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We'll this year will usher in some changes to the popular retirement plan known as the Roth IRA and those changes.
-- -- some misconceptions.
About what you can and you can't do.
Barbara Ross is co-founder are still advisors and joins us -- to break down everything you need to know but IRAs Roth IRAs 401 occasion.
Other acronyms in numbers and Barbara welcome.
And -- -- first off outlined some of the changes and what our viewers need to know.
Well what have.
One of the biggest misconceptions is that 2011 you can't convert and I were into a Roth IRA if you had too much in common more than a 100000 dollars.
That was a new tax saw last year but it still exists and so if you didn't get Iran to converting to a Roth IRA last year and really showed up.
You still can consider doing -- OK that's good news now who is eligible.
Or who should convert from a traditional IRA to -- Roth IRA.
Anyone who's financially and the -- And it is going to be end up transferring assets to their kids and maybe even their grandchildren down the road.
Really ought to think about doing a Roth IRA -- that you paychecks now which -- and generally not an advocate of paying tax early.
But what tax rates where they are this year and next year.
You probably OBM up you know -- tax about such a terribly high rates given what the rates might be in the future.
And as long as that money can stay in Iraq -- for a long time it might make sense even just for yourself.
To pay the tax now to get a deal -- 35% sounds like you see that.
Eventually going up higher for the wealthy.
Absolutely but even -- if you're thinking about like your kids in your grandkids even if the tax rate is going to be at their level much lower.
If it's really far pushed off into the future the fact that no money in that -- higher rate ever has to be taxed.
Is a wonderful wonderful advantage and that even can make sense for people they have no tax rate.
Think about like kids for example.
That our high school college earning a little bit of money never paying any tax because of their standard exemption and standard deduction and personal exemption.
Date should be put money into -- Roth IRA because they can start their retirement account early.
And that money can stay in there for a really long time and never beef up his attacks -- here's a 401K who should use either traditional IRA or Roth fiery.
I don't know what what's best well for the people that are are working and trying to establish some -- 41 K plan makes a lot of sense particularly.
If your employer also matches your contributions.
Even if you camp -- so that money aside for a really really long time.
If you've gap like fifty cents on every dollar you contribute that's found -- really hard exactly and in addition -- -- it gets -- discipline to actually start saving that's a real real easy way to say.
But anybody that can set some money aside for their retirement.
Ought to think about more than just simply their 401K plan.
And think about making contributions.
To a Roth IRA.
And I would say a Roth IRA before traditional -- -- And you might think -- okay well if I and making a lot of money I can't contribute to a Roth IRA because there's rules on how much income you can -- you know.
But you know -- there's ways that as long as you don't have a lot of taxable money in our traditional IRA right now.
You can actually get money into a Roth IRA so you should even open up your mind to Iraq prior -- when your work.
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