Word: iras
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...understandably wary. But optimism is suddenly once again the order of the day now that the Ulster Unionist Party has voted to allow its enemy, Sinn Fein, into the region's nascent government without first making a least a token effort to disarm its military wing, the IRA. The condition, which has already rubbed Sinn Fein members the wrong way, is that the IRA will have to begin disarming by January 31. "We've jumped," Unionist leader David Trimble said in a statement aimed at Sinn Fein leader Gerry Adams. "You follow...
Created two years ago, the Roth IRA eliminates many of the headaches in dealing with retirement savings in your retirement years. There are no mandatory distributions, and because the Roth is funded with after-tax dollars, there is no tax upon withdrawal. It's all yours--even the part that grew tax-free. Not everyone qualifies for a Roth. You must have an annual household income under $100,000 to convert an old IRA to a Roth, and under $160,000 ($110,000 for singles) to start one with new money...
...converted an old IRA into a Roth in 1998, you have until Dec. 31 to undo it. The deadline was recently extended to allow those who converted without knowing whether they qualified for the Roth the opportunity to correct their error. Many rushed to convert in 1998 because of a one-time grant to spread the resulting tax over four years. The effect, though, was to extend the period in which you can unconvert and then reconvert to the Roth. You'd want to do that if your IRA's value is much lower now than when you originally converted...
...have until April 15, or the date you file your return, to open a tax-advantaged IRA, assuming you qualify. But it's increasingly likely that you'll qualify for a Keogh, which must be established by year-end. A Keogh is a tax-deferred savings vehicle, like a 401(k), for the self-employed. If you have left your job and now derive income from consulting or serving as a board member, for example, you are eligible to open a Keogh by contributing, on a pretax basis, 25% of your earnings up to $30,000. Once the account...
...grow tax-deferred. You might be better served putting new savings into a tax-efficient mutual fund, like an index fund. When you cash that in after one year, you pay the capital-gains rate on your earnings, typically lower than the income-tax rate you pay on IRA withdrawals...