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2010 Roth Ira – No Income Caps
Americans are infamous for our apparent inability to save money. The Great Recession seems to be changing this a bit, but there is still not indication that Americans are saving in mass. This is okay while we are in our working years, but what about retirement? The government is very nervous about tens of millions of us retiring with next to no savings. This is why it has set up programs like the traditional individual retirement account and 401k plans. Part and parcel to these programs is an effort to get the middle and lower classes to save. At the same time, the government doesn’t want to lose tax revenues. As a result, it has always placed an income cap on the Roth. The figure the last few years has been $100,000. This has certainly led to some grumbling by folks who make more than this amount, and rightfully so. 2010 is a special year when it comes to the Roth. You can convert to it notwithstanding the amount of income you earn. It is a one year tax loophole. You will still have to pay income tax on the money you pull out of any other retirement account, but you won’t have to pay any penalties. Also, you will be able to spread the income tax hit over the 2011 and 2012 tax years to bring down the pain. Should you convert? It makes sense for most people. Taxes will be higher in the future as out of control government spending requires rates to rise to pay the interest on a national debt that will be 20 trillion dollars by 2020. Making a move now to escape said future tax increases now will save you an absolute fortune later. Article Directory: http://www.articledashboard.com Barry Milton writes about Roth IRA conversion strategies and other financial planning subjects for UFCAmerica.com. |
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