Talk:Individual retirement account/Archives/2013

Old uncatorgized discussion

See Talk:Retirement plan Chris 02:54, 30 Sep 2004 (UTC)

Hi, you moved this material in from Pension, but it is barely correct for a general discussion of IRA's:

As defined contribution retirement plans, IRA's are characterized by a lack of institutional sponsor to guarantee future benefit amounts, so the individual has to assume the risk of future investment returns being less than expected. In return, the individual gains the flexibility to tailor the portfolio to his or her liking.

The basic problem is that the terms DC and DB only apply to employer sponsored plans (They are from Erisa era legislation I believe) and are not applicable to Roth, traditional or rollover IRA's. That makes the above innapropriate for this article. In addition an IRA can be funded with a fixed annuity that does offer guaranteed pricipal and can offer guaranteed income, making the statement misleading at best. - Taxman 03:56, Oct 1, 2004 (UTC)

Excellent point. That's why I was trying to attract the attention of others to help with these topics--getting a little cross-eyed after all that reorganizing. Thanks for all the great edits and feedback. Chris 04:49, 1 Oct 2004 (UTC)

Speaking of pedantic, "pedantics" is not a word. One could use pedantries, pedanticisms, etc.

You could if the pedantic was getting a little silly in their pedanticisms. --SheeEttin 01:47, 5 December 2005 (UTC)

On Linking To This Article

If you're including a reference to Individual Retirement Accounts elsewhere, be aware that 'IRA' is the very well-known abbreviation for the Irish Republican Army; so if you write a sentence like "The American Silver Eagle bullion coin may be used to fund IRA investments," (as the American Silver Eagle page used to say), British readers are likely to read this as "The American Silver Eagle coin is probably used to fund terrorism" - which probably isn't what you meant.... TSP 20:36, 7 Apr 2005 (UTC)

Correct name really is "account"

One hates to nit pick, but the statement that the "umbrella" term for the concept is legally Individual Retirement Arrangement instead of account is simply incorrect. The individual retirement account was created by amendments to the Internal Revenue Code made by the Employee Retirement Income Security Act of 1974 (ERISA), which enacted (among other things) Internal Revenue Code sections 219 and 408 relating to IRAs. Subsection (a) of section 408 defines the term "individual retirement account" and subsection (b) defines the term "individual retirement annuity." An individual retirement account and an individual retirement annuity are two different but related legal concepts under the Internal Revenue Code, and both terms are directly from the statute itself.

IR "accounts" and IR "annuities" are collectively referred to as "individual retirement plans". See Internal Revenue Code section 7701(a)(37).

From a technical legal standpoint, it is therefore incorrect to say that the use of the word "account" is incorrect, as account is the term actually used in the law itself. I'm not sure where the editor who wrote otherwise obtained his or her information, but I invite everbody to look up the actual statute and make the appropriate change in the article. Famspear 00:04, 28 December 2005 (UTC)

[Copied and pasted by me (Famspear) from Taxman's User talk page, to show that Taxman was also partly right and I was partly wrong Famspear 20:55, 30 December 2005 (UTC) :] Dear Taxman: I just added some more information to the article on IRAs about the term "arrangement," which I found also appears in certain Treasury regs (and, as you pointed out, in IRS Pub. 590). The fact that the term is used in a formal Treasury regulation (not just in an IRS publication) shows you were right about the term being used as an "umbrella" term. Therefore, my statement that "arrangement" is not an umbrella term was wrong. Instead, I should have said that the term is just not used that way in the statute itself (where the term is used in a more limited sense). Oh, I just love to split those legal hairs! Famspear 16:35, 29 December 2005 (UTC)

I disagree that 'account' is correct. It should be listed as an 'arrangement'. Go to the irs.gov website and search for IRA, everything that comes up defines it as an "Individual Retirement Arrangement". See topic 451 which states (copy/paste)Topic 451 - Individual Retirement Arrangements (IRAs) An individual retirement arrangement, or IRA, is a personal savings plan which allows you to set aside money for retirement, while offering you tax advantages. You may be able to deduct some or all of your contributions to your IRA. Amounts in your IRA, including earnings, generally are not taxed until distributed to you. IRA's cannot be owned jointly. However, any amounts remaining in your IRA upon your death can be paid to your beneficiary or beneficiaries. —Preceding unsigned comment added by 96.241.39.56 (talk) 03:08, 10 November 2008 (UTC)

Dear user at IP96.241.39.56: Thank you, but please re-read the discussion above regarding the statutes, the regulations, and the IRS publications. After reading the material more carefully, you should see that the terms, "account," and "arrangement," are both correct. The term "arrangement" is the umbrella term for individual retirement accounts and individual retirement annuities. All three terms -- "arrangement," "account," and "annuity" -- are legally correct. Yours, Famspear (talk) 03:38, 10 November 2008 (UTC)

Summary: The technical terms used the Internal Revenue Code itself are "individual retirement account" and "individual retirement annuity," which are collectively included in the term "individual retirement plans" in the Code.

