Financial Planning

JennifersHope · Mar 22, 2007

Hi,

I am reading a great book about finances, how to invest money, get the best mortgage, advice on buying or leasing a car etc... and here is the catch....planning for the future..

I am to the point now where I have the 20 percent down to buy a house, *not in my current state, but in the state where I plan on moving to, and I am looking to go a little further and start investing money and planning for the future...

The book is great and gives great advice on IRA's, 401K's etc and my new favorite Roth IRAs....

If you are like me, then you are wondering, is it really worth saving for my retirement when right now 401ks can't be touched without penality till you are 59 and 1/2 years old and the same with IRAs... I mean not to sound negative, but 59 is like a 107 years old in CF years.... so it was a little discouraging for me..

I have been reading about the Roth IRA's, and apparently they might not be such a bad option for CFers'.. It is money that you have to invest in that you ALREADY paid tax on and it accures decent interest over the years... Here is the thing.. you can get the money anytime you need it without penality or fee and of course you already paid taxes on it.. so say in 10 years from now, which is more likely to be the story with me when I will need to retire, I Can cash in my ROth IRA without a fee,

Anyone have any experience with this type of IRA?? I am really looking to open up an account in the next few weeks.but wanted to know what you guys thought.. and maybe what else you are doing for planning for the "CF future"

JennifersHope · Mar 22, 2007

Hi,

I am reading a great book about finances, how to invest money, get the best mortgage, advice on buying or leasing a car etc... and here is the catch....planning for the future..

I am to the point now where I have the 20 percent down to buy a house, *not in my current state, but in the state where I plan on moving to, and I am looking to go a little further and start investing money and planning for the future...

The book is great and gives great advice on IRA's, 401K's etc and my new favorite Roth IRAs....

If you are like me, then you are wondering, is it really worth saving for my retirement when right now 401ks can't be touched without penality till you are 59 and 1/2 years old and the same with IRAs... I mean not to sound negative, but 59 is like a 107 years old in CF years.... so it was a little discouraging for me..

I have been reading about the Roth IRA's, and apparently they might not be such a bad option for CFers'.. It is money that you have to invest in that you ALREADY paid tax on and it accures decent interest over the years... Here is the thing.. you can get the money anytime you need it without penality or fee and of course you already paid taxes on it.. so say in 10 years from now, which is more likely to be the story with me when I will need to retire, I Can cash in my ROth IRA without a fee,

Anyone have any experience with this type of IRA?? I am really looking to open up an account in the next few weeks.but wanted to know what you guys thought.. and maybe what else you are doing for planning for the "CF future"

JennifersHope · Mar 22, 2007

Hi,

I am reading a great book about finances, how to invest money, get the best mortgage, advice on buying or leasing a car etc... and here is the catch....planning for the future..

I am to the point now where I have the 20 percent down to buy a house, *not in my current state, but in the state where I plan on moving to, and I am looking to go a little further and start investing money and planning for the future...

The book is great and gives great advice on IRA's, 401K's etc and my new favorite Roth IRAs....

If you are like me, then you are wondering, is it really worth saving for my retirement when right now 401ks can't be touched without penality till you are 59 and 1/2 years old and the same with IRAs... I mean not to sound negative, but 59 is like a 107 years old in CF years.... so it was a little discouraging for me..

I have been reading about the Roth IRA's, and apparently they might not be such a bad option for CFers'.. It is money that you have to invest in that you ALREADY paid tax on and it accures decent interest over the years... Here is the thing.. you can get the money anytime you need it without penality or fee and of course you already paid taxes on it.. so say in 10 years from now, which is more likely to be the story with me when I will need to retire, I Can cash in my ROth IRA without a fee,

Anyone have any experience with this type of IRA?? I am really looking to open up an account in the next few weeks.but wanted to know what you guys thought.. and maybe what else you are doing for planning for the "CF future"

NoExcuses · Mar 22, 2007

I remember posting this same question about 6 months ago on this sight.....

And that reasons you give are why I invest in a ROTH IRA on top of my company's 401 (k). My 401 (k) has amazing company matching so I can't pass up the free money... even if I withdraw early and/or die early.

A Roth we can take money out anytime from the principal, so that makes sense as well.

Other than that, I plan as if I'm gonig to be around for a while. If anything, it will go to my parents when I die and gosh knows they've spent a ton of money on my health when i was younger so they can use it for themselves.

NoExcuses · Mar 22, 2007

I remember posting this same question about 6 months ago on this sight.....

And that reasons you give are why I invest in a ROTH IRA on top of my company's 401 (k). My 401 (k) has amazing company matching so I can't pass up the free money... even if I withdraw early and/or die early.

A Roth we can take money out anytime from the principal, so that makes sense as well.

Other than that, I plan as if I'm gonig to be around for a while. If anything, it will go to my parents when I die and gosh knows they've spent a ton of money on my health when i was younger so they can use it for themselves.

