Identify The Right IRA - Info Ony

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Retirement & Financial Planning Report Issue: Thurs, March 2, 2006

You can contribute to an IRA for 2005, including a Roth
IRA, up until April 17, 2006. Generally, the deadline is
April 15 but that date falls on a Saturday this year. For
2005, the maximum you can contribute is $4,000 (up from
$3,000 in 2004), plus another $500 if you were at least
50 years old last year.

Often a Roth IRA will be a better choice. With a
traditional IRA, you might not get an upfront deduction.
Full deductions are available only if your income was
under $50,000 in 2005, or under $70,000 on a joint return.
What's more, all of your withdrawals will be fully taxed.
In effect, you'll be sharing any investment success with
the IRS.

With a Roth IRA, there is never an upfront deduction. All
withdrawals are tax-free, five years after you open the
account, as long as you're at least 59-1/2 years old. To
make a full Roth IRA contribution for 2005, your income
can be as much as $95,000, if you're a single filer, or
up to $150,000 on a joint return.

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Where There's A Will

You should have a will but your estate planning should not end
there. Other components to consider include:

Trusts. Putting your assets in trust will help your heirs avoid
the time and expense of probate. Assets kept in trust can provide
funds for your heirs yet prevent your survivors from squandering
their inheritance.

Powers of attorney. Such powers enable someone you name to act on
your behalf. A "durable" power will remain in effect, even if you
become incompetent.

Beneficiaries Life insurance, retirement accounts, and payable-on-
death bank accounts will go to the people you name on beneficiary
forms, without going through probate.

Health care proxy. This document authorizes someone to make medical
decisions for you, if you can't make them yourself.

Living will. This instrument states whether or not you'd want
life-sustaining efforts.

Review all of these documents every few years to make sure they're
up to date, in line with your current wishes.

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Sorry wrong Title for this. Should have came under Info Only

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Retirement & Financial Planning Report
Thursday, September 13, 2007

1. Out Of The Penalty Box

IRA distributions normally are subject to income tax plus a 10 percent
penalty before age 59 1/2. You can avoid the penalty with a series of
substantially equal payments, based on your life expectancy. If you have
a 30-year life expectancy, for example, you can take out 1/30 of your IRA
without a penalty.

Such payments do not have to continue for your entire life or life
expectancy. Instead, they must continue for at least five years or until
you reach age 59 1/2, whichever is later. Then you can stop taking any
payments or change the size of the payments without incurring a penalty.

Different methods include:

* Minimum distribution. This is a straight life expectancy approach, based
on an IRS "Uniform Lifetime Table." As indicated, this method provides
low income and keeps more money in your IRA.

* Annuitization, amortization. These are the other two approved methods.
They both assume that your IRA will grow during your life expectancy so
larger amounts can be withdrawn. Thus, they work best if you want more
money now, even if your IRA is reduced.

The amortization is easier to compute so that method is often used.
However, you don't have to do the calculation yourself: your IRA custodian
can handle the math and let you know how much you can withdraw each year,
penalty-free.

2. Conversion Factor

As of 2010, there will be no income limits for converting traditional IRAs
to Roth IRAs. The tax due on a 2010 conversion can be split between your
2011 and 2012 tax returns.

Before converting a traditional IRA to a Roth IRA, separate your IRA by
investment class. Say you now hold $200,000 in your IRA: $100,000 in stock
funds and $100,000 in bond funds.

You can transfer all the stocks to a new IRA, giving you a $100,000 stock
IRA and a $100,000 bond IRA. Suppose your stock IRA drops from $100,000
to $80,000 by 2010 while your bond IRA increases from $100,000 to $110,000.

In January 2010, you can convert your stock IRA to a Roth IRA. You'll owe
relatively little tax on an $80,000 conversion.

At the same time, you can delay your bond IRA conversion throughout 2010.
If the bond market drops, you can convert when the bond IRA is worth less
and you'll owe less tax on the conversion.

Similar tactics can be followed by dividing your portfolio into multiple
assets classes and converting each one at its low point. If any given Roth
IRA keeps dropping, you can switch back to a traditional IRA by October
15 of the following year and reclaim any income tax you've already paid.

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