"Ed Zollars" <ezollar[at]mindspring.com> wrote in message
news:cs36dp0av3[at]news3.newsguy.com...
- quote -

Most people don't know, but Senator Roth's staff designed the Roth IRA to
compete directly with permanent, or cash value, life insurance that was sold
to fund nonqualified plans for top hat groups. Apparently, Roth's staff
thought it wasn't fair that people earning high incomes could have access to
these plans, and they wanted to level the playing field. What they failed to
recognize was that ANYBODY could enjoy the same tax benefits, but the
average lay person is bombarded with myth and urban legend regarding life
insurance, so they often go through life ignorant of many alternative
methods of accumulating wealth.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

On Wed, 12 Jan 2005 06:50:38 CST, Ed Zollars <ezollar[at]mindspring.comwrote:


- quote -

Amen to that. As someone who remembers when municipal bonds were
truly tax-free, most interest was deductible and a host of
now-non-deductible items were deductible, my approach to "tax
planning" is to take a very short-term view.

Accordingly, I am very likely to prefer anything that cuts taxes *now*
as opposed to later, and very likely to invest purely for financial
gain, without thought to future tax consequences.

-HW "Skip" Weldon
Columbia, SC

Brent D. Gardner, ChFC wrote:

- quote -

Note that this isn't the only "potentially tax free" item that exists
out there. Life insurance similarly is tax free *IF* you "play by the
rules" and remember that ultimately it is the death benefit that is tax
free. If you do not hold the policy until death, you may discover that
one was tax deferred only as well <grin> .

A key difference is that you can borrow against the inside build-up on a
life insurance policy, unlike a Roth IRA. However, should the policy
lapse, the loan payoff will become part of the consideration received
for the policy.

All this really means is that you should be careful about "one liners"
when dealing with taxation issues. Tax free is a term that has
tremendous marketing impact, but a good adviser will make it clear that
in most cases there are rules that have to be followed to ultimately
obtain that result.

--
Ed Zollars, CPA
Phoenix, Arizona

Which raises other questions:

If I have aleady established a Roth IRA over 5 years ago, and I invest
fresh money into it today, do I start counting all over again?

A a variation: if I established Roth A #1 over 5 years ago and invest
fresh money into Roth IRA #2 today, do I start counting all over
again?

Thanks in advance.

On Tue, 11 Jan 2005 10:25:37 CST, Ed Zollars <ezollar[at]mindspring.comwrote:

- quote -

"Trapper" <happyhappynospam[at]hotmail.com> wrote in message
news:jv2dneOxst91I37cRVn-2A[at]comcast.com...
- quote -

This is a VERY common misconception, but as Ed mentioned, a Roth IRA isn't
exempt, or free, just deferred and *potentially* tax free later on.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://www.brentdgardner.com/
http://www.gardnerfinancialgroup.com/
http://www.topgunproducers.com/

Si vis pacem para bellum!

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

Trapper wrote:
- quote -

It is only *potentially* tax free, which is why I suspect T. Rowe Price
decided to state it the way they did. Only if you hold it in the fund
for the required period will the funds be able to come out without being
considered taxable income.

So, I suspect, as of right now that amount is only tax deferred as far
as you are concerned. It will *eventually* turn into tax free gain down
the road.

--
Ed Zollars, CPA
Phoenix, Arizona

In the annual Roth IRA statement that I got from TRP yesterday
it mentioned the gain (short and long) as being tax deferred. Since it
is Roth IRA shouldn't it say Tax-exempt?