Word: taxingly
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Dates: during 1990-1999
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...loyalists lined up some $700,000 in contracts for Hubbell in 1994, just after he resigned from the Justice Department and before he was indicted, the payments amounted to hush money. That investigation has also led nowhere, but Starr appears ready to go after Hubbell again, this time on tax charges relating to some of the $700,000. The first time Starr nabbed Hubbell, he hoped that Clinton's crony could lead him up the ladder. Now he knows that won't work. When it comes to Starr's case against the Clintons, very little ever does...
Roth acknowledges that his popularity has been boosted by his IRA legislation, which lets you sock away $2,000 a year in after-tax money that then grows tax-free. "As I walk around Wilmington," he told me, "people yell from their cars, young and old, all backgrounds, 'Hey, Bill, love your IRA!'" But what's good for Roth and for Everyman isn't necessarily good for you. The Roth, as it's known, could stand improvement. For starters, there are ridiculous income limits. Couples earning more than $160,000 a year are ineligible, and if they earn...
Nevertheless, the overwhelming majority of Americans qualify--with no shenanigans. And for many, the Roth is a great deal. You pay no tax upon withdrawal. The old-style IRA, which allows you to put away before-tax money and pay tax upon withdrawal, remains useful. But restrictions cut most people out. Still, there's $1.3 trillion sitting in the things, thanks to years of 401(k) rollovers and initially generous IRA terms. Much of that should and will convert to new Roth accounts, and that is plainly what's behind the current Roth marketing blitz...
...fall for it blindly. When you convert, you must pay tax on the whole bundle. Converting makes sense if you have non-IRA funds to pay the tax and will stay in the same tax bracket or move to a higher one. It helps if you invest in stocks and have 10 years before you'll need the money. If that's you, convert this year while the taxman is running a Roth special: you get to spread the tax liability over four years. But if you're near retirement and lean toward bonds or CDs, converting...
Another unspoken liability is the possibility that later on a tax will be levied on a Roth's earnings. It's hardly unthinkable, though Senator Roth maintains it'll never happen because of the "political hailstorm" that would ensue. But Social Security benefits weren't taxed before the 1980s. Real estate deductions were greatly curbed in 1986. In 20 years, predicts Robert Walsh, a tax professor at Marist College, if Social Security is bankrupt, "the politicians will see this huge pot of money called the Roth, and they won't be able to leave it alone." The Roth...