ksu93dlv[at]aol.comAntiSpam (Ksu93dlv) writes:

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It's $3000/yr for 2002, 2003, 2004.
$4000/yr for 2005, 2006, 2007
$5000/yr for 2008.

UNLESS YOU ARE OVER 50!
In which case, it's $3500/yr 2002-2004
$4500/yr 2005
$5000/yr 2006, 2007
$6000/yr 2008.

After 2008, it goes up with inflation, but only in $500
increments.

I'm guessing that the "over 50" means "if you turn 50
during that contribution year".

BTW, the limits are the same for "traditional" IRAs, too,
for those who do not qualify to contribute to a Roth (ie.
because they make too much money: $160,000 for married
filing jointly or $110,000 for single folks).

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I prefer to make my contribution right up front at the beginning
of the year. Get it out of the way and done with and never
think about it.

For the 401k, of course, making an up-front lump sum contribution
isn't possible, so that's done through the course of the year
via payroll deductions and, again, since it's on auto-pilot,
I never have to think about that, either (except for, every
once in a while, reviewing the asset allocation, since there
are only a limited set of funds available for this investment).

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For beginners, I'd recommend any/all of Eric Tyson's "For Dummies"
books. Dumb titles, annoying bright yellow covers, but great
books by an excellent, clear and easy to understand author,
including some worksheets which you may or may not find helpful.
In particular, Personal Finance for Dummies is now in its 4th
edition, which just came out a few months ago. I haven't looked
at the new edition yet, but I'd expect that it's been updated
to take into account some of the recent things like, oh, the
increased limits on IRA contributions.


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Definitely contribute as much as the law allows you to contribute to your Roth
IRA every year. I thought it was still $3,000 this year. If it has gone up to
$3,500 I didn't realize that. I try to plan my year in advance so I know how
much I'll be able to contribute to my 401k at a constant level rather than
waiting until the end of the year and cranking up the contribution. Of course,
if you get toward the end of the year and realize you can afford more than
you're contributing, by all means increase it. Many people contribute to a Roth
IRA in much the same way (i.e. monthly contributions), but I have always just
made a lump sum contribution to make it easier.

As far as books, the two I found to be most helpful were Common Sense on
Mutual Funds by John C. Bogle and A Random Walk Down Wall Street by Burton G.
Malkiel. These are not books for "aggressive" investors who want to try to time
the markets and get rich fast. The basic premise of both books is that, over
time, the best and most effective way to invest for retirement is to identify
low-cost funds with solid credentials and park your money there for the long
haul.

When you say "Once you max out the Roth IRA" do you mean the $3500 per
year limit? So max it out each year and then crank my 401(k) back up
as much as I can afford?

What books do you recommend?

Thanks

"John A. Weeks III" <john[at]johnweeks.com> wrote in message news:<011220030827511730%john[at]johnweeks.com> ...
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Absolutely. The first thing you should always do is take advantage of your
employer's matching program because it's free money, and you can't beat that.
Once you've done that, max out your Roth IRA ($3,000 limit currently). The
reason for that is that it is tax-free upon withdrawal when you retire, as
opposed to a 401k, which is tax-deferred. So today you'll get taxed on your
money, then invest it in a Roth, and 35 years from now when you need it all the
gains are tax-free. Once you've done that, go back and contribute as much as
you can afford to your 401k again.

In article <a586d8cf.0311301852.7064592d[at]posting.google.com> , Russ
<russ[at]russ.net> wrote:

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Yes. Once you max out the Roth IRA, go back and max out your 401K.
When you have both of them maxed out, then post back here for more
advice.

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That is hard to say without being a broker or a registered agent.
If you have to ask, then I would suggest education. In the mean
time, stick with low cost index funds until you learn enough to
pick what you need. Vipers or Vanguard total stock market index
funds are good. In the long run, you need growth, but you will
have to learn on your own how to pick these funds.

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Real estate is very high right now. REITs have had a good run,
but they may have already peaked. The bad ecomony has pinched
some of the REITs that invest in office space due to so many
technology companies going toes up or otherwise laying off staff.

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You need to be careful looking at buzz words. Many pundits harp
on no-load funds, but in reality, most no-load funds have very
high expense ratios, often much higher than load funds. What you
really are looking at is the total cost to own a fund, including
any loads, expenses ratios, and 12b1 fees.

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Yes, put away as much as you can now. The money that you put
away between now and age 36 means more than anything that you
put away from 40 to 65. Time is your friend today, and your
enemy once you turn 35.

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Learn. Buy some books and read. No one care about your future
more than you do. When money is involved, everyone else you talk
to simply wants to take it away from you. You are the one that
needs to step up to the plate and manage your future, and the
only way you can do that is if you know what you are doing.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

On Mon, 1 Dec 2003 04:00:11 CST, russ[at]russ.net (Russ) wrote:

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This is more of an observation than a suggestion:

With investing, the "Sin of Recency" refers to investing in things
that have done well lately. Done often enough, it leads to buying
high.

-HW "Skip" Weldon
Columbia, SC

So I opened an account with E-Trade because my H&R Block financial
advisor told me I should start funding one. I'm already funding my
employer's 401(k) with 6-8% (with $1 for $1 up to 4.5% matching) as
well. My question is 1) should I really start putting regular
contributions into a Roth IRA, and 2) which funds are good? I bought
an initial $250 in WESRX (some realty fund that looked good). It's a
no-load fund.

I'm 31 years old.

Any suggestions?