[08rookie]

my accountant told me i should set up an IRA. i manage a family business. actually own a percentage of the company. i have no retirement fund, no 401k...just base my retirement on the success of the business

any advice? if i deposit a measly 100 dollars a week into an IRA starting now what would my 30 year payout evolve into? would i better off with insurance? i have no retirement plan and i want to plan.

[matthewk]

Originally Posted by 08rookie

my accountant told me i should set up an IRA. i manage a family business. actually own a percentage of the company. i have no retirement fund, no 401k...just base my retirement on the success of the business

any advice? if i deposit a measly 100 dollars a week into an IRA starting now what would my 30 year payout evolve into? would i better off with insurance? i have no retirement plan and i want to plan.

Assuming 6.5% return you'll have $460,551.25 in 30 years.

[Freakazoid]

Originally Posted by matthewk

Assuming 6.5% return you'll have $460,551.25 in 30 years.

you'll have a hell of a time getting that return consistently.

but to the OP, yes start an IRA...like immediately.

[08rookie]

Originally Posted by Freakazoid

you'll have a hell of a time getting that return consistently.

but to the OP, yes start an IRA...like immediately.

im checking out traditional IRA vs Roth IRA...i will speak to my accountant tomorrow

[Freakazoid]

Originally Posted by 08rookie

im checking out traditional IRA vs Roth IRA...i will speak to my accountant tomorrow

basically what it comes down to between the two....is do you expect to be making more money NOW, or more money when you retire (combined with what you'd be pulling out).

Personally I'm betting I'd be making more money now, so the more tax deductions I can have now the better

[Maestro]

The question is do you want to work at your business for your entire life. Yes businesses are successful but most business owner fail to set money aside so they end up working until they die to pay their bills. If you put money in an IRA then it grows tax free and when you retire hopefully you will be in a lower tax bracket and when you pull it out, so you pay taxes at a lower rate than when it went in. The other recommendation is to max it out not put in $100 a week.

An IRA is no different than a savings account, except you can not touch the money until you retire without paying penalties and you can usually make more on your money than any savings account can offer.

[BTM]

Originally Posted by Freakazoid

basically what it comes down to between the two....is do you expect to be making more money NOW, or more money when you retire (combined with what you'd be pulling out).

Personally I'm betting I'd be making more money now, so the more tax deductions I can have now the better

And additionally, do you think taxes are going to go up, or go down. If you expect them to decrease, you will want a traditional IRA, where you put your money in tax free now, and will pay a lower tax rate upon withdrawing funds when you reach retirement age, and vice versa for a roth.

I personally have a roth IRA.

Curious as to why you think you're going to be making more now than at the end of your career. This isn't the typical pattern wages take.

[Freakazoid]

Originally Posted by BTM

And additionally, do you think taxes are going to go up, or go down. If you expect them to decrease, you will want a traditional IRA, where you put your money in tax free now, and will pay a lower tax rate upon withdrawing funds when you reach retirement age, and vice versa for a roth.

I personally have a roth IRA.

Curious as to why you think you're going to be making more now than at the end of your career. This isn't the typical pattern wages take.

good call on taxes. forgot to mention that

And I think I'll be making more than I will when I retire courtesy of the amount of jobs and hours I put in. I'm hoping to be much much more relaxed at that retiring point in my life. Way I see it is I can use the money more now than later. There also used to be those damn caps on the Roth IRA
I may end up rolling into a roth one at some point, as they've 'loosened the belt' a bit


(oh and I still am holding onto the dumbass hope that they'll absolve the income tax and instate a universal use/sales tax)

[BTM]

Roth contributions are still capped, $5k for this year. FWIW I only see us moving further away from a "fair" tax rather than towards one...

[BimmerPod]

Originally Posted by BTM

Roth contributions are still capped, $5k for this year. FWIW I only see us moving further away from a "fair" tax rather than towards one...

+1 on the future of taxation. universal health care and all these added burdens of social benefits will inevitably move our tax model closer to Europe's.

workaround for roth contributions (for now) is the traditional - roth conversion.

[Freakazoid]

Originally Posted by BTM

Roth contributions are still capped, $5k for this year. FWIW I only see us moving further away from a "fair" tax rather than towards one...

they also had an income cap if I recal correctly a few years back

[Maestro]

I do not know the specific cap on an IRA I know one exist like a 401K which is what I pay into. Yes a Roth caps at $5K a year, however it does not have mandatory age which you must start drawing it down and it has other benefits, but because of the low limit it may not be work it.

[BTM]

Originally Posted by Freakazoid

they also had an income cap if I recal correctly a few years back

Believe that's between like 10k and 170k-ish annual gross income...but yea your right. Fortunately and unfortunately, I don't have to worry about that right now