September 2006
Monthly Archive
Outline to Retirement: Step Three - Roth IRA (continued…)
Posted by miller on 30 Sep 2006 | Tagged as: Retirement
Having looked at some of the defining differences between IRAs and 401Ks, let’s now compare Roth IRAs to traditional IRAs. In a Roth IRA, your investments grow tax free and all withdrawls are tax free. For a traditional deductible IRA (assuming your AGI is uner 50k), your investments grow tax free, your initial investments are tax-deductible, however your withdrawls are taxed. Without going into details, this means a traditional tax deductible IRA is better if you are in a higher tax bracket now than in retirement. Conversely, a Roth IRA is better if you are in a lower tax bracket now than in retirement. If you are in the same tax bracket now and in retirement, the outcome is exactly the same! I, for one, find it very hard to accurately predict my tax bracket during retirement. Therefore, I am going to ignore that fold in the difference between a traditional and Roth IRA. But there are other key differences.
Outline to Retirement: Step Three - Roth IRA
Posted by miller on 30 Sep 2006 | Tagged as: Retirement
This is step three in my basic outline to retirement.
We’ve already gotten the critical basics out of the way by claiming that company match (free money!) and paying down that retirement-killing debt. Now, we find ourselves with a more complicated decision of where to put our retirement money. The pro’s and con’s of the different choices have become more subtle. However, for most situations, I suggest creating a Roth IRA.
How Do Those Online Loan/Debt Calculators Work?
Posted by miller on 16 Sep 2006 | Tagged as: Personal Finance
Ever used an online mortgage calculator? I know I have. How about a loan calculator or a debt calculator? Ever wonder how those little magic java scripts come up with those numbers? Well I certainly did. As it turns out, all those different loan calculators are fundamentally the same thing. Thanks to a good dose my engineering background and nerdy side, I decided to show exactly how those caclucators come up with those numbers.
Being Cheap Versus Being Stingy
Posted by miller on 06 Sep 2006 | Tagged as: Philosophy
People who are obsessed with money are commonly stereotyped as being cheap. And while I don’t consider myself obsessed with money, I cannot deny the fact that I find it interesting and devote a fair amount of my life thinking about it. But I certainly will deny anyone calling me cheap. See… I consider myself stingy, but definitely not cheap.
Outline to Retirement: Step Two - Down with High Rate Debt!
Posted by miller on 06 Sep 2006 | Tagged as: Retirement
This is step two of my basic outline to retirement.
So in step one, we got our free money from our company’s 401K match. Now, we already have a little bit of money in retirement. In fact, we’ve already gotten huge returns on that money due to the company match! We’re feeling good. But, we must be careful to not get ahead of ourselves!
Personal financers everywhere universally agree that high rate debt is the biggest road block to our financial futures. Continue Reading »
Outline to Retirement: Step One - 401K Company Match
Posted by miller on 05 Sep 2006 | Tagged as: Retirement
This is the first step in my basic outline to retirement.
If your company offers any 401K match, this is the first place you should put your money. This basically free money – an instant 100% return (assuming one to one matching). This is the equivalent of finding a pot of gold, which is exactly why people loved 401Ks when they first became popular.
