Successful retirement not to mention retirement planning takes more than advice and more than products. Successful retirement and retirement planning is a state of mind. How to create an atmosphere of shared goals about the future!
Confused about whether you can contribute to a Roth IRA? Try using these simple rules:
Income
To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
$160,000 — Married Filing Jointly.
$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year).
$110,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse during the year).
Age
There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.
Contribution Limits
In general, if your only IRA is a Roth IRA, the maximum 2005 contribution limit is the lesser of your taxable compensation or $4,000. For individuals age 50 or older, the contribution limit is $4,500
The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
$150,000-$160,000 — Married Filing Jointly
$0-$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year)
$95,000-$110,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse)
Contributions to Spousal Roth IRA
You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.
When to Make Contributions
Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions). Roth IRA contributions are not tax deductible and are not reported on your tax return. On the other hand, you do not include in your gross income, and therefore are not taxed on, any qualified distributions or distributions that are a return of your regular Roth IRA contributions or that are rolled over into another Roth IRA.
The Roth IRA is an incredibly valuable retirement vehicle since distributions are made tax-free. If you are considering retirement planning, make sure to investigate the Roth.
About the Author: Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses for overpaid taxes. Discovery tax strategies and deductions in our tax articles section.
Source: www.isnare.com
By: Richard Chapo
Most people are not ready for retirement:
And I'm not just talking about the money side of the equation.
I am talking about having something constructive to do when you don't have to go to the office anymore.
We recommend that you establish a communication process guaranteed to uncover what's important to you and your family - when you have all that time you always wished you had. This is the first step in setting priorities and getting buy-in from everyone, which will help you start sooner rather than later to create a plan and then execute it!
As consultants, business coaches, and Certified conflict prevention and resolution professionals - with combined experience of over 100 years helping executives and business owners plan for their future - the one element, required before anything can move forward, is a spirit of cooperation.
That spirit is either a natural result of an atmosphere of shared goals about the future, or it one they have refined or learned from scratch.
Strategic Conversations is a process you can learn that will provide enhanced communications for life. Their free resources and accompanying free research report will help you establish the framework for determining, among other things, the right financial planning strategy for you right now!
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