Brockett’s Ag Advice K| yl By John E. Brockett V Farm Management Agent Lewistown Extension Office One question 1 get a lot around income tax time is “Should I take out an IRA or Keogh?’’ Income tax is too late to take out a new Keogh. Other than that, however, the answer to that question is always the same: It depends on your age, debt structure, plans for the future of your business, and level of in come. Remember the money is tied up until you are 59.5 years old unless you are willing to pay a sizable penalty. The penalty may go up under the new tax bill. Here are some guidelines; Consider a retirement account if: • You are 45 or older and have taxable income of more than $15,000 after all deductions and exemptions. • You have few or no debts and few if any places to invest the money in your own operation. • You are willing to tie up the money until you are 59.5 years of age. • You feel income at retirement will be considerably less than now. You may not want to open a retirement account at this time if; • You are under 35. • You have quite a few debts and/or have a desire to expand in the future. • You can think of other pressing needs for the money. • You do not have taxable in come in excess of $lO,OOO. Where to invest IRA Money: Most people in rural Penn sylvania invest IRA money in local bank CDs. There are a lot of ad vantages to them as an IRA fund. It is convenient. The money may be used for local uses, You can usually discuss your account with someone you know. One word of caution-make sure the bank has some form of Federal insurance. However there are other places that may have advantages. Example - most money market funds have higher yields than bank '> ;vf ' .V * Come In, Pick Your Choice And Receive "BOATLOAD PRICE" " BOATLOAD SPECIAL - One Week Only, Ends January 31st MODEL 146 2WD, 14 H.P., Auto Shift w/48” Belly Mower ONLY $3,995 “A Little Out Of The Way... But A Lot Less To Pay” CDs - bond funds have higher yields and can increase in value - government security funds are probably tops in security - Zero coupoh Treasury bonds have high yields (10 year bonds are around 9.5% now) and great security - growth funds in today’s market are having tremendous increases in value due to increased stock prices. Most no load mutual fund companies have several types of funds. You can switch from one fund to another as the economy changes. There are, of course, disad vantages to these alternatives. All bonds and stocks including the bond and stock funds can sell at prices under their purchase price. To properly use the switching option for mutual funds means extra work and often some fees, even with a no load fund. IRA income received after retirement is all taxable as regular income even if part of it was from capital gains. Most IRAs in funds require more effort on your part than do CDs. They also are subject to load and/or management fees that may company - What load charges do reduce the net income to a point they have if it is a load fund (load below that received from CDs in means up front charges that come the early years. "off the investment). - What If convenience is the primary management fees are charged and desire, I’d suggest sticking to local when are they charged? CDs. If yield with safety is the IRA Rollovers primary concern, you may want to It is fairly simple to rollover an look into one of the governments IRA. You have 60 days to reinvest security funds or CDs from a ' the money once you have taken it lafrger bank. If you do not mind out of your present IRA. Some taking some risk to maximize your companies will help you make this potential yield, you could consider switch. Of course the easiest a good mutual fund. If you do not switch will be within a fund mind the extra work, use a good no company’s family of funds. You load fund so you save that load will receive a 1099 (and so will the charge each time you invest in it. If IRS) wheiurou take the money out you need some help in filling out of one company to put it in another, forms, use load funds. In either Therefore if you make a switch, case, look into several companies - you should inform the IRS that you - What types of funds does the have rolled it ihto another IRA company carry so you can see the investment at the time you file potential flexibility for switching your tax return. Report what in among different funds within the vestment and when you did it. :■ ft* -'■•at li Coiatog HWfc MaoHm :'-. ■ __•" BvAfWAD SALE of YANMAU DIESB. TRACTORS ■■ tlt'JP' h - 1 Buy A Yonmar Tractor Right Off The Boat! C 4 ■ , ; *t,*S'yK'** “ ’•v, * /v- *s'W> , «■ **%'jssu& . tA* .'3t“ ** 4.f *"• A %■ \ Don 't Miss The Boat I "SERVICE 1$ om MOTTO " I.AW\ TARF OF PA AWJTm mmjLm JTv£m« BALTIMORE - Hugh Dailey, a member of the Board of Directors of the Farm Credit Banks of Baltimore, has been named Vice- Chairman of the Board of Direc tors of the Tarm Credit Cor poration of America. Dailey, a resident of Winchester, Virginia, owns and operates a 500- acre livestock farm with brood cows, feeder cattle and sheep. A graduate of Virginia Tech, he has served on the Board of the Farm Credit Banks of Baltimore since 1974. His affiliations include: Central Valley FLBA and PCA, Northern Virginia Livestock Producers, Frederick Farm Bureau, Southern States Win chester Cooperative, First Presbyterian Church and the Finance Committee of Frederick County. The Farm Credit Corporation of America is a wholly Farm Credit System owned service corporation under Title IV of the Farm Credit Act. It is the brain-child of system strategic planning efforts and was chartered on July 8, 1985. This Corporation provides a means of ongoing and unified planning, for establishing common goals in credit and financial areas and to speed decision making on System wide issues in a rapidly changing <v"* . S V> . _ S'** Daily named to board farm financial environment. f urmifs and their cooperatives. The Farm Credit Banks of The 2nd District (Baltimore) Baltimore, the area’s largest serves the state of Maryland, leading agricultural lender, ex- Delaware, Virginia, West Virginia tends long and short-term credit to an d Pennsylvania and the Com monwealth of Puerto Rico. 40* The Farm Credit System Ihpr Ron Watson, left, of Plant Food Products, Inc. in Hopewell, Virginia, is awarded a 1986 Honda Fourtrax 250 by Glen Kitson, regional sales manager, Allied Corporation, at the National Fertilizer Solutions Association Convention held in Las Vegas December 9 through 11, 1985. Allied, manufac turer of Sulf-N 45 ammonium sulfate fertilizer, sponsored the drawing at the national trade show. Lancaster Farming Saturday, January 25,1986-D9 Allied holds drawing Farm Credit News UL_ Most Models On Display HOURS; Mon., Thurs., Fr 8 AM-8 PM TueS. & Wed. SAM -5:88 PM Sat. 8 AM-2 PM * 1 **
Significant historical Pennsylvania newspapers