The Treasury regulation uses the term "individual retirement arrangement" to describe both kinds of "individual retirement plans." The IRS publication (Publication 590) also uses the term "individual retirement arrangement," and differentiates between various types, such as "individual retirement account" and "individual retirement annuity."

The abbreviation "IRA" is used to describe both individual retirement "arrangements" and the more specific sub-category of individual retirement "accounts," thus (perhaps) leading to some confusion. Famspear (talk) 00:24, 5 April 2013 (UTC)

Penalty of overinvesting?

What is the penalty if you accidently go over the $4,000/year amount?

You can put in as much as you like, you just can't take an annual deduction in excess of the limit. Erisa Goss 18:44, 7 August 2006 (UTC)

Well sort of. I thought that too, until I looked it up in publication 590. With the IRS it's always more complicated. There is a 6% excess contribution penalty on traditional IRA's If you don't file a form with your return by your filing deadline to classify the excess contribution as a non deductible contribution. But if you do classify it as a non deductible IRA contribution, then you're right. The same 6% excess contribution penalty applies to Roth IRAs except for a Roth you are allowed to apply the excess contribution to the next year as long as the excess is below that year's contribution limit. - Taxman ^Talk 21:46, 7 August 2006 (UTC)

I looked at publication 590 and it looks like the 6% applies to each future year until the excess is removed (or perhaps applied to the future years' comtribution limits). As far as I can see this is for both Traditional and Roth IRAs. So Erisa Goss is in my opinion more "wrong" than "right" - you cannot make excess contributions without penalty. j-beda 20:56, 8 August 2006 (UTC)

That is correct, and I was wrong. That's why if it's important to you you should only go to a paid professional to get these answers. The penalty applies to any excess you make over the contribution limit that is not taken out before your filing deadline. The only time you can have non deductble contributions is if your income ends up above the phase out amount. You still can't contribute more than the limit without penalty. - Taxman ^Talk 21:41, 8 August 2006 (UTC)

What about distribution?

This article doesn't talk about distribution of funds, whether early, regular, or mandatory, and it doesn't mention the current retirement age and when mandatory distribution is required. Can someone familiar with this please add this information? -Orayzio 28 November 2006 (UTC)

Ask and ye shall receive. Is there anything else that is particularly important that should be covered? - Taxman ^Talk 00:26, 29 November 2006 (UTC)

Thanks, Taxman! I know that the "calculated minimum amounts" is related to life expectancy, but is there a reference that clarifies this or lists the actual tables? -Orayzio 00:45, 29 November 2006 (UTC)

Good point, I expanded a bit on that, but tried to limit the information to the important stuff; there are endless details of course. The tables are in publication 590, which is the listed reference. I'm weighing whether discussion of inherited IRAs is worth covering more, as the rules are extremely complicated and I'm not sure how important it is to the overall concept of an IRA. Maybe as the proportion of assets in IRA's that are inherited increases, it will be worth more space. - Taxman ^Talk 19:32, 29 November 2006 (UTC)

Taxes

I am wondering about IRAs. The article mentions that there are some hardships that allow withdraws. I understand that the withdraw will be taxed as income. Does this mean that it adds to the income for the year, or just that it is taxed at the same rate as normal income is taxed at? It seems that a $50,000 withdraw that adds $50,000 to someone's income for that year would place them in a higher tax bracket and force them to pay more taxes on the income they made. But that seems anthema to the used of the withdraw for hardship purposes. cds 04 March 2007

It adds to income - line 15 on the 1040 - and yes, that could certainly place you in a higher bracket. Who said it had to make sense? :) You don't need to have a hardship to withdraw from IRA's, but you may be able to avoid a penalty for certain circumstances. And if you have those circumstances it's possible those expenses will qualify as a deduction to offset the income. - Taxman ^Talk 21:39, 5 March 2007 (UTC)

Being in a higher tax bracket doesn't mean the income you previously made is taxed at a higher rate. It means that the new income is. In this case, only the IRA withdrawal money that bumped you into the higher tax bracket would get taxed at that higher rate. Mullibok 18:46, 3 April 2007 (UTC)