NoExcuses · Mar 22, 2007

I remember posting this same question about 6 months ago on this sight.....

And that reasons you give are why I invest in a ROTH IRA on top of my company's 401 (k). My 401 (k) has amazing company matching so I can't pass up the free money... even if I withdraw early and/or die early.

A Roth we can take money out anytime from the principal, so that makes sense as well.

Other than that, I plan as if I'm gonig to be around for a while. If anything, it will go to my parents when I die and gosh knows they've spent a ton of money on my health when i was younger so they can use it for themselves.

NoExcuses · Mar 22, 2007

Thanks for the link. Are you talking about the traditional IRA?

NoExcuses · Mar 22, 2007

Thanks for the link. Are you talking about the traditional IRA?

NoExcuses · Mar 22, 2007

Thanks for the link. Are you talking about the traditional IRA?

NoExcuses · Mar 22, 2007

Gibbo that is a fantastic link....thank you!

Jen, check this out from the link for Traditional IRA's:

Medical insurance. Even if you are under age 59½, you may not have to pay the 10% additional tax on distributions during the year that are not more than the amount you paid during the year for medical insurance for yourself, your spouse, and your dependents. You will not have to pay the tax on these amounts if all of the following conditions apply.
You lost your job.

You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.

You receive the distributions during either the year you received the unemployment compensation or the following year.

You receive the distributions no later than 60 days after you have been reemployed.

Disabled. If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.
You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration.

Unreimbursed medical expenses. Even if you are under age 59½, you do not have to pay the 10% additional tax on distributions that are not more than:
The amount you paid for unreimbursed medical expenses during the year of the distribution, minus

7.5% of your adjusted gross income (defined later) for the year of the distribution.

You can only take into account unreimbursed medical expenses that you would be able to include in figuring a deduction for medical expenses on Schedule A, Form 1040. You do not have to itemize your deductions to take advantage of this exception to the 10% additional tax.

NoExcuses · Mar 22, 2007

Gibbo that is a fantastic link....thank you!

Jen, check this out from the link for Traditional IRA's:

Medical insurance. Even if you are under age 59½, you may not have to pay the 10% additional tax on distributions during the year that are not more than the amount you paid during the year for medical insurance for yourself, your spouse, and your dependents. You will not have to pay the tax on these amounts if all of the following conditions apply.
You lost your job.

You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.

You receive the distributions during either the year you received the unemployment compensation or the following year.

You receive the distributions no later than 60 days after you have been reemployed.

Disabled. If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.
You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration.

Unreimbursed medical expenses. Even if you are under age 59½, you do not have to pay the 10% additional tax on distributions that are not more than:
The amount you paid for unreimbursed medical expenses during the year of the distribution, minus

7.5% of your adjusted gross income (defined later) for the year of the distribution.

You can only take into account unreimbursed medical expenses that you would be able to include in figuring a deduction for medical expenses on Schedule A, Form 1040. You do not have to itemize your deductions to take advantage of this exception to the 10% additional tax.

NoExcuses · Mar 22, 2007

Gibbo that is a fantastic link....thank you!

Jen, check this out from the link for Traditional IRA's:

Medical insurance. Even if you are under age 59½, you may not have to pay the 10% additional tax on distributions during the year that are not more than the amount you paid during the year for medical insurance for yourself, your spouse, and your dependents. You will not have to pay the tax on these amounts if all of the following conditions apply.
You lost your job.

You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.

You receive the distributions during either the year you received the unemployment compensation or the following year.

You receive the distributions no later than 60 days after you have been reemployed.

Disabled. If you become disabled before you reach age 59½, any distributions from your traditional IRA because of your disability are not subject to the 10% additional tax.
You are considered disabled if you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued, and indefinite duration.

Unreimbursed medical expenses. Even if you are under age 59½, you do not have to pay the 10% additional tax on distributions that are not more than:
The amount you paid for unreimbursed medical expenses during the year of the distribution, minus

7.5% of your adjusted gross income (defined later) for the year of the distribution.

You can only take into account unreimbursed medical expenses that you would be able to include in figuring a deduction for medical expenses on Schedule A, Form 1040. You do not have to itemize your deductions to take advantage of this exception to the 10% additional tax.

JennifersHope · Mar 22, 2007

This is such great information... I am not clear though what the advantage would be to open a traditional IRA as opposed to the Roth IRA, does the traditional IRA yeild more money then the Roth?

I have decided to hold off putting into my 401k for right this second... The book by the way which Amy recommended to me is a Suze Orman book called "The Money Book for the Young, Fabulous, and Broke"

The reason I have decided to hold off on the 401K is because she says if you are planning on changing jobs in the near future, (within a year or two) that the dollar for dollar match in your 401k is not going to be there till you are vested....

I am going to call HR when I get from my cruise because I might already be vested....

