Re: Roth IRA question

[EMAIL PROTECTED] (Ksu93dlv) writes:

> Definitely contribute as much as the law allows you to contribute to your Roth
> IRA every year. I thought it was still $3,000 this year. If it has gone up to
> $3,500 I didn't realize that. I try to plan my year in advance so I know how

It's $3000/yr for 2002, 2003, 2004.
     $4000/yr for 2005, 2006, 2007
     $5000/yr for 2008.

UNLESS YOU ARE OVER 50!
In which case, it's $3500/yr 2002-2004
                    $4500/yr 2005
                    $5000/yr 2006, 2007
                    $6000/yr 2008.

After 2008, it goes up with inflation, but only in $500
increments.
     
I'm guessing that the "over 50" means "if you turn 50
during that contribution year".

BTW, the limits are the same for "traditional" IRAs, too,
for those who do not qualify to contribute to a Roth (ie.
because they make too much money: $160,000 for married
filing jointly or $110,000 for single folks).

> you're contributing, by all means increase it. Many people
> contribute to a Roth IRA in much the same way (i.e. monthly
> contributions), but I have always just made a lump sum contribution
> to make it easier.

I prefer to make my contribution right up front at the beginning
of the year.  Get it out of the way and done with and never
think about it.

For the 401k, of course, making an up-front lump sum contribution
isn't possible, so that's done through the course of the year
via payroll deductions and, again, since it's on auto-pilot,
I never have to think about that, either (except for, every
once in a while, reviewing the asset allocation, since there
are only a limited set of funds available for this investment).

> As far as books, the two I found to be most helpful were Common
> Sense on Mutual Funds by John C. Bogle and A Random Walk Down Wall
> Street by Burton G.  Malkiel. These are not books for "aggressive"

For beginners, I'd recommend any/all of Eric Tyson's "For Dummies"
books.  Dumb titles, annoying bright yellow covers, but great
books by an excellent, clear and easy to understand author, 
including some worksheets which you may or may not find helpful.
In particular, Personal Finance for Dummies is now in its 4th
edition, which just came out a few months ago.  I haven't looked
at the new edition yet, but I'd expect that it's been updated
to take into account some of the recent things like, oh, the
increased limits on IRA contributions.


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