Bank of America to Implement an Important Change in Your Retirement Account
The Bank of America is set to lift the ban placed on commission-based trading in every customer’s retirement account.
The Former Rule
In an announcement last Thursday morning, the Bank of America decided to lift a former Obama-era regulation that aimed to protect the investors from conflicted investment advice. Starting October 1, customers can now make commission-based trades on their individual bank retirement accounts.
The bank also revealed the decision was made based on the majority of its clients’ requests. Last 2016, the Bank of America had banned the said practice in preparation for the implementation of the Labor Department’s fiduciary rule last 2016.
While the other brokers fought the regulation back then, Merrill Lynch used the said ruling as an opportunity to court clients into getting their retirement accounts. They emphasized their undying commitment to work for the client’s financial goals.
At that time, the Bank of America moved to implement charging fees depending on the client’s assets, instead of taking commissions based on individual trades. This means that if customers want to trade in their retirement accounts they have to upgrade in a fee-based account. If not, they have to find another brokerage that offers commission-based trading, like what many Merrill rivals did.
Today, their customers can now have greater choices and flexibility in their IRA accounts. Meanwhile, Bank of America continues implementing their Best Interest Standard and give investment advice to customers across all accounts.
Customers who want to access the Investment Advisory Program to guide and walk them through their investments account may still avail of the services. However, they would still need to pay charged fees equivalent to a percentage of customers’ assets.
How to Boost Your IRA Accounts?
If you’re looking for ways to boost your IRA accounts, the financial experts recommend you apply these tips.
Maximize Your Tax Deduction.
Did you know you can postpone paying your income tax up to $5,500? Your tax deduction usually depends on your income tax rate and dollar denomination value. It usually ranges from $825 for employees with 15% income tax rate and up to $1,925 for high-income earners. Instead of paying your income tax, have it invested in your IRA account instead. You’ll only get taxed if you withdraw the income tax from your account.
Up Your Contributions
As you grow older and advance in your career, your salary and benefits also increase. This gives you an opportunity to save more compared to your younger counterparts. Take advantage of this increased cash flow to increase your IRA contribution up to $1,000.
Make Sure to Pay On Time.
Most IRA contributions are due in mid-April the same as your tax filing deadline. While preparing for your tax return, you can plug your IRA contribution in to determine how much tax you can reduce or save to boost your refund. If you want to file your contributions in advance though, let’s say in January, you will need to specify whether you want the tax reduction or refund to be applied in the previous tax year or the current calendar year.
Contribute In Your Spouse’s Name.
The advantage in married couples is that they can double their tax deduction if they max out their IRA account in each spouse’s name. If only one spouse is working, the working partner can contribute to an account of the non-working spouse’s name. You can contribute as much as $11,000 under the age of 50, $12,000 if one’s spouse is older than 50 and $13,000 for both spouses aged older than 50.
Claim Your Saver’s Credit
Both low and moderate-income workers are eligible for saver’s tax credit which is separate from the tax deduction they have for their IRA contribution. This enables them to save more money for their retirement funds. If your annual gross income falls under $31,000 as an individual or around $62,000 for couples, you can claim a tax credit worth up to $2,000 for singles and $4,000 for couples, depending on your tax credit worth. Usually, tax credit worth comprises about 10-15% of your IRA contribution.
More in Retirement
Tesla Stocks Drops to Its Worst Performance in Two Years After Elon Musk’s NYT Interview
Tesla’s shares drop to an astounding $1 billion in a day after the New York Times published an interview with CEO...August 21, 2018
You Should Know This One Hard Truth Before Becoming a Home Flipper!
Sidney Torres is known for being a self-made millionaire. He earned his money by renovating houses in New Orleans. Now that...August 21, 2018
Experts Reveal The Best Way to Build Your Retirement Fund
Everyone wants to have a comfortable retirement. We look forward to the day we finally stop working and start living our...August 20, 2018
Before You Start Searching For Love You Need To Read This 7-Year-Old Boy’s Love Story
Sometimes in life, when you least expect it, that’s when love hits you. Just like this love story about two people...August 20, 2018
Harley-Davidson Employees Enraged with Layoffs After Tax Cut
The iconic Harley-Davidson surprised thousands of its employees when they announced the layoffs, despite the company expecting huge privileges from the...August 10, 2018
How to Ramp Your Business On Social Media Marketing in Summertime
With summer in full swing, now is the time to ramp up social media campaigns and get in front of the...August 7, 2018
6 Ways You can Save for Retirement in Your 30’s
If you are in your 30’s or something, then you should have already started saving for your retirement. If you haven’t...August 5, 2018
6th Anniversary of FB IPO Shows Massive Rise in Prices
Last Friday was the most anticipated day for Facebook investors. Why? Because it’s the company’s sixth anniversary of its initial public...August 5, 2018
7 Best Loans for People With Poor Credit
It just so happens that people who need the loans and credit the most are ones who have to face the...August 4, 2018