But for now, I am just trying to figure out a reasonable amount that I know I can afford to have come out of my checking each month to go toward my IRA.... The min that I have found is 200.00. and since I am not settled in a home yet, or know what my monthly expenses are going to be it is hard to tell.. BUt I don't want to wait,,, Getting the money invested is key to start making some...

I am so excited to be able to talk about this, I am so eager to get things going in my life..

Jennifer

JennifersHope · Mar 22, 2007

This is such great information... I am not clear though what the advantage would be to open a traditional IRA as opposed to the Roth IRA, does the traditional IRA yeild more money then the Roth?

I have decided to hold off putting into my 401k for right this second... The book by the way which Amy recommended to me is a Suze Orman book called "The Money Book for the Young, Fabulous, and Broke"

The reason I have decided to hold off on the 401K is because she says if you are planning on changing jobs in the near future, (within a year or two) that the dollar for dollar match in your 401k is not going to be there till you are vested....

I am going to call HR when I get from my cruise because I might already be vested....

But for now, I am just trying to figure out a reasonable amount that I know I can afford to have come out of my checking each month to go toward my IRA.... The min that I have found is 200.00. and since I am not settled in a home yet, or know what my monthly expenses are going to be it is hard to tell.. BUt I don't want to wait,,, Getting the money invested is key to start making some...

I am so excited to be able to talk about this, I am so eager to get things going in my life..

Jennifer

JennifersHope · Mar 22, 2007

This is such great information... I am not clear though what the advantage would be to open a traditional IRA as opposed to the Roth IRA, does the traditional IRA yeild more money then the Roth?

I have decided to hold off putting into my 401k for right this second... The book by the way which Amy recommended to me is a Suze Orman book called "The Money Book for the Young, Fabulous, and Broke"

The reason I have decided to hold off on the 401K is because she says if you are planning on changing jobs in the near future, (within a year or two) that the dollar for dollar match in your 401k is not going to be there till you are vested....

I am going to call HR when I get from my cruise because I might already be vested....

But for now, I am just trying to figure out a reasonable amount that I know I can afford to have come out of my checking each month to go toward my IRA.... The min that I have found is 200.00. and since I am not settled in a home yet, or know what my monthly expenses are going to be it is hard to tell.. BUt I don't want to wait,,, Getting the money invested is key to start making some...

I am so excited to be able to talk about this, I am so eager to get things going in my life..

Jennifer

NoExcuses · Mar 22, 2007

Roth IRA is better in most circumstances, Jen. You can take the principal out hassle-free.

The one thing to think about is how much your tax bracket is today vs. what it will be when you need to take the money out.

With the ROTH you pay the tax rate that you're paying right now. With the Traditional IRA, you pay taxes when you withdraw. Do you think that your tax bracket will be lower or higher when you need to take the money out versus today? Do you think the government will raise taxes or cut taxes from now versus when you'll need to take money out.

I personally think that socialism is on the rise and taxes will probably be raised in the US by the time I need to take my money out. So a ROTH fits for me.

NoExcuses · Mar 22, 2007

Roth IRA is better in most circumstances, Jen. You can take the principal out hassle-free.

The one thing to think about is how much your tax bracket is today vs. what it will be when you need to take the money out.

With the ROTH you pay the tax rate that you're paying right now. With the Traditional IRA, you pay taxes when you withdraw. Do you think that your tax bracket will be lower or higher when you need to take the money out versus today? Do you think the government will raise taxes or cut taxes from now versus when you'll need to take money out.

I personally think that socialism is on the rise and taxes will probably be raised in the US by the time I need to take my money out. So a ROTH fits for me.

NoExcuses · Mar 22, 2007

Roth IRA is better in most circumstances, Jen. You can take the principal out hassle-free.

The one thing to think about is how much your tax bracket is today vs. what it will be when you need to take the money out.

With the ROTH you pay the tax rate that you're paying right now. With the Traditional IRA, you pay taxes when you withdraw. Do you think that your tax bracket will be lower or higher when you need to take the money out versus today? Do you think the government will raise taxes or cut taxes from now versus when you'll need to take money out.

I personally think that socialism is on the rise and taxes will probably be raised in the US by the time I need to take my money out. So a ROTH fits for me.

JennifersHope · Mar 22, 2007

That is the thing that sold me on the ROth IRA, I get to pay taxes on it now, and that is it, I am done, and owe no more money for anything....

I guess I just have to read more into the plans and see if I start out making a certain contribution like 200 a month, if I can change the amount I am paying if I am having a hard time having that much withdrawn from my account.

I have looked into the Fidelity Roth IRA and I believe that is the account I am going to end up with...

JennifersHope · Mar 22, 2007

That is the thing that sold me on the ROth IRA, I get to pay taxes on it now, and that is it, I am done, and owe no more money for anything....

I guess I just have to read more into the plans and see if I start out making a certain contribution like 200 a month, if I can change the amount I am paying if I am having a hard time having that much withdrawn from my account.

I have looked into the Fidelity Roth IRA and I believe that is the account I am going to end up with...

Financial Planning

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member

New member