Roth IRA

Category: Finance, Financial Planning.

Investing for retirement may not seem important yet for someone who is still in their early age.

It might be too late then as you will not get the most out of your investments anymore. But once that age of retirement is reached, then you will feel the need to do so. For those who want to start investing for their future, one of the most popular choice is the Individual Retirement Accounts. These two investment tools defer the taxes on your contributions until retirement. There are two options to choose: Traditional IRA and Roth IRA. There is a wide range of investment options available for both including stocks, and bonds, mutual funds.

Traditional IRA contributions are tax- deductible, with some restrictions. Traditional IRA. Your withdrawal upon retirement will be taxed just like an ordinary income. Traditional IRA is good for you if you think that your tax rate at retirement age will be lower than your current tax rate and if you do not plan to withdraw your money before retirement age. But if you choose to withdraw the money before age 59 �, you will have to pay tax upon withdrawal plus a 10% penalty. Since Traditional IRA is tax- deductible, there is no minimum required contribution. It will increase to$ 5000 by the year 200You can make contributions until you reach the age 70 �.

The maximum, is currently, though$ 4000 or 100% of your annual taxable compensation, whichever is less. Beyond that, you will not be allowed to make any payments. Contributions for the year are can be made from January 1 of the year until the tax filing day of the following year, which is the absolute deadline. When you reach age 50 and you want to catch- up on your contributions, you can do so by adding$ 1000 to the current maximum limit. You can start getting funds from your Traditional IRA account once you reach age 50 � without any penalty. However, you are required, after 70 � to withdraw a minimum amount annually. From that age until 70 �, you have the flexibility on how much you want to withdraw or opt not to withdraw yet.

Withdrawing just the minimum amount will let your balance in the account continue to earn interest tax- deferred. Roth IRA contributions are not tax- deductible but withdrawals after age 59 � will be subject to federal taxes. Roth IRA. Also, you are allowed to withdraw your contributions( not the interest) anytime without having to incur penalty. Also, if Traditional IRA does not qualify you due to your high income, Roth IRA is a good alternative. Roth IRA is best for you if you think that your tax rate will be higher upon retirement age, you may need the money before age 59 �.

There is no age limit with Roth IRA. Also, you are allowed to make contributions even beyond 70 � as long as there is still compensation. If a minor child already has a compensation for the year, a parent or guardian may file Roth IRA for the child. The maximum limit of contribution is the same as Traditional IRA, as well as the catch up contributions. Other investments for retirements are also available. You can also withdraw your contributions at any time without penalty.

Most companies offer retirement plans as part of the benefits their employees receive. It is really best to start making investments and saving for your retirement. These IRAs can still be availed even if you have other retirement investments or plans. The earlier you start, the better as your savings will earn more interest once you reach your retirement age. It is never too early to start saving. So, do not discount the fact that retirement is still several years from now.

A Home Equity Line Of Credit Is Rather Like Having A Credit Card

Category: Finance, Financial Planning.

Debt consolidation mortgage loan is one of the options available to those who have mounting debts and are seeking a viable solution. It is a time to take a quick but informed decision.

It can be harrowing to find that you have more debts than you can afford to repay. Steps To Be Debt- Free Fast. You need to estimate the extent of your liability, note down the individual debt along with the interest rate and then determine if a consolidation loan, perhaps a mortgage loan is the best solution to your problems. When your unpaid bills are escalating and you are facing hefty late payment penalties you need to take time to assess your financial situation. Instead of paying off various dues at varying interest rates you can work out a Bad credit debt consolidation mortgage with a lower interest rate that entails affordable, single monthly payout with perhaps longer tenure. You can opt for a home equity loan, a home equity line of credit or a home refinancing loan A home equity loan is a second mortgage taken against the equity of your home. You have three options while considering debt consolidation mortgage loan.

