I also have Roth and I think its better than traditional since after your 59.5th birthday, all withdrawals will be tax free. I got lucky this year and contributed 6K (3 for last year and 3 for this year). I have 401K through work but I decided to contribute to IRA also. Take a look at "automatic millionare" by David Bach. He shows a great chart that shows what compound interest can do to your account. Talk to your financial adivser (your banker) and see if you can get a systematic withdrawal to a set amount. Good luck!

 

[QUOTE]Originally posted by Scot
WTF.... do you eat cat food?
Yes.... so there is no tax deferal for the current year, but free gains way down the road when you take the $ out.
The king of all retirement plans is the SEP.... for the self employed (RICHARD - are you self employed???) guy they can defer their Federal taxes + the Self Employement tax (almost another 15.3%) up to 1/4 of their earnings...up to about $40k of contributions.....

so someone in a 25% tax bracket can save 43.3% (25%+15.3%) on their deductible SEP contributions.

 

I use the Roth one because I need it for my house soon.

 

[QUOTE]Originally posted by mingster

 

Scot, are you saying you cannot still make a contribution today for 2003? You mean AFTER today? (the 15th)

 

i said "You could have made your maximum $3k contribution to 2003 anytime up until today (April 15, 2004) for your 2003 tax year"

I guess to clarify I should have said "including today", but I basically assumed that kekoa wouldn't be that quick in getting all of this figured out by the end of today is why I said he waited too long..........

 

You should go to the bank at 3 pm and watch all the people try to open an IRA. It's nuts.
Thanks for clarifying. Happy 15th.

 

There are pros and cons to think about for both accounts. But a combination of the two will at least provide you with some options when you retire.

One thing to think about regarding pre-tax vs. after-tax contributions. By the time you retire with a Trad IRA, you might be in a lower tax bracket depending on the year's income level.

If you also use a ROTH, you may be paying more taxes assuming you make more money the older you get. By deferring taxes until you take it out gives you some more control on how much you'll pay in taxes at the time of retirement.

But, this perspective is from a tax saving viewpoint. There other considerations of course, depending on your retirement goals and needs.

 

If you are over 50 you can contribute $3500.

 

[hijack]are you serious? shesh... the more I learn about people the funnier it gets.... people are parked in their cars right now waiting 30 minutes to drive up to the post office to drop off their tax returns but yesterday there were no lines for anything...

or waiting until new years eve to get your booze.... huge lines.... or go the day before...no lines.... duh.

[unhijacked]

[QUOTE]Originally posted by Morris
You should go to the bank at 3 pm and watch all the people try to open an IRA.