"BMS" <mcfarland[at]yahoo.com> wrote in message
news:w46dnZVnGODycLHfRVn-3Q[at]comcast.com...

- quote -

The 2005 maximum for IRAs (Traditional or Roth) is $4000 ($4500 if you've
already gotten the black balloon for your birthday).

Elizabeth Richardson

FranksPlace2[at]gmail.com wrote:

- quote -

You can put it before non-deductible IRA contributions as well,
depending on how tax efficient the account is.

-Will

The Roth IRA only allows you 3,000 after tax dollars, if you're under 50,
the equal to 3,450 pre tax (15% tax bracket, more if you are in a higher
bracket).

The 401k also allows you up to 14,000 pretax dollars.


"Injun Joe" <j.chapinxxx[at]sbcglobal.net> wrote in message
news:wlFWd.10339$MK2.2715[at]newssvr31.news.prodigy.com...
- quote -

I like this list. We should put it in the FAQ section. Do we have an
FAQ section?

Can I add "tax efficient taxable account (e.g mutual funds, buy & hold
stocks)" before regular taxable account.

Frank

In article <EqadnbdWy6JQCbHfRVn-vg[at]centurytel.net> ,
"MTW" <mtwingcpa[at]yahoo.com> wrote:

- quote -

the congress-critters see all of this Roth money coming
out of hibernation in 30 years that they will be able to
keep their taxing paws off of it. Despite it being a promise
today, that urge to tax it is going to be downright irresistable.
Especially when the younger and middle class people will be
yelling at congress to tax those rich old coots that were
smart enough to put money in the Roth in the first place.

I am still hoping that I hit that age before the taxing
goes into high gear, and that any tax is still going to
be less than normal income taxes on traditional IRA and
401K money. Who knows what income taxes will be in 20
years...if our current spend & spend philosophy remains
the norm, it could be 75% of gross by then.

-john-

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

"MTW" <mtwingcpa[at]yahoo.com> writes:
- quote -

[re deductibility of contributions, which is distinct from
tax-deferred in certain cases]

- quote -

b) tax free
c) tax-deferred with deductible original contributions
d) tax-deferred without deductible original contributions
e) taxable

It seems that the only part of this which might be
arguable is whether tax-free comes before or after
tax-deferred with deductible original contributions.

To put it in more concrete terms:

a) 401k up to the point where one gets an employer match
b) Roth IRA
c) 401k (beyond match), deductible IRA contributions
d) non-deductible IRA contributions, certain insurance products
e) regular taxable account

One minor addendum - somewhere between a) and b)
probably ought to toss in "pay down high-interest debt
like credit cards" assuming any are outstanding.

Just clarifying, numbering and giving examples.

I'd certainly like to see the examples expanded, especially
with respect to which insurance products one might consider
in the context, specifically, of savings (ie. term or
death benefits are not really relevant here, nor are LTC
or disability or, for that matter, health or fire or auto...)


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

John A. Weeks III wrote:

- quote -

Consider the fact that you can't control Congress. <grin
MTW


======================================= MODERATOR'S COMMENT:
We're getting close to the useful life of this thread. PLease consider email.

In article <EoSdnQU4-MsB8rHfRVn-rw[at]centurytel.net> ,
"MTW" <mtwingcpa[at]yahoo.com> wrote:

- quote -


-john-

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

John A. Weeks III wrote:

- quote -

Except in my book it should be #2 - or maybe even #1 if you
consider the tax savings to be "free" money. Never overlook the
value of a "bird in the hand." <grin
MTW

In article <IM6dnbFkivDco7bfRVn-vQ[at]centurytel.net> ,
"MTW" <mtwingcpa[at]yahoo.com> wrote:

- quote -

Feel free to slide that in at #4, and move taxable to #5.

-john-

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

A few key items that should factor into your decision are 1) your age
2) your current tax bracket, and 3) your future tax bracket. If you are
young and in a low tax bracket, then I'd say you should probably go
with the Roth IRA. Yes, you will not be able to deduct the contribution
from current year's taxes, but you won't lose much given your low
bracket. And later when you retire you'll be able to withdraw the
money, which will have, hopefully, multiplied several times, tax free.
If you're closer to retirement and in a high tax bracket, it may make
more sense to contribute to the 401k.

Hope that helps, some.

Tom B.

- quote -

My company does NOT match either..... so i stopped
adding to my 401k.

In article <wlFWd.10339$MK2.2715[at]newssvr31.news.prodigy.com> ,
"Injun Joe" <j.chapinxxx[at]sbcglobal.net> wrote:

Tgere will be some difference in opinion on this. A lot depends on shat
you do for the rest of your life. If you will be making significant
contributions to your 401K for many years, it would make sense to
channel more money into the Roth.

I find that I have made a major mistake in saving by putting most of my
mondy into a 401K and subsequently rolling that into an IRA. I am now
retired and forced to take major withdrawals from the IRA. As a result,
my taxes are now fairly large. I would have been better off saving
money into a broad index fund where I could ultimately take advantage of
some of the tax loss savings on investments.

Overall, I cannot be too unhappy as we live a good life.

Dick


- quote -

John A. Weeks III wrote:

- quote -

Would you therefore conclude that "most pundits" consider the
DEDUCTIBILITY of the contributions to be irrelevant?

MTW

In article <wlFWd.10339$MK2.2715[at]newssvr31.news.prodigy.com> ,
"Injun Joe" <j.chapinxxx[at]sbcglobal.net> wrote:

- quote -

Most pundits tell you to do it in the following order:

free money first
tax free second
tax deferred third
taxable fourth

With no match, you get no free money. The Roth is tax free,
so that is first in line for you.

-john-

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

I can no longer afford to put money in both my 401K and my Roth IRA due to
medical expenses for my wife. My 401K has absolutely no match from the
company. Would it make more sense to stop the 401K contributions and just
put what I can into my Roth IRA?

Thanks for your advice and comments.

Injun Joe
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