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Financial DecoderAuthor: Charles Schwab
Cognitive and emotional biases can have a big impact on your financial life. Each episode of Financial Decoder looks closely at one financial decision--and the biases that might cloud your judgment and cost you money. Host Mark Riepe, head of the Schwab Center for Financial Research, decodes the behavioral and psychological factors at play and shares strategies designed to improve the way you approach financial crossroads. Other experts join Mark to provide their unique perspective on behavioral economics, portfolio management, retirement planning, personal finance and more. Podcasts are for informational purposes only. This channel is not monitored by Charles Schwab. Please visit schwab.com/contactus for contact options. Language: en Genres: Business, Education, Investing Contact email: Get it Feed URL: Get it iTunes ID: Get it |
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How Do IRAs Actually Work?
Episode 5
Monday, 3 August, 2026
Individual retirement accounts (IRAs) are one of the most widely used retirement savings vehicles, yet many investors are unsure how they work. Mark Riepe breaks down IRA basics, including traditional IRAs, Roth IRAs, contribution limits, tax advantages, withdrawal rules, and eligibility requirements. He also explains key differences between IRA types and offers a framework for evaluating which option may fit your retirement-planning goals. Whether you're opening your first IRA or comparing retirement account options, this episode provides a practical guide to understanding the fundamentals. After you listen: Read the article "What Is an IRA? Traditional, Roth, and Other Types of IRAs." Learn more about IRAs and what to consider for your retirement planning. Financial Decoder is an original podcast from Charles Schwab. If you enjoy the show, please leave us a rating or review on Apple Podcasts. Reach out to Mark on X @MarkRiepe with your thoughts on the show. Follow Financial Decoder on Spotify to comment on episodes. Important Disclosures This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned are not suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions. All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Roth IRA conversions require a 5-year holding period before earnings can be withdrawn tax free and subsequent conversions will require their own 5-year holding period. In addition, earnings distributions prior to age 59 1/2 are subject to an early withdrawal penalty. Withdrawals and distributions of taxable amounts are subject to ordinary income tax and, if made prior to age 59½, may be subject to an additional 10% federal income tax penalty, sometimes referred to as an additional income tax. You generally have to start taking required minimum distributions (RMDs) no later than April 1st of the year following the calendar year you reach age 73 or retire, whichever is later. If you were born on or before June 30, 1949, the required minimum distribution age is 70½. If you were born after June 30, 1949 and before January 1, 1951, the required minimum distribution age is 72. If you own 5% or more of the business sponsoring the Plan, other provisions may apply. Refer to your Plan document for details. However, you are not required to take a minimum distribution from your Roth accounts during your lifetime. A rollover of retirement plan assets to an IRA is not your only option. Carefully consider all of your available options, which may include but not be limited to keeping your assets in your former employer's plan; rolling over assets to a new employer's plan; or taking a cash distribution (taxes and possible withdrawal penalties may apply). Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment-related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, and other concerns specific to your individual circumstances. Investing involves risk, including loss of principal. Past performance is no guarantee of future results. The Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc. 0826-RTYC Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
