Comments on: Comparing Roth IRA Versus Traditional IRA http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/ Money Management, Small Business, Career Fri, 19 Mar 2010 14:05:17 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Ryan http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-22232 Ryan Wed, 10 Mar 2010 02:52:59 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-22232 Hi Vanna, Your parents are near retirement age and this type of planning calls for specialized recommendations. They should speak with a certified financial professional regarding their situation and to help them determine if they can afford to retire. I do not have an answer regarding the tax situation either. I use an accountant for my taxes. You can try contacting a local accountant or using a tax software program for their taxes. Sorry I couldn't be of more assistance. Hi Vanna, Your parents are near retirement age and this type of planning calls for specialized recommendations. They should speak with a certified financial professional regarding their situation and to help them determine if they can afford to retire.

I do not have an answer regarding the tax situation either. I use an accountant for my taxes. You can try contacting a local accountant or using a tax software program for their taxes. Sorry I couldn’t be of more assistance.

]]> By: Vanna http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-22226 Vanna Tue, 09 Mar 2010 22:19:44 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-22226 Hi, I want to know which IRA is better for my parents to invest in? My Mom will be 60 this July, she's an Oregonian state's employee. She has 401k at work, she plan to retire at 60. Currently, she has $8000 invested in Traditional IRA account at her credit union bank. My Dad is 61 and unemployed, not planning to return to the workforce due to his health. Currently, he has $5000 invested in the Roth IRA account at the bank. My parent's income is $30700 for this year, they file jointly return. My question is should they continue to invest into their IRA account, if yes, which one is better for them Roth or Traditional? And at what amount? They also received a statement "2009 IRA Fair Market Valud and 2010 Required Minimum Distribution Statement" What is this and what should I do with it? Do they have to file tax or just keep it for their record? I'm doing their tax for them. Please help!!!! Hi,

I want to know which IRA is better for my parents to invest in? My Mom will be 60 this July, she’s an Oregonian state’s employee. She has 401k at work, she plan to retire at 60. Currently, she has $8000 invested in Traditional IRA account at her credit union bank. My Dad is 61 and unemployed, not planning to return to the workforce due to his health. Currently, he has $5000 invested in the Roth IRA account at the bank. My parent’s income is $30700 for this year, they file jointly return. My question is should they continue to invest into their IRA account, if yes, which one is better for them Roth or Traditional? And at what amount?

They also received a statement “2009 IRA Fair Market Valud and 2010 Required Minimum Distribution Statement” What is this and what should I do with it? Do they have to file tax or just keep it for their record? I’m doing their tax for them. Please help!!!!

]]> By: Ryan http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-22158 Ryan Fri, 05 Mar 2010 18:37:23 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-22158 Mark, Regarding Roth IRAs - yes, you can contribute as little as your IRA custodian will allow (some IRA custodians require a minimum investment to open an account, usually anywhere from $100 - $3,000, depending on the financial institution you use). You can make regular or irregular contributions at any time, so long as you don't exceed the maximum contribution limit. You can also contribute to an IRA for the previous tax year up to that year's tax filing deadline (April 15th). For example, this year you can contribute to a 2009 IRA until April 15. Once that deadline passes you can no longer make contributions for that tax year. Deductible IRAs have an income limit. In this case you would not be able to take a deduction on a Traditional IRA contribution, so you may be better off investing with a Roth IRA and receiving tax free withdrawals in retirement. It doesn't help your tax situation now, but it will likely be better in your retirement years when you begin making withdrawals. Mark,

Regarding Roth IRAs – yes, you can contribute as little as your IRA custodian will allow (some IRA custodians require a minimum investment to open an account, usually anywhere from $100 – $3,000, depending on the financial institution you use). You can make regular or irregular contributions at any time, so long as you don’t exceed the maximum contribution limit. You can also contribute to an IRA for the previous tax year up to that year’s tax filing deadline (April 15th). For example, this year you can contribute to a 2009 IRA until April 15. Once that deadline passes you can no longer make contributions for that tax year.

