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The way it is right now, your regular IRA and 401K monies are all growing in tax deferred accounts.

But when its time to take the money out you will be taxed at your future tax bracket on every cent of that distribution; distributions from a traditional IRA are treated as ordinary income.

That’s a bitter sweet pill to swallow after making IRA contributions and doing the right thing for so many years.

Continue Reading “Future tax rates are where?”

I’m sorry if I kept you on the hook from the last post… I was only trying to be dramatic in order to make a point.

There isn’t a magic account that few know about… that’s rarely the case in finance. There aren’t many new things, in fact, just the same time tested ideas packaged differently.

BUT… An exception to that statement is the Roth IRA; letting Americans take their IRA monies out TAX FREE was a wonderful NEW idea.

Continue Reading “Fuggetta ‘Bout It - A Winning Investment Psychology”

I’ve dedicated a lot of time to the Roth IRA and referenced the traditional (or regular IRA) many times… its about time I took a closer look at the traditional IRA. Individual Retirement Accounts are primarily self directed savings and investment accounts, as opposed to employee benefit plans.

IRA contributions

Anyone who has earned income and has not reached age 70 1/2 may make contributions to an IRA. If a husband and wife both have earned income of $4,000 or more, both can contribute up to $4,000 to an IRA. If one spouse is working and the other is not, as long as the total earned income is above $8,000, the working spouse may contribute up to $4,000 on behalf of the non working spouse.

Continue Reading “Tenets of a Traditional IRA”

Currently, if your AGI is less than $100,000 annually you are eligible to convert your regular IRA to a Roth IRA.

Unfortunately, for a married couple with dual incomes, making 105K, you can’t convert to a Roth IRA because you make too much money. You’re barely crossing the eligibility threshold and it just doesn’t seem fair. That’s an especially hard pill to swallow.

As I’ve written before that’s all changing in 2010 when the 100K AGI restriction is lifted. Gone. Goodbye. In the meantime, there are still a couple things you can do now to get ready…

Continue Reading “The Secret to Funding a Roth IRA, regardless of your income!”

I am a huge advocate of the Roth IRA… I believe if you can afford to convert an existing IRA to a Roth then you should have done it yesterday.

A bit of a refresher here, monies in both accounts grows tax deferred and when its time to take it out:

• the traditional IRA is fully taxed
• the Roth IRA monies are 100% TAX FREE

Some taxpayers are currently not eligible to convert a traditional IRA to a Roth IRA but those rules are changing in the very near future.

Lets take a closer look…

Continue Reading “Interested in the Equivalent of a Tax Free Loan in 2010?”

Before I write many of these posts I do alot of reading in advance. I do this to bring myself up to speed on the topic at hand or to brainstorm new ideas or to find useful tidbits that I hope are interesting and relevant, etc.

These days, like most everyone else, I use the internet when I want information.

When it comes to financial planning, retirement planning, IRA’s (both Roth and Traditional) there’s quite a bit of good information on the web… but it takes a while to find exactly what you’re looking for, its like going on a virtual scavenger hunt.

Continue Reading “What I’m seeing out there”

The major advantage of the Roth IRA is qualified distributions are TAX FREE. Investment earnings are not just tax deferred, as with a traditional IRA, but are tax free. I’m going to repeat that… TAX FREE!

That’s what makes financial planning and retirement planning so dang important for those of you in your 30’s and 40’s. I mean right now you’ve got to be thinking about getting with this program if you haven’t done so already. In my opinion, this will be the single most important move you make towards securing your financial future.

Continue Reading “Qualified Distributions From a Roth IRA Are 100% Tax Free”

The title for this post was inspired by the ‘computer for every child’ program. This fantastic program aims to give every child in the world access to the internet.

Nicholas Negroponte is the co-founder of MIT’s Media Lab and is working on a way to mass produce laptops for $100 a piece.

The goal is to sell them to developing countries on the cheap and give the world’s poorest children access to something we all get to use everyday. Here’s a link to read more about it.

Continue Reading “A Roth IRA for every American!”