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Posted on 8/31/12 at 1:16 pm to crosswood
quote:
and break down for me what the hell Roth IRAs are
an investing vehicle that allows tax free gains and income.
quote:
why an individual should invest in one
because you aren't taxed on your gains
quote:
why not an individual should invest in one
If you plan on losing money, you can't deduct your losses?
Posted on 8/31/12 at 1:18 pm to crosswood
It is a retirement investment vehicle. It allows you to put in after tax $ (money you have once you has paid your taxes), that grows over time. The growth is not taxed, and you can withdraw the money without paying taxes. Think of it as a farmer: you pay your taxes on the seed, and get the harvest tax free.
Posted on 8/31/12 at 1:40 pm to GoCrazyAuburn
Does anyone know the income max for a couple on Roth IRAs? I think it is 175k but not sure.
Posted on 8/31/12 at 1:44 pm to Waffle House
That's what I found.
Posted on 8/31/12 at 1:44 pm to Waffle House
$173k IIRC for under 50
Posted on 8/31/12 at 1:49 pm to GoCrazyAuburn
From 173k-183k you can contribute, but at a reduced Amount. After 183k you can't do any.
Posted on 8/31/12 at 2:10 pm to GoCrazyAuburn
Is it correct that if my wife and I file jointly, that I can contribute $10,000 a year?
Posted on 8/31/12 at 2:14 pm to CQQ
quote:
Is it correct that if my wife and I file jointly, that I can contribute $10,000 a year?
Yes, assuming you aren't over the income limit.
Posted on 8/31/12 at 2:32 pm to TheHiddenFlask
quote:
Yes, assuming you aren't over the income limit.
Unfortunately we have a long way to go to hit that
Posted on 8/31/12 at 3:59 pm to TheHiddenFlask
So what if I don't have any income. I am still a student, but have the assets to open up a Roth Ira and contribute 5k for the first year and maybe 1K every year until 2015 when I will hopefully have job.
Posted on 8/31/12 at 4:51 pm to lighter345
quote:
So what if I don't have any income
Roth is definitely the way to go.
You'll never be in a lower tax bracket.
Posted on 8/31/12 at 5:20 pm to TheHiddenFlask
Yep. It would be foolish not to set up a Roth when you are young, if you have the funds to do it.
Posted on 8/31/12 at 6:58 pm to GoHoGsGo06
quote:
One of the reason's Roth's are pumped up is the assumptions tax rates will increase overtime
this is where I'm confused a little. what if..... I'm completely retired when I start making withdrawals from my roth. my only income is from other retirement accounts. will my tax bracket really be that high? Once I retire from my job, I would think it would drop back down. No?
Posted on 8/31/12 at 7:24 pm to lighter345
don't think you can contribute without earned income from you or your spouse (if filing jointly)
Posted on 8/31/12 at 8:01 pm to eye65
quote:
don't think you can contribute without earned income
Correct.
Posted on 8/31/12 at 9:04 pm to lighter345
quote:
So what if I don't have any income. I am still a student, but have the assets to open up a Roth Ira and contribute 5k for the first year and maybe 1K every year until 2015 when I will hopefully have job.
I'm 20. I established a Roth and put in $1k into a couple different ETFs a month ago (already made 1% on my money
). I'll contribute another grand before the calendar year is over. I think it's a good idea to get started early if you break it down with TVM. If you want to go with a target date fund, Vanguard all the way.
Posted on 9/1/12 at 1:40 am to Skin
quote:
this is where I'm confused a little. what if..... I'm completely retired when I start making withdrawals from my roth. my only income is from other retirement accounts. will my tax bracket really be that high? Once I retire from my job, I would think it would drop back down. No?
I know it's been stated but you aren't taxed on your gains. Too me that's the best part of it.
Let me give a hypothetical example to see if I understand it correctly:
You make $50,000 a year and contribute the max of $5,000 to a Roth. Lets say down the road near retirement that $5,000 has grown into $50,000. You get the $50K tax free since you already paid taxes on the intial $5K.
Where as without a Roth you could payroll deduct the $5,000 and save on annual income taxes but uncle sam will tax the hell out of that $50,000 when you withdraw it.
Is that right????
Posted on 9/1/12 at 8:43 am to TheHiddenFlask
quote:
If this is your biggest concern, just put it in a low cost (vanguard) target retirement date fund. It's the personal finance version of autopilot.
I'm still extremely young but have the means to put in the max ($5K/year from this thread) into a roth ira. I literally have no idea what kind of funds or whatever I want to invest in.
So my best bet would be pick one of the target retirement date funds? And then maybe do some research and a later date I can change what I want to invest in? Thanks.
ETA I completely understand this is the best way to go to save for the future, just have no understanding of the funds they have that are available.
This post was edited on 9/1/12 at 8:45 am
Posted on 9/1/12 at 11:37 am to hiltacular
quote:
So my best bet would be pick one of the target retirement date funds? And then maybe do some research and a later date I can change what I want to invest in? Thanks
yes, good plan. i started out with vangaurd target retirement fund and stuck with it for a few years. once i got some knowledge under my belt, i exchanged shares for other vangaurd funds with higher potential rates of return. since i'm young, i'll take the ups with the downs. buy more when its down.
here are the ytd returns of target funds as of 8/31. Good, but not great.
quote:
Target Retirement 2030 9.85%
Target Retirement 2035 10.39%
Target Retirement 2040 10.59%
Target Retirement 2045 10.57%
Target Retirement 2050 10.58%
Target Retirement 2055 10.57%
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