Tell me about IRAs

[Gatorubet]

Here's my advice...

"You don't need a Roth IRA so much as the social
security numbers of people who do have them."

 

[shetuck]

My Roth IRA was way under performing, so I pulled it. And re-invested.
Just because it sounds like a good investment doesn't mean it will out perform other investments.
You may be better off investing in I-Shares or the like. Buyer be ware!
But, most people aren't as anal as I about investments.
Always read the paper work your sent!
Talk to your financial guy regularly.
It's your responsibility in the end to keep track of investments!

you can invest your roth contribution any way you like (notes, bonds, equities, mutual and/or ET funds, etc.) and you can make changes in those elections as often as you'd like. so you can't "pull it" per se - i.e. it doesn't lose its roth status unless you decide to take a distribution. the benefit of the roth is that however way it's invested, it grows tax free unless you retire. what that means is that you don't have to pay income/capitals gains tax on it.

 

[Buckeye Buh Nim]

My Roth IRA was way under performing, so I pulled it. And re-invested.
Just because it sounds like a good investment doesn't mean it will out perform other investments.
You may be better off investing in I-Shares or the like. Buyer be ware!
But, most people aren't as anal as I about investments.
Always read the paper work your sent!
Talk to your financial guy regularly.
It's your responsibility in the end to keep track of investments!

Why does it matter what the investment vehicle is? You should have access to more investment choices in an IRA, Roth, or SEP than in any 401K because the non 401K plans are completely yours, whereas the 401K plans are managed by your employer and the employer chooses how you can invest.

Your last statement is the key. IMO, your investments should be reviewed quarterly on average.

 

[Buckeye Buh Nim]

First thing, Jenkins is you need to sit down with an attorney/cpa and explore the option of forming an LLC--preferably a non-resident Nevada company. Have all of these outside payments made to jenkinswoody, ltd as say consulting payments rather than you personally. Then, take what you need out of the LLC as a salary, leaving the rest in. The tax benefits will be enormous.

I know that wasn't the main question, and you may be doing this already. Just in case, I'd thought I'd throw it out there.

I agree very much with this advice. As a matter of fact, it is what I do (except for the LLC being a non resident Nevada company)with some side income that I have. The key is that you have to "pay" yourself a reasonable salary. The biggest complication with this strategy is that you have more filings to do. You have to issue yourself a W-2 and file a W-3 with the gov. You have to file a 1120S tax return before your tax return, and have to give yourself a K-1 to include with your taxes. Depending on the amount involved, you will have to file quartelry payroll taxes.

This is why it is good to work with a competent CPA on this strategy.

 

[Fungo Squiggly]

I max out my Roth every year.

Although if you make over $75,000 or $80,000 a year, I believe you can't contribute to it.

For filing single, the contribution phaseout range for 2007 if from $99k to $114k of AGI.
For joint or widow, the phaseout is from $156k to $166k.

Filing seperately, it ranges from $0-$10k. Sucks for them.

 

[BuckBackHome]

This is why it is good to work with a competent CPA on this strategy.

And financial advisor.