When is the Roth a Winner?

April 5, 2012

Our next question is from Brian – “The Roth is great, but the tax deduction I get on my traditional 401(k) is really nice too. What if I have higher income? Say I’m in the 28% bracket and have $33K of pre-tax money to put into a retirement account. With a self-employed 401(k) plan I […]

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The Kiddie Roth

April 3, 2012

The Kiddie Roth is not an official IRA term. It’s my way of highlighting one of the uses for the Roth Ira that I will call a “no-brainer.” You see, unlike the Kiddie Tax, which limits how much investment income a child can have before requiring them to pay at the parents’ rate, the Kiddie […]

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How Much to Save in a Roth Account?

March 29, 2012

Today, we have a question, and our first winner of Ed Slott’s The Retirement Savings Time Bomb. Dave asks “Is there a rule of thumb about what percentage of your savings should be in Roth accounts to minimize your lifetime tax bill (assuming rates stay the same throughout your lifetime)?” Excellent question. It’s a balancing […]

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The Roth IRA Movement

March 27, 2012

Today is a special day. It’s the ‘Grand Opening Day” for RothMania.net. I’ve already said hello and started to talk about taxes, setting up the background needed to  understand the reasoning behind the Roth decision, and today it’s time to launch. By a wonderful coincidence, over 150 Personal Finance Bloggers are joining together, led by […]

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Marginal Rates

March 26, 2012

In order to have any valuable dialog about the Roth IRA, traditional IRA or 401(k), you need a solid understanding of marginal tax rates. The tax that you pay is not a fixed percent of your income. You first get to take a deduction against income or a minimum of the standard deduction, $5,950 for […]

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Welcome to RothMania

March 25, 2012

The Roth IRA was first authorized in 1998. It offered an opportunity to do the opposite of what the Traditional IRA (TIRA) offered. As you may know, the TIRA is tax deductible , but withdrawals are taxed. The Roth is funded with after tax money, but it grows and is withdrawn with no further tax […]

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