Opt for this only if there is sizeable equity( the difference between the current value of your home and the quantum of the mortgage that has to be repaid) . You can work out a deal with your bank whereby you can use your home as collateral to secure funds as and when required. A home equity line of credit is rather like having a credit card. You need to pay interest only for the amount you withdraw. It is important to note that if you default on any one of these types of credit you risk losing your home. A debt consolidation mortgage refinance is when you work out a deal with another financial institution getting lower rates and better terms for your current mortgage loan. You need to realize that it is your best chance to get debt- free and it is time to exercise caution as you do not want to lose your home.

Compare rates and terms. After you have made the decision to opt for a debt consolidation mortgage loan you need to take sometime to look up various firms offering the service. Shop around for the best possible solution that you find available. It is time you learn to manage your finances, do not spend more that you should and live within a budget, remember it is of no use to regret later when it may be too late to save your home.

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In Either Case The Homeowner Should Investigate The Possibility Of Re- Financing - Finance and Financial Planning Articles:

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A Reverse Mortgage Is Not An Inexpensive Loan

Category: Finance, Financial Planning.

Since first offering reverse mortgages, I ve often been asked, How do I/ we know if a reverse mortgage is right for me/ us? I always start with the same first response, The first thing I would recommend is that you seek the guidance of a qualified financial advisor.

This is a question that has a different answer for different people. After having given that advice, I am only too happy to go through the circumstances for the individual borrowers and give them their options. The loan fees are based on the maximum credit limit for the HUD lending area for the government Home Equity Conversion Mortgage( HECM) . A reverse mortgage is not an inexpensive loan. The loan also has an up- front mortgage insurance fee of 2% of the maximum lending limit which also increases the costs. While the costs seem high, the insurance on this loan are more for borrower protection than any other loan the government insures.

Add to these the normal costs such as appraisal, title fees, escrow, etc. , and it s not uncommon for the costs to get up to$ 17, 000 or slightly more in some of the higher HUD lending areas. This insurance protects the borrowers in two ways. As you read about lenders going out of business, with a HUD insured loan, you never have to worry about whether or not your payments will be made to you. Firstly, if a lender ever goes out of business or fails to pay a borrower in a timely manner for any reason, HUD steps in and makes certain that the borrower receives a steady stream of payments. Also, HUD will insure that the borrower will never owe more than the property is worth regardless of how much money the borrower receives over the years, how much interest accrues, or what property values do in the future. So now that you know what the costs are, how can you decide if you should go ahead with the reverse mortgage?

Everyone hopes that values will continue to go up, but if the values should fall, the senior borrower and their heirs will never owe more than the property is worth. If you re a senior homeowner, ask yourself the following questions: Do you find yourself short of funds every month? Are there rising medical costs you can t quite cover and your insurance doesn t cover them either? Do you wish you had money to repair your home but don t and can t borrow and make payments? Are you making a monthly payment that is keeping you from being able to live your life as you would like? If you answered yes to any of the questions above, it may be time for you to put your equity to work for you with a reverse mortgage!

Do you wish you could travel, or help a loved one through their education but you just don t have the funds in the bank to do so?

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In Addition To Your Retirement Package, Extra Income Can Go A Long Way

Category: Finance, Financial Planning.

If you are just starting out in your career, you may have heard about the benefits of saving for retirement. This is a huge disadvantage for those reaching retirement age because they may not have enough to retire on and live comfortably.

But if you are in your last few years of your job, chances are you did not hear much about saving when you were starting out. Even if you began savings ten or fifteen years ago, you may end up on a fixed budget well into your golden years. While they may have enough to cover medical expenses, housing and other living expenses, there may not be enough to pay for the little things in life. This is one reason why people oftentimes work after retirement even if it is just part time. If you want to earn extra money but do not want to go back to working in an office or other type of environment, there are many online businesses that can provide you with extra income and the flexibility you want to spend time with family, take up new hobbies, and more, travel. Preparing for your retirement may not be at the top of your list, especially if you have children, a mortgage and other bills. By encouraging others to sign up for services, you can earn commissions for your efforts.

