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by Suze Orman
This book is a "must read" for everyone, whether you are young or old; have credit card debt or not; own a house or have recently had to let one go; have sizeable savings, 401k's, investments and such or little or none; have a secure job or are now unemployed, and so on.....the reality is that you HAVE TO HAVE A PLAN. This book is going to give you one. If you sit back and try and wait this financial storm out without a rock solid plan or continue to procrastinate even a little longer about making important financial decisions, your financial security is at risk.
If it is hard for you to say NO to yourself or your children, you can make Suze the "bad cop." This is a helpful reference book that will help you assess your current state, and move forward with a plan instead of fear or ignorance.
Either way, only a small number of people seem to change their behavior, unless it becomes absolutely necessary. In 2009, changing behavior is a necessity, as many people don't have don't have a choice now, and won't in the immediate future. For the long-term, we'll have to wait and see.
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Roth IRA -
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Roth 401k Only Available to a Few
Only about one in three employers are expected to start Roth 401(k) plans in 2006. But, those who are self-employed, independent contractors, or business owners with no employees, don’t have to wait. They can establish a Solo 401k with the Roth feature and take advantage of that opportunity now. Washington DC - New tax rules that went into effect in January 2006, allow a Roth feature to be added to 401(k) plans.
But millions of Americans will not have access to a Roth 401(k) because, according to a Hewitt Associates survey, only about one in three employers are expected to start Roth 401(k) plans in 2006. Still, those who are self-employed, independent contractors, or business owners with no employees, can establish a Solo 401k with the Roth feature and take advantage of the Roth 401(k) opportunity now, says Daniel Lamaute, retirement plan specialist at Lamaute Capital, Inc. (InvestSafe.com). With a 401(k) plan, participants reduce their taxes when part of their wages goes to their 401(k) account. The contributions and earnings from the account are not taxed as long as the funds remain in the 401(k). However, the money is taxed at the time of withdrawal. Withdrawals are required to begin at age 70 ˝ under the Required Minimum Distribution rules. By contrast, contributions to a Roth 401(k) are made with after-tax dollars.
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But no taxes are paid at the time of withdrawal on the funds (principal and earnings) in a Roth 401(k) account, provided certain requirements are met. So if taxes are higher in the future at least the money that’s in a Roth 401(k) account will not get hit. A Roth account also gives more control over the timing of distributions because one can transfer Roth 401(k) funds to a Roth IRA and avoid the Required Minimum Distributions that would normally kick in at age 70 ˝. The major differences between a Roth IRA and Roth 401(k) are that 1) with a Roth 401(k) one can contribute up to 4 times more as much as in a Roth IRA - $20,000 in year 2006 for the Roth 401(k) vs. just $5,000 for the Roth IRA, and 2) high income individuals can contribute to the Roth 401(k) but are prohibited to contribute to a Roth IRA. Individuals with income from their own business (part-time or full time), and independent contractor with 1099 income, should create their Solo-Roth 401(k) as soon as possible. That’s because the opportunity to set up a Roth 401(k) plan expires in 5 years. Unless Congress changes the laws, no new Roth contributions can be made after 2010.
But funds that are already in a Roth account can continue to grow tax-free. The 401(k) with a Roth feature is a valuable tool for employees and small business owners. It allows them to tailor their investments to meet their individual retirement objectives. Individuals with their own business should ask their tax professional about this plan and how it may benefit them. Anyone can visit www.investsafe.com to request a free information kit on the Solo 401(k) that includes both a Roth feature and a loan feature.
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Index of Articles about Roth IRA
What Other Authors say about Roth IRA
Roth 401(k) .. A Wolf in Sheep's Clothing
by Lawrence Groves
Starting on January 1, 2006, 401(k) plan sponsors may offer a Roth 401(k) option. Those employers who want to offer this new Roth 401(k) will need to revise their current 401(k) program Roth 401 (k) Overview:*... In other words, a Roth IRA is a nice little way of saving for the future when you finally put your feet up and stop working after putting a few good long decades of hard slog. That's the IRA bit of Roth... Information about Roth IRA is important if you have one of these accounts and need to know how it operates. A Roth IRA in an individual retirement account or arrangement that is similar to a traditional... Great retirement benefits and bonuses used to come standard with just about any job, but these days even the most loyal of workers are seeing their retirement packages pulled out from under them. At least... If you don't know what a Roth IRA is then stop everything, print this article and read it carefully as this will certainly be the most valuable information you read this year. This next retirement account... Q: I am trying to decide if opening and contributing to a Roth IRA would be a better option than contributing over and above what my company matches in my 401K.A: Ideally, it's best to max out both your... The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits,... Roth 401k is a good retirement savings option. Although it does not provide an up-front tax-deduction, the account eventually becomes tax-free, because the withdrawals taken at retirement are not subject... Converting IRA to Roth IRA is a financial decision that requires a careful assessment of your financial state and tax implications of the move. If you hold an existing Individual Retirement Account or... Tax Tip: Using the Roth IRA for Creative Estate Tax PlanningParents must give serious consideration to protecting their family through creative estate tax planning. While life insurance and trusts should... Well I think this is one of the best retirement savings options allowed by the tax department. It is especially beneficial to middle income Americans, specifically those earning less than $95,000 per year.This... The need to plan for post retirement life is being widely recognized these days all over the world. A number of plans and accounts are available from banks and financial institutions, both public and private... Should I Convert to a Roth IRA? This is a perplexing question many investors are asking themselves in the wake of all the new tax laws. If the opportunity is available, should an individual take a distribution... January 1, 2006, a new opportunity for savings came to town. Known as the post tax ROTH 401k - this is the classier sister to the traditional 401k plan. On one side is the post tax Roth 401k, with a fuller... 2006 is a little more than half way over but we have already seen some major changes in the IRA rules. This article will summarize two of these changes and what they mean to you.Income Limit for Roth IRA... |
