What are three types of money? Qualified vs non qualified money:
What is nonqualified money?
Non qualified money or non qualified investments is money you pay taxes every year. If you take out the money, you don’t owe any in taxes. You have already paid the income taxes. To put it simply, this money is not qualified for any tax free growth like in a retirement account. Individual, joint, or trust trust accounts are examples of a type of account you may have at an investment firm or bank that you would need to pay tax on growth. It is also important to understand the tax consequences of a Non qualified deferred annuity and Non qualified annuity rollovers before any action is made on these investments and accounts.
What is qualified money?
This could be your ira, 401k, or any type of tax deferred saving plan you have on your own or through a company. That money your required to take out at 70 1/2 . If you take it out at 59 ½ and dont have special circumstances, plan, or strategy. you are gonna take a penalty.
What is roth Ira money?
The third type of money is the most sought after. It is roth ira money. That money you're not forced to take out at 70 ½ and you can’t take it out at 50 ½ and it is all tax free forever. The money you put into it grows tax free.
Simplify your life! You can boil down your investment accounts, in most cases, down to 3 accounts or less. When you understand what 3 types of money each account you have would fall under, you can consolidate your 11 accounts you current manage down to a simpler and more organized three. Knowing the different types of money, the difference between qualified and non qualified money allows you to declutter your plan.
This video helps to explain everything here:
https://www.fundmax.net/blog/single-post/2018/04/20/three-ways-to-declutter-your-portfolio-1
Hope this write up helped out, let me know your thoughts or questions below!
Submitted July 12, 2018 at 10:31AM by Fundmax https://ift.tt/2JmedCg
