Comments on: Facing My Financial Fears: Roth IRAs http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/ Simple, applicable personal finance advice for the modern world Sat, 21 Nov 2009 19:22:21 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Wendy http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-397893 Wendy Mon, 20 Oct 2008 13:39:10 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-397893 You can take out any contributions you put into the Roth IRA at anytime, as long as you don't touch the interest it has earned. You can take out any contributions you put into the Roth IRA at anytime, as long as you don’t touch the interest it has earned.

]]> By: boardmadd http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-192284 boardmadd Tue, 26 Feb 2008 15:04:20 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-192284 Note for the above comments, you still hav eto wait until retirement age to take distributions from a ROTH IRA without incurring penalties, but once you reach that age, you can take distributions as you need them, and they will be tax free distributions. Note for the above comments, you still hav eto wait until retirement age to take distributions from a ROTH IRA without incurring penalties, but once you reach that age, you can take distributions as you need them, and they will be tax free distributions.

]]> By: boardmadd http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-192280 boardmadd Tue, 26 Feb 2008 15:02:01 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-192280 The ROTH IRA $4,000 limit for 2007 is exactly that, it's a federal mandated limit. The good news is that the limit is being raised this year, so that you can contribute up to $5000 if you are 49 and under, and $6000 if you are 50 and over. After 2008, contribution limits are set to raise $500 based on inflation (not sure if that's an annual increase or just put in place if and when inflation calls for it). You can only contribute the federal limit to a ROTH IRA per individual in any given fiscal year (April 16th 2008 - April 15th, 2009 is the "fiscal year" of 2008 as far as the government is concerned). The good news is that, if you are married, you can contribute to the maximum for both people. The ROTH IRA is, when you get right down to it, the best deal for saving for retirement there is. 401(K)'s, other retirement plans, and Traditional IRA's are "tax deferred", so while you are getting the benefit of not claiming that money as taxable *today*, you *will* pay the taxes for it later when you start to withdraw it. With a ROTH IRA, you do not get any up-front tax benefit from it, you can only fund ROTH's with post tax dollars. The beauty of it is that any and all growth in the ROTH IRA is earned TAX FREE. That means that all of the money that goes in is allowed to compound and you are allowed to take distributions at retirement (when you choose to, there's no mandated distribution times) with no taxes :). The ROTH IRA $4,000 limit for 2007 is exactly that, it’s a federal mandated limit. The good news is that the limit is being raised this year, so that you can contribute up to $5000 if you are 49 and under, and $6000 if you are 50 and over. After 2008, contribution limits are set to raise $500 based on inflation (not sure if that’s an annual increase or just put in place if and when inflation calls for it).

You can only contribute the federal limit to a ROTH IRA per individual in any given fiscal year (April 16th 2008 – April 15th, 2009 is the “fiscal year” of 2008 as far as the government is concerned). The good news is that, if you are married, you can contribute to the maximum for both people.

The ROTH IRA is, when you get right down to it, the best deal for saving for retirement there is. 401(K)’s, other retirement plans, and Traditional IRA’s are “tax deferred”, so while you are getting the benefit of not claiming that money as taxable *today*, you *will* pay the taxes for it later when you start to withdraw it.

With a ROTH IRA, you do not get any up-front tax benefit from it, you can only fund ROTH’s with post tax dollars. The beauty of it is that any and all growth in the ROTH IRA is earned TAX FREE. That means that all of the money that goes in is allowed to compound and you are allowed to take distributions at retirement (when you choose to, there’s no mandated distribution times) with no taxes :).

]]> By: Lisa http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-93638 Lisa Thu, 25 Oct 2007 05:42:03 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-93638 Trying to understand Roth IRAs. What is w/ the magic $4000 amount? I had a DAve Ramsey financial planner tell me to do it, but it was unclear whether I should do through his office & he hasn't responded to my "ready to go" email. Any thoughts? Lisa Trying to understand Roth IRAs. What is w/ the magic $4000 amount? I had a DAve Ramsey financial planner tell me to do it, but it was unclear whether I should do through his office & he hasn’t responded to my “ready to go” email. Any thoughts?

Lisa

]]> By: Super Saver http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-288 Super Saver Fri, 24 Nov 2006 05:21:38 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-288 A Roth IRA is a great deal because future tax break of no income tax. I believe it also has special withdrawal options, without penalty, for events like the purchase of a new house or higher education. A Roth IRA is a great deal because future tax break of no income tax. I believe it also has special withdrawal options, without penalty, for events like the purchase of a new house or higher education.

]]> By: Amy http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-275 Amy Wed, 22 Nov 2006 15:45:08 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-275 You can put money into a 2006 IRA until tax day 2007. So, if you wanted to put more than $4000 into a Roth over the next 12 months..... Just a thought. You can put money into a 2006 IRA until tax day 2007. So, if you wanted to put more than $4000 into a Roth over the next 12 months…..

Just a thought.

]]> By: moneysmartlife http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-270 moneysmartlife Wed, 22 Nov 2006 07:33:36 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-270 I think Vanguard is a great place have an IRA. The problem is they have raised their minimums so it is harder for someone just getting started to invest with them. I think I read somewhere that Scottrade has pretty low minimums. I think Vanguard is a great place have an IRA. The problem is they have raised their minimums so it is harder for someone just getting started to invest with them. I think I read somewhere that Scottrade has pretty low minimums.

]]> By: Savvy Steward http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/comment-page-1/#comment-268 Savvy Steward Tue, 21 Nov 2006 21:38:29 +0000 http://www.thesimpledollar.com/2006/11/21/facing-my-financial-fears-roth-iras/#comment-268 Dunno if you already decided where you will open your Roth IRA, but I recently opened one with T. Rowe Price and I am very satisfied. To open a new account, they only require a $50 monthly automatic investment. Dunno if you already decided where you will open your Roth IRA, but I recently opened one with T. Rowe Price and I am very satisfied. To open a new account, they only require a $50 monthly automatic investment.

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