Deductible IRAs have an income limit. In this case you would not be able to take a deduction on a Traditional IRA contribution, so you may be better off investing with a Roth IRA and receiving tax free withdrawals in retirement. It doesn’t help your tax situation now, but it will likely be better in your retirement years when you begin making withdrawals.

]]> By: Mark http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-22150 Mark Fri, 05 Mar 2010 16:15:19 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-22150 Hi, I have two questions regarding Roth IRA's. I don't have that much extra cash, but I would like to start at least, and hope to contribute more each year. That is permissible, isn't it? Second, I am trying to figure out my tax benefit for doing it now, before filing taxes and it seems because I am married filing jointly and our line 38 AGI is more that $55k...I can't deduct anything? Could this be right? I hear so much every year about making sure to do this before April 15, and yet it seems most middle class folks like me can derive no benefit, at least with this years taxes. Please tell me I am missing something? Hi,

I have two questions regarding Roth IRA’s. I don’t have that much extra cash, but I would like to start at least, and hope to contribute more each year. That is permissible, isn’t it?

Second, I am trying to figure out my tax benefit for doing it now, before filing taxes and it seems because I am married filing jointly and our line 38 AGI is more that $55k…I can’t deduct anything? Could this be right? I hear so much every year about making sure to do this before April 15, and yet it seems most middle class folks like me can derive no benefit, at least with this years taxes. Please tell me I am missing something?

]]> By: Ryan http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-21901 Ryan Fri, 19 Feb 2010 17:55:15 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-21901 Hi Jim, you should be able to do that. You can open a spousal IRA for your wife up to the limit, and you can do the conversions this year, and possibly next year. Just be sure you know the ins and outs of the conversion process and are aware of any taxes or other fees that may be required. I recommend speaking with a financial planner or tax professional about this to make sure you do the paperwork properly. Hi Jim, you should be able to do that. You can open a spousal IRA for your wife up to the limit, and you can do the conversions this year, and possibly next year. Just be sure you know the ins and outs of the conversion process and are aware of any taxes or other fees that may be required. I recommend speaking with a financial planner or tax professional about this to make sure you do the paperwork properly.

]]> By: Jim Young http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-21897 Jim Young Fri, 19 Feb 2010 16:15:09 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-21897 I work and make over th limits for a IRA. Have 401k at work and max it out. Want to open a IRA this year and then convert it to a roth. My wife is a stay at home mom. Can I open a combined IRA and put $5000 for me and $5000 for my wife so we have $10K in a IRA - then want to convert it to a Roth IRA. Main goal is to get $10K into a Roth. Can I do this again in 2011??? Thanks Jim I work and make over th limits for a IRA. Have 401k at work and max it out.
Want to open a IRA this year and then convert it to a roth. My wife is a stay at home mom. Can I open a combined IRA and put $5000 for me and $5000 for my wife so we have $10K in a IRA – then want to convert it to a Roth IRA. Main goal is to get $10K into a Roth. Can I do this again in 2011???

Thanks

Jim

]]> By: Ryan http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-21872 Ryan Thu, 18 Feb 2010 02:40:44 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-21872 Marie, Based on my understanding, you need to have earned income to contribute to an IRA. So if you earned less than the maximum contribution, you can only contribute up to the amount you earned. An exception would be if your spouse had more earned income, then you could use that income toward your contributions. I recommend contacting a tax professional or the IRS for more specific information based on your exact situation. Marie, Based on my understanding, you need to have earned income to contribute to an IRA. So if you earned less than the maximum contribution, you can only contribute up to the amount you earned. An exception would be if your spouse had more earned income, then you could use that income toward your contributions. I recommend contacting a tax professional or the IRS for more specific information based on your exact situation.

]]> By: Marie Olsen http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/comment-page-1/#comment-21864 Marie Olsen Wed, 17 Feb 2010 17:54:20 +0000 http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/#comment-21864 I only made $3,500 last years and see nowhere that says anything about a minimum amount affecting the $5,000 I could put into a Roth IRA. Can I put in the full $5,000, or even $6,000 mentioned? I only made $3,500 last years and see nowhere that says anything about a minimum amount affecting the $5,000 I could put into a Roth IRA. Can I put in the full $5,000, or even $6,000 mentioned?

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