Tuesday, April 10, 2012
You can contribute a maximum of $5,000 to a Roth IRA, and if you are over 50 years of age, $6,000 is the max.
Remember, this is after-tax money, and you will owe NO taxes on this money when you pull it out after you turn 59 1/2. Plus, you never have to take the money out if you don't want to like you have to do with a traditional IRA or a 403(b). In those two investment options, you must begin withdrawals at age 70 1/2. The money in a Roth IRA accumulates tax free, which is huge, and you can leave the money to your kids if you want.
A Roth IRA is different than a 401(k) or a 403(b) where you deposit pre-tax money and then pay income taxes when you make withdrawals after age 59 1/2.
As I'm sure you know, the Chicago Tribune, the Republicans, the turncoat Governor, and the Civic Federation of Chicago (whose members are all Chicago billionaires and millionaires like the Pritzkers) are after your pensions big time. Take it from me, your Teachers Retirement System pension is the MOST VALUABLE BENEFIT YOU HAVE.
I don't know what will happen with your pensions after the November elections, but I do know that if you have a Roth IRA and a 401(k) or 403(b) account, you will be safe when the rock falls.
These accounts are easy to open, and you can have the money transferred out of your bank account right into Fidelity or Vanguard, probably the two best companies. I have IRA's in both.
If you need any help, e-mail me at firstname.lastname@example.org
I'll be glad to help.