The Help Desk

Can I do an IRA rollover and a Roth IRA conversion in the same year?

I left my job in January and haven't worked again in 2012. When I left my employer, I rolled my 401(k) worth $90,000 into a traditional IRA. Since I have only one month of income this year, I am considering converting my traditional IRA into a Roth IRA. Can I do that in the same year as the initial rollover? — Michael

Without much income this year you're likely to be MORE

Should I cash in my nest egg to buy a house?

I am 64 and considering using a large portion of my retirement savings to purchase a HUD-owned home. Those savings are currently enough to support me into my 80s, along with my Social Security benefits. If I buy a home and pay cash, would a reverse mortgage be feasible? — Ken S.

Using a chunk of your retirement savings to buy a home at age 64 is a risky proposition, especially MORE

Will my Social Security benefit increase next year?

Will Social Security get a raise in 2013? — Gary B.

The Social Security Administration just announced a cost of living adjustment (COLA) of 1.7% for 2013. The increases will take effect on Dec. 1, 2012 and will appear in benefit payments starting Jan 1, 2013.

The COLA allows Social Security benefits (as well as federal and military pensions) to keep pace with inflation so the buying power of those payments holds MORE

Should I leave my 401(k) and IRA to my wife or a trust?

I'm married and have a 401(k) and an IRA. My house and bank account are listed as living trusts. Should the beneficiary for the 401(k) and IRA be my wife or the trust? — Gary

The right choice will depend in part on how long you want those assets to keep benefiting from tax-deferred growth. Naming your wife as a direct beneficiary means that she can roll those assets into her MORE

Does my employer match count toward my 401(k) cap?

I am under 50, so my 401(k) contributions are capped annually at $17,000. My company matches 4% of my salary. Does that amount count toward the $17,000 cap? Also, can I save an additional $5,000 annually in a Roth IRA, or would that amount be under the cap as well? Can my wife do the same? — Brian B.

Good news: Your employer's matching contribution does not count toward the $17,000 MORE

How do you minimize 401(k) expenses?

When I looked at the funds offered in my girlfriend's 401(k) plan, I noticed that almost all of the funds had maintenance fees of more than 1.65% and a 1% deferred load. Is this common for 401(k)s? Are there ways to minimize her 401(k) expenses? — Brian

You are right to be concerned, since those fees are fairly high. By comparison, MONEY recently reported that average annual expenses for plans of MORE

Can I be taxed twice on my retirement plan?

I paid state taxes on retirement contributions. Now I'm being taxed on withdrawals. Is that legal? — John Wallach, Elkton, Md.

Unfair, yes, but still legal. Pennsylvania, your former home, is one of only two states—New Jersey is the other—that tax retirement plan contributions that aren't taxed at the federal level. Instead, it's distributions that are tax-free in Pennsylvania. Maryland, like most states, taxes distributions, not contributions. Easing the pain: If you're MORE

Should I leave my IRA to my 90-year old mom?

I'm 63 years old and my mom is 90. If I die before her and she inherits my IRA, what percentage of the total IRA assets would she have to take yearly? Would it be better if a much younger member of my family inherits the IRA? – Name withheld

According to Don Richardson, a CPA in Stamford, Conn., the answer depends on how old you are when you die. If MORE

Are 401(k) loans taxed?

If I borrow from my 401(k), do repayments come out of after-tax or pre-tax dollars? If they come from after-tax dollars, is the money taxed when withdrawn a second time? — Joe C.

Your repayment of a 401(k) loan does come from after-tax dollars, and when you eventually withdraw those funds in retirement, they will be taxable as regular income. But this doesn't represent a second round of taxes. That's because MORE

Is my federal employee health plan a better deal than Medicare?

I am a retired federal government employee. My wife and I are covered through the Federal Employees Health Benefits Program (FEHB). I have been advised to not sign up for Medicare because the coverage overlaps and FEHB is a better deal. Is it? — Robert J.

The two programs cover similar expenses in many areas, but there are a number of important differences. For example, FEHB covers emergency care outside the MORE