Retirement Savings Ideas To Take Advantage of Before 2009

You can give your traditional and/or Roth IRAs a boost in 2009!

No matter what the markets are doing, the end of the year is always a good time to assess your retirement plan. To ensure you don’t miss out on retirent ou can by December 31, 2008. 

Update Your Beneficiary

Beneficiary designations are a guarantee that any benefits payable on your behalf after your death will be made to the individual of your choosing and in the manner you wish. To be certain that only your intended beneficiary does, in fact, receive your benefits in the event of your death, make sure to update your electronic beneficiary designation.

 

Increase Your Contribution Rates

The end of the year is a great time to increase your contribution rate – even by a small amount!  Putting away a small percentage of your earnings now gives you a head start on your retirement savings.

 

2009 IRS Maximum Contributions

You will be able to contribute to your retirement account up to $16,500 before taxes are deducted and an additional $5,500 catch up contribution if you will be age 50 or older in 2009.  For more information, go to irs.gov.

~Joan Jackson, Publisher, The Baby Boomer Resource Center.com

 

Gotta Love Those Roth IRAs!

I must say, if you can possibly afford to fund a Roth IRA, by all means…DO IT!

A Roth IRA is an Individual Retirement Account (IRA) that is basically funded with post (after-tax) monies.

Named for its chief legislative sponsor, Senator William Roth of Delaware, a Roth IRA differs in several significant ways from other IRAs.

In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. BUT…what’s great is, when you start to withdraw money from a Roth IRA, they are tax-free! Also, the advantage of the Roth IRA over a traditional IRA is that there are fewer withdrawal restrictions and requirements. Even better, transactions inside the Roth IRA account (including capital gains, dividends, and interest) don’t incur a current tax liability!

Withdrawals are generally tax free when the account has been opened for at least 5 years and the owner’s age is at least 59 ½.

Many brokerage firms (e.g., Fidelity, Vanguard, T.Rowe Price, just to name a few) offer Roth IRAS. According to Kiplinger’s Retirement Report (May issue) starting this year (2008), you can now roll funds from your company plan into Roth IRAS IF you have an adjusted gross income of $100,000 or less (good news: the cap ends after 2009!).

Caution: The rollovers are taxable, but no 20% withholding is required.

~Joan Jackson, Publisher, The Baby Boomer Resource Center.com