Steve Weisman - The Truth About Personal Finance (Collection)

To laugh often and love much.. to appreciate beauty, to find the best in others, to give ones self... this is to have succeeded.
Ralph Waldo Emerson

This book is dedicated to my wife Carole, without whom there would be no success.

Im here from the government, and I am here to help you. For some people that phrase instills confidence that the government of the people, for the people, and by the people has come to the rescue of its citizenry and will be providing assistance in some important matter. For other people that phrase instills a fear that when the government gets involved, things tend to get overly complicated and complex. When it comes to retirement planning, both mindsets are right.

Although sometimes it may seem like the purpose of tax laws is to merely take as much of our hard earned money as possible, tax laws are also written to encourage certain activities and discourage others. The tax deduction for mortgage interest is an example of Congress attempt to encourage and facilitate home ownership. And so it is with retirement planning.

In an effort to encourage us to save for our own retirement rather than be dependent upon the government and programs like Social Security, Congress has passed laws providing opportunities for us to save for our own retirement while also reducing our income tax burdena definite win-win situation for us. Perhaps the most popular and most effective ways of saving for your retirement are through IRAs and 401(k)s. More than 3 trillion dollars are invested in IRAs while 401(k)s hold investments worth another 3 trillion dollars.

When it comes to planning for your retirement, IRAs and 401(k)s offer tremendous opportunities, but also pitfalls and traps for the unwary. As with any government-created program, there is a veritable avalanche of rules that can be viewed by pessimists as being stifling complications filled with financial danger. To the optimist, however, these rules provide opportunities for you to adopt IRA and 401(k) strategies specifically tailored to yours and your familys needsnot just for now, but for the next generation.

That is where this book comes in. This book may not turn you into an optimist if that is not your predisposition, but it will provide you with the truth about all the ins and outs, the regulations, and the loopholes involved with IRAs and 401(k)s. It will help you identify both the pitfalls and the opportunities. It will help you help yourself toward a secure retirement.

The question isnt at what age I want to retire, its at what income. George Foreman

Although it may seem like the purpose of tax laws is merely to confiscate as much of our money as possible, tax laws are written by legislators to encourage and discourage particular activities. The tax deduction for mortgage interest is an example of Congress attempt to encourage and facilitate homeownership. And so it is with retirement planning.

In an effort to encourage us to save for our own retirement rather than depend on the government and programs like Social Security, Congress has passed laws providing opportunities for us to save for our own retirement in a tax-advantaged way. Perhaps the two best ways to do this for most people are the IRA and the 401(k). When it comes to retirement planning, the IRA offers tremendous opportunities. As always, there is a veritable avalanche of rules that can be viewed by pessimists as stifling complications. However, to the optimist, these rules present opportunities to help you adapt an IRA strategy that will work best for you and your family.

When it comes to retirement planning, the IRA offers tremendous opportunities.

IRA is an acronym for Individual Retirement Account. It comes in the form of the traditional IRA (if anything that has only been around since 1974 can be referred to as traditional) and the Roth IRA, named after its primary Congressional proponent, Delaware Senator William Roth. The traditional IRA was originally intended to provide a means for people who were not covered by company pensions to be able to save for their own retirement in a tax-advantaged manner. In 1981, Congress broadened the availability of IRAs to all workers regardless of whether they were covered by a company pension.

The Roth IRA became law in 1997. Two years prior to its enactment, a similar proposal entitled the American Dream Savings Account was passed by Congress but vetoed by then-President Clinton. Apparently, they did not share the same dream. The Roth IRA was the crowning achievement of the legislative career of Senator William Roth, who a scant three years after the passage of the legislation was sent into his own retirement when he lost his bid for reelection to the Senate.