401k IRA Matrix

I originally created the article for 401k ira matrix. It was proposed to merge that article in with the Individual Retirement Account article. The reason why I created that matrix was because it was difficult to actually compare all those different retirement vehicles to each other and I believe that this format is much easier to read. Because of that, I suggest that this matrix be a standalone article because I don't want the original intention of this matrix to be changed. -EHollins 03:38, 22 March 2007 (UTC)

I agree, the simple table is more useful as a separate page for comparison purposes. Leave it as it is. Justzisguy 12:25, 18 April 2007 (UTC)

I agree as well. The table covers more than just IRA accounts. I would leave it alone as well.Woof 00:50, 24 April 2007 (UTC)

Concensus was No Merge - removed the banners. Morphh ^(talk) 13:10, 03 May 2007 (UTC)

Removing two External Links

I'm removing "for Self-Directed IRAs IRA Association of America" from the article as it is a commerical instead of informational site, and it isn't the subject of the article and "IRA Guides IRA investing guide, withdrawal guide among others" because the link isn't working Enuja 21:25, 22 August 2007 (UTC)

Named for Ira Cohen? Unlikely.

In November, a non-logged-in user added this statement:

The original IRA was developed in 1974 by a team led by William Lieber. The acronym was taken from the name of Ira Cohen-- the actuary working with them, and the man for whom the IRA was named.

The sentence about William Lieber was vandalized, then removed. I have removed the second sentence. I considered tagging it "citation needed" but it seems so unlikely to be true that I decided to remove it instead. If someone has a valid citation, my apologies, and they should reinsert the statement. Dpbsmith (talk) 03:41, 27 February 2010 (UTC)

Inheritance?

How is money in an IRA taxed if (I guess, when) the owner of the account dies? Is the fund subject to the usual inheritance taxes? With some types of account, an heir can be made co-owner in advance of the original owner's death, but it seems that this would be impossible for an IRA. — Preceding unsigned comment added by CarlFink (talk • contribs) 22:40, 3 March 2011 (UTC)

Requested move

The following discussion is an archived discussion of a requested move. Please do not modify it. Subsequent comments should be made in a new section on the talk page. No further edits should be made to this section.

The result of the move request was: page moved. Vegaswikian (talk) 02:18, 26 October 2011 (UTC)

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Individual Retirement Account → Individual retirement account –

Even though it might have been coined by a particular politician, it's not framed in the article as an entirely unique thing. Per WP:CAPS ("Wikipedia avoids unnecessary capitalization") and WP:TITLE, this is a generic, common term, not a propriety or commercial term, so the article title should be downcased. In addition, WP:MOS says that a compound item should not be upper-cased just because it is abbreviated with caps. Lowercase will match the formatting of related article titles. Tony (talk) 09:02, 19 October 2011 (UTC)

• Note: this RM was originally targeted at NAME, which I assume was a mistake. I have changed the proposed title to Individual retirement account instead, as that seems to be the intention of Tony's nom and consistent with other RMs he has started. Jenks24 (talk) 12:00, 19 October 2011 (UTC)
  • Thanks, Jenks. Moron me. Tony (talk) 13:14, 19 October 2011 (UTC)

The above discussion is preserved as an archive of a requested move. Please do not modify it. Subsequent comments should be made in a new section on this talk page. No further edits should be made to this section.

IRA CRITICISM

Circa 2008 American workers all were lamenting their IRAs had been practically cut in half: half of all their life savings simply disappeared.

Politicians did nothing to stop the rape of IRAs or recover the immense drop.

The article says nothing of sudden "very questionable" loss and the in-ability even for the masses to appeal to police or stop such theft.

The article says you "can protect it by moving it" but the methods all involve entrusting a similar money pool. And most involve being hit hard tax-time by middleman for the privelage of "protecting your money".

Looking for data reveals that institutes are not showing anything significant having happened in the period. However online articles of the even of government agencies explaining to people why "$11 TRILLION" just went missing from (IRAs) can still be found. The why doesn't data history charts show such a MASSIVE financial event? The cause?

For instance. If the loss fingerpoints "banks made mistakes in housing loans". This is simply a poor excuse for such an immense drop: as banks are always in such a condition. Still one has to ask: we don't care: where is the dang money even if that is so? — Preceding unsigned comment added by 72.209.222.174 (talk) 00:56, 11 September 2013 (UTC)