchna, Gainesville, Va.
Not quite. You can't just declare residency; you have to live there before taking off. Steps to show you've really moved to the no-income-tax state of your dreams (such as Florida, Nevada, or Texas): buying a home (and selling your old one), getting a driver's license, and registering to vote.
Do MOREApr 27, 2013 6:30 AM ET
Can I take money tax-free from my 401(k) for a down payment on a home? — Dev Ananth, Plano, Texas
You may be able to pull money out, but you can't avoid taxes. And that's not the only downside.
Most plans let you borrow half of your savings, or $50,000 (whichever is less); you'll repay that with after-tax dollars — not the untaxed dollars you contributed originally. Leave your job without repaying and MOREApr 13, 2013 6:30 AM ET
I put tax-deductible and nondeductible money in my IRA. What comes out first? — Duane Hoffmeyer, Mesa, Ariz.
Most money in traditional IRAs comprises tax-deductible contributions and any account earnings over the years, all of which is taxable when you pull the money out. You evidently also made nondeductible, after-tax contributions, which exit your IRA tax-free.
To answer your question, the funds come out simultaneously. Add up your after-tax contributions. The percentage of MOREMar 31, 2013 3:17 PM ET
My husband and I are getting divorced after 24 years. I'm 59 and on disability; he's 65 and not yet retired. He says that after the divorce I can collect on his Social Security, which will be higher than my disability benefits. Is that correct? Also, would I be able to collect on his Social Security after his death? — Name withheld
Based on your information you may be eligible for MOREDec 31, 2012 6:30 AM ET
My husband was downsized a year ago. He is eligible to start taking a pension from his former company, but they refuse to give him any information with regard to projections. How do we decide when to start his pension if they won't tell him the difference in payout for year 62, 65, etc.? — M. Anderson
If you haven't done so already, refer to the section in your husband's summary MOREDec 26, 2012 6:30 AM ET
Which states are most tax-friendly for retirees? — Larry O.
There are a lot of things to think about when choosing a place to retire, and state taxes are definitely worth considering. It's particularly useful to look at how states tax Social Security, pensions and IRA distributions, says Liane Warcup of Geneva, Ill.-based Clarus Financial Planning.
For instance, Social Security benefits are federally taxed, but they are excluded at the state level in MOREDec 19, 2012 6:30 AM ET
Let's say I make a loan to my (or my wife's) business by borrowing from my 401(k) and using the money for business expenses. Is the interest the business pays back to my 401(k) plan tax deductible? — Michael R.
The short answer is no, according to Myrna Mitnick, a senior tax manager at Baltimore, Md.-based CPA firm Leonard J. Miller & Associates. The IRS typically does allow businesses to deduct MOREDec 14, 2012 6:30 AM ET
Should I purchase additional service credit to increase the final compensation for my pension plan? I'm currently 42 and plan to retire at 62. At that age, I will receive 81.5% of my $10,000-a-month income. I was told I could increase my final compensation by about 10% at the cost of $82,000 (which I plan to transfer from my 457 plan). Is this a good idea? – Name withheld
Given your MOREDec 12, 2012 6:30 AM ET
Can I invest both pre- and post-tax dollars in the same 401(k)? If so, how do I know what taxes I owe at withdrawal? — Kathy B.
Whether or not you can invest both pre-tax and after-tax dollars in the same 401(k) depends on the plan itself. It's a safe bet that your employer's 401(k) plan permits pre-tax contributions, according to Kaye Thomas, who spent two decades as a tax lawyer MOREDec 11, 2012 6:32 AM ET
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