By contributing to your retirement plan, you can begin to save for the future. For those who still have a few years before retirement, taking on extra work is not out of the ordinary. But how much you save can also make a difference in terms of how comfortable you will be. Working from home part time can help you save for your retirement while you pay other bills and debts. If you enjoy working with others, then a sales representative type job may be for you. Depending on your skills and interests, you should be able to find a part time job that is fun and rewarding.

There are many companies online that need these types of positions filled so they can increase sales and build a name for themselves. With the commissions you earn, you can pay off extra bills, or use the, save for retirement income anyway you see fit. If you enjoy talking to people, then this could be the second job you have been looking for. It is important to consider all of your options when it comes to taking on extra work before or after retirement. While those who are very close to retirement age have fewer options than those starting out, there is still money to be made. While you may never be rich, you can live the rest of your life in comfort because you took the effort to prepare in advance for it.

The sales opportunities online and off are available to you when you want to make more money. In addition to your retirement package, extra income can go a long way. These jobs are also less stress and can be done at home in your spare time.

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Simply Put, Most Americans Don T Plan For Their Economic Future Very Well, And Are In Fact In Debt More Often Than Not

Category: Finance, Financial Planning.

The greenback has been slipping against the euro, and the pound, the Chinese yuan for the past nine months or so, reaching record lows amidst a global credit crunch and plummeting real estate prices.

According to the Federal Reserve, projected economic growth will slow from more than 5, and inflation remains a concern. What does this mean for US growth? But one figure does not an explanation give. As news of record mortgage defaults, and skyrocketing oil, volatile markets prices continue to trickle in from throughout the US, consumer confidence has tumbled and with it their spending has tightened. The dollar is an indicator of how strong and robust the US economy is, relative to other countries and currencies. This signals an impending shift that Americans will have to weather, but which actually provides a useful impetus for making some fundamental changes in the economy.

Simply put, most Americans don t plan for their economic future very well, and are in fact in debt more often than not. If Americans are forced to actually save, (rather than going into negative savings, as the average American has within the past two years) a falling currency can actually be absorbed without causing economic devastation. No matter how much growth the US economy may generally experience, it is unsustainable for our present levels of spending to result in a beneficial outcome indefinitely. A depressing currency also makes US exports cheaper for other countries, hence ensuring that demand for American labor will be attractive to foreign interests. Therefore, a falling currency forces a necessary economic reality to be faced, which may have a much better end result, even if the transition is somewhat unpleasant. While this may guarantee some growth, if US manufacturers aren t hiring Americans, (because we aren t willing to do the work and illegal immigrants are) the US cannot reap these benefits.

This has been a huge strength in US history, as American manufacturing and industrialization fueled its development into an economic powerhouse throughout the twentieth century. Hence another attitude shift is in order: That there are no jobs in America that Americans should be unwilling to perform. The falling dollar is also beneficial in that OPEC prices oil in dollars. Therefore OPEC absorbs the weakness of the dollar in tandem with consumers, thus placing no special burden on Americans. This means that even though oil almost reached 100$ a barrel within recent weeks, it was still less expensive than it could be if they decided to price oil in euros. If they were to price oil in another currency, Americans would be hard- hit, but perhaps the US would be able to cut back its dependence on foreign oil.

Above all, the US benefits from a less powerful currency because the current model for economic growth is unsustainable, if not downright foolhardy. It s possible that rising oil prices, coupled with the other factors mentioned, could trigger the growth of alternative energy production on a wider scale. In order for America to remain a world leader, it must be able to lead more than amount of products consumed. The US also has to be able to produce more sophisticated solutions for its weaknesses at a lower cost, which it now has the opportunity and incentive to do.

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Selecting The Right Type Of Diamonds Is Very Important

Category: Finance, Financial Planning.

Certified diamonds are those diamonds that have been graded in laboratories and have been issued certificates as to its quality.

