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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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Tax Help: Use Roth IRA in Estate Planning
Tax Tip: Using the Roth IRA for Creative Estate Tax Planning
Parents must give serious consideration to protecting their family through creative estate tax planning. While life insurance and trusts should be a part of every tax plan, Roth IRAs can be an elegant tool you can use to pass some of your wealth to your children on a tax-free basis.
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First, let's take a quick look at the Roth IRA. A Roth IRA is an after-tax retirement device that produces huge tax savings because all tax distributions are tax-free. The initial disadvantage of a Roth IRA is the fact that contributions are not tax deductible as with traditional IRAs or 401(k)s. The advantage of a Roth IRA, however, is that all distributions are tax-free once the person reaches the age of 59˝. So how can you work with a Roth IRA to pass assets to your child?
One of the biggest keys to retirement planning is time. The extra years the individual spends saving and compounding earnings for retirement, the bigger the nest egg they should have when the retirement day arrives. Looking back, suppose you had this amount of time to start investing for retirement when you were 16.
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The bedrock goal of estate planning is to pass as much of your estate as possible to your family on a tax-free basis. Parents can transfer relatively small amounts of funds to your children now that if handled advantageously can turn in a secure future for tomorrow.
For example, if parents have a 16 year-old child with a Roth IRA, you and the child can contribute $4,000 in 2007 if they earn at least $4000. That $4,000 is going to grow tax-free for 43 years and could be worth over $240,000 with a 10% compounded return. And the withdrawal after age 59 1/2 will be tax free.
There are other applicable advantages to opening a Roth IRA for your child. As a parent, it is basic that you teach your child the value of assets and the importance of foregoing immediate amusement or "stuff" for future gain. Opening a Roth IRA gives you another opportunity to sit down and teach your child the value of saving and investing. Of course, if you are walking the walk with you own Roth IRA ,401k and other retirement planning your advise should get a good reception. One parent made the same agreement with each of three children. If they got a part time job they had to put 10% of their gross income in their Roth IRA. The parents would then put in $3 for every $1 the child contributed to their Roth IRA. For example, if the child earned $2500 they put $250 in their IRA and the parents put in $750 for a total of $1000. Before you rush out to open a Roth IRA for your child, you must determine if your child is eligible to open a Roth IRA. To open a Roth IRA, your son or daughter must be working at least part-time for an employer that reports their wages to the IRS. Hiring your child to cut the lawn each week is not going to cut it, nor will this strategy work for your 5 year-old. Unless of course, they are working as a child model. Quite a few teenagers, however, have summer and part-time jobs that should be satisfactory for IRS rules. To avoid any trouble, you should always consult with your tax advisor. A further problem concerns the maturity level of your child. Keep in mind that the Roth IRA will be opened in their name. Your son or daughter will have the legal right to do what they will with the outline. It is strongly suggested that parents clearly explain the result of taking funds out of the rundown, but the choice ultimately lies with them. As difficult as it is, try to be objective in evaluating how you child will react to knowing the funds is sitting in an account. If you have concerns you should probably investigate other tax investing strategies. Opening and continuing a Roth IRA for your children can be a very positive means of transferring funds to them and teaching them important life lessons. If your child exercises restraint, and stick-to-itiveness your relatively small contribution to their Roth IRA, along with their later contributions, can grow into a life changing tax-free sum of money
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Index of Articles about Roth IRA
What Other Authors say about Roth IRA
So you've never heard of a Roth Ira
by Elizabeth Gough
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... What Roth Hath, Traditional Hath Not The Taxpayer Relief Act of 1997 introduced a new Individual Retirement Account (IRA) called the Roth IRA. The primary inducement to make contributions to the new Roth... 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... The ROTH IRA is a retirement product which allows the withdrawal of tax free income from a tax deferred account, and it is a fantastic savings vehicle for people of any age, but particularly for younger... 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... 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... 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,... This retirement account is so new and unique that you may not have heard of it. For additional reasons, I describe in my home study course, corporate insiders may not want to offer it to corporate employees.... 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... 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... 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 IRA is a smart investment choice for retirement.Why? Because not only does your money grow tax free while you're investing in one of these accounts... but... the flexibility of the Roth IRA allows... 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... |
