My post BK savings statagy

[NASCAR20FAN]

Here is how I'm now saving for my future.

1- between 5%-10% into my 401k
The varience is dependant on if I get OT or not.I think most of us overllok our 401k or don't pay attention to what is going on with them.

2-Purchase a $100 US Savings bond every month
Is is done through payroll deduction. A $100 bond is $50, $25 a pay gets me one a month. They just send them to me in the mail. They reach maturity in 20 years and stop earning interest in 30.

3-$10-$20 a month in to my emigrantdirect.com account.


4-$50-$100 a moth in my AG Edwars Roth IRA
Again, depending on how much OT I get. I really like this because the money I put in there is all tax deductable

[HHM]

Ok.

A quick note on 401K's, you really should only invest up to the amount your company matches as there are better vehicles to invest in.

As for the Roth IRA, you should figure out a way to contribute the Maximum yearly amount ($3,000, or whatever it is) and invest the IRA money into some decent growth mutual funds. Even if that means dumping the emigrantdirect (which is merely a 5% savings account).

Those are just my thoughts.

[NASCAR20FAN]

Ok.

A quick note on 401K's, you really should only invest up to the amount your company matches as there are better vehicles to invest in.

As for the Roth IRA, you should figure out a way to contribute the Maximum yearly amount ($3,000, or whatever it is) and invest the IRA money into some decent growth mutual funds. Even if that means dumping the emigrantdirect (which is merely a 5% savings account).

Those are just my thoughts.

1-My Company matches 10% (Not my first rodeo in this area)

2-I'm not going to put a whole lot into the IRA up front at this time. Since the IRA is money I cannot touch and I need to save for a house that ia where the emigrantdirect account comes in. Once the money I want for my house is inplace, I'll be putting more into the Roth and less into the emigrantdirect account.

3- The max is $4,000.00 if your 49 or younger.

[Grace]

You guys are talking about two different things.

NASCAR20FAN is contributing to a standard IRA which is why they get a tax benefit. HMM is talking about a Roth IRA which is funded by money contributed after taxes.

I've never heard of a company match up to 10%. That's amazing.

[NASCAR20FAN]

You guys are talking about two different things.

NASCAR20FAN is contributing to a standard IRA which is why they get a tax benefit. HMM is talking about a Roth IRA which is funded by money contributed after taxes.

I've never heard of a company match up to 10%. That's amazing.

No, I'm talking about a Roth IRA, and I work for a bank so they do match up to 10%

And you've got it backwards. The Roth is deductdble. The standard IRA is post tax money

[Grace]

I don't have it backwards. A Roth IRA is post tax money.

http://www.irs.gov/taxtopics/tc309.html

[HHM]

Grace is Right...however

There were a few years when contributions to ROTH IRA's were tax deductible under some of the Bush tax cuts, but that may have ended now. But it is contributions to Standard IRA's that are deductible during the tax year in which the contributions are made, but there is an income cap on standard IRA's (i.e. you can only qualify for a standard IRA if your income is under a certain amount) ROTH IRA's are not tax deductible during the year of contribution, but when you pull the money out of a ROTH IRA at retirement, the income is tax free (the income cap is higher than for traditional IRA's).

I think the US Savings bonds may be overly conservative however...if you are really saving for a house, I would stop doing the savings bonds contributions and put that money into a house fund...how much money can you really save for a house by contributing $20 per month to a 5.05% fund. When do you plan on buying a house?

Starting with a zero balance, depositing $20 per month at 5.05% interest (interest rate from the emigrant bank website), you will only have $503.96 after TWO years; after FIVE years, you will only have $1,361.86
Whereas, if you saved $100 per month at 5.05% interest for FIVE years, you would have $6,809.29. Which is still probably not enough, but at least you start getting into the realm of a possible down payment. $6,809.29 is 5% of $136,185.20, and I am sure somewhere in this country there is still a place where you can buy a house for around $130K.

[NASCAR20FAN]

I don't have it backwards. A Roth IRA is post tax money.

http://www.irs.gov/taxtopics/tc309.html

You can make post tax contributions, but they are tax deductable. MNost employers will not go through the trouble of doing payroll decuctions, so you put the money in post tax, but you write it off as if it were pre-tax...

[Grace]

Contributions to a Roth IRA are not tax deductible.

[HHM]

I dunno, IRS Publication 590 is pretty clear that ROTH IRA "contributions" are not tax deductible.

If your so certain Roth IRA contributions can be deducted from your taxes, can you please post your reasoning and find an IRS publication so we can all learn about this. Thank you. Perhaps there is some other mechanism for deducting the contributions that is covered in another publication?

[SinkingFast]

Contributions to Roth IRA's are made with post tax $$$'s and are not tax deductible.

The earnings on the contributions, however, are tax free. You can withdraw your contributions without tax penalty at any time. The earnings cannot be withdrawn penalty free until you reach 59.5 years of age.

[SinkingFast]

Forgot to post the website link:

http://www.rothira.com/

[HHM]

Contributions to Roth IRA's are made with post tax $$$'s and are not tax deductible.

The earnings on the contributions, however, are tax free. You can withdraw your contributions without tax penalty at any time. The earnings cannot be withdrawn penalty free until you reach 59.5 years of age.

Exactly

[HRx]

I've gone with the Roth