Since certified diamonds are considered as tradable commodity, a lot of people all over the world have turned to these precious stones as a form of investment. According to experts, grading and certifying the diamonds make these precious stones fit for trading. Although there are some sectors that discourage people from investing into certified diamonds saying that these stones have variable qualities making it unstable as a form of investment, there are also a lot of people who endorses the diamond as a lucrative form of investment. Investing in certified diamonds can be very lucrative especially if you know how to choose the right types of diamonds. Prospects Of Certified Diamond Investment. According to some market analysts, the prices of certified diamonds have increased about 305 for the last five years and it is predicted to increase an additional 10- 20% in the next couple of years.

As the buying capacity of Chinese investors increase, there is a big possibility that the prices of certified diamonds will increase up to 100% of its present value in the next five to ten years. Analysts believe that the heightened demand for certified diamonds will further push the prices of these precious stones in the near future. Given this scenario, certified diamonds are now considered as better investment compared to gold and will most likely to attract more investors in the near future. Selecting the right type of diamonds is very important. Investing Your Money. If you have a lot of money to invest, it would be a good idea for you to for the big catch.

Rare diamonds can fetch in a very high price in the market so if you can afford to invest in these rare diamonds, go for it. The value of rare diamonds can double in just a short period of time. On the other hand, if you cannot afford to spend millions of dollars in a single diamond, it would be best for you to buy certified diamonds that are of considerable sizes and very good quality. When investing your money in diamonds, be prepared to hang on to your diamonds for a long time. According to experts, the value of bigger diamonds appreciates faster compared to those certified diamonds that have smaller sizes. According to experts, investing in diamonds in not for those people who are in a hurry to get their money. It will take some time before the prices of diamonds increase so you just have to be very patient.

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How Will Re- Financing Affect Tax Deductions

Category: Finance, Financial Planning.

This is a very important question which all homeowners should ask themselves both at the start and towards the end of the process of re- financing. Establish Financial Goals.

The answer to this question can spur the homeowner to investigate re- financing further or convince the homeowner to table the thoughts of re- financing for the moment and concentrate on other aspect of owning a home. This should be the first step in the process of determining whether or not re- financing is worthwhile. While financial goals may run the gamut from one extreme to another the most basic question to ask is whether the more significant goal is long term savings or increased monthly cash flow. Without this step, a homeowner cannot accurate answer the question of the worth of re- financing because the homeowner may not fully understand his own financial goals. This is important because re- financing can usually achieve these two goals. Homeowners who establish a goal of saving money in the long run should consider re- financing options such as lower interest rates or shorter loan terms.

Do You Want to Save Money in the Long Run? Both of these options can considerably lower the amount of interest the homeowner is paying on the loan. Consider an example where a homeowner has an existing debt of$ 100, an interest rate, 000 of 25% and a loan term of 30 years. This is significant because paying less interest will result in a greater cost savings. Just by reducing the loan term to 15 years the homeowner can significantly decrease the amount which is paid in interest during the course of the loan. Therefore this type of re- financing option may only be available to those who have enough cash flow to compensate for the increase in monthly payments.

However, this option will also result in an increase in the monthly payments made by the homeowner. Do You Want to Increase Your Monthly Cash Flow? For these homeowners the overall cost savings may not be as important as having more money available to them each month. Some homeowners may have a chosen goal of increasing their monthly cash flow. These homeowners might consider a re- financing option in which they are able to extend their loan terms. The homeowner will pay more in interest in the long run but will achieve their goal of lower monthly payments and an increased cash flow. This means they will be repaying the existing debt over a longer period of time.

How Will Re- Financing Affect Tax Deductions? The interest paid on a home loan is often tax deductible. This is another serious consideration for homeowners who are interested in investigating the possibility of re- financing. A homeowner who re- finances in a manner which results in less interest being paid annually may adversely affect their tax strategy. A significant decrease in the amount of interest paid will mean a significant decrease in the deduction the homeowner is allowed to take. The implications of this type of chance can be amplified for homeowners who were previously just below a significant tax break line. This reduced deduction can put the homeowner in an entirely different tax bracket and could end up costing the homeowner money in the long run.

For this reason, homeowners who are considering re- financing should have a tax preparation professional determine the ramifications re- financing will have on their tax return before a decision is made.

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