Bf-Lancaster Farming, Saturday, January 17, 1998 By now you've almost certainly received in the mail your annual greetings from the IRS. But other things do change. Among them are the rules that relate to the traditional individual retire ment account (IRA) and the new Roth IRA. This can make it con fusing to decide if you want to leave your retirement funds in your current IRA or to convert them to a Roth IRA. As is so often the case, the answer to whether to convert or not to convert is "it depends". The important variables include your assumptions as to whether your marginal tax bracket at retirement will be Medium Duty RB7OO 6 ft., 7 ft. & 8 ft. Models Also Available... WOODS Light Duty Blades in 6 & 7 Ft. Models WOODS Heavy Duty Blades in 8, 9 & 10 Ft. Models SNOWBLOWERS Many Models Available 52” Cutting Width to 108” Cutting Width. Single and Double Feeder Augers and 3 Blade Blower Fans. 200 Degree Chute Rotation with Optional Hydraulic Chute Rotation. All Have PTC Shaft With Shear Pin Protection WOODS - Dual WOODS - GANNON WOODS - GILL come in for a demonstration R.S. HOLLINGER & SON, INC. Mountville, PA 717-285-4538 PIPERSVILLE GARDEN CENTER Pipersville, PA 215-766-0414 LINCOLN SUPPLY & EQUIPMENT CO. REIFF FARM SERVICE Somerset, PA Shippensburg, PA 814-443-1691 717-532-8601 lower, the same, or higl your present marginal tax bracket. And who knows what the tax brackets will be at the time you retire? Other consider ations are the length of time until withdrawal and what funds you will use to pay the taxes on the amount withdrawn. The Roth IRA came into exis tence as a result of the Taxpayer Relief Act of 1997. Your contri butions to a Roth IRA are not deductible, but the earnings grow tax free, and, furthermore, are not taxed at the time of withdrawal after age 59 1/2 pro viding the account is held for five years. This differs from the traditional IRA for which contri- -WOODS WOODS REAR SCRAPER READER WOODS WOODS NORMAN D. CLARK ECKROTH BROS. & SONS FARM EQUIPMENT Main Street, P O Box 27, New Rlnggoldi PA 717-943-2131 717-734-3682 , Orefield, PA 610-366-2095 MESSICKS Elizabethtown, Pa 717-367-1319 Abbotfstown, PA 717-259-6617 butions are deductible if the tax payer is not an active partici pant in an employer-sponsored plan and who meet-the adjusted gross income (AGI) limits ($30,000 to $40,000 for single fil ers and $50,000 to $65,000 for joint filers.) Unlike the traditional IRA, contributions can be made at any age to the Roth IRA. But like the traditional IRA, eligibil ity is limited to individuals with AGI under $95,000 and to mar ried couples with AGI, under $150,000 and is phased out for incomes above these limits. The maximum contribution to either type of IRA is $2,000 or 100% of earned income, whichever is less. So what should you do? Because earnings on the Roth IRA are non-taxable, it will almost always be the better choice for younger persons open ing an IRA for the first time. If you're very close to retirement, because of the tax costs, it is probably not worth converting a traditional IRA to a Roth IRA. For those in between, you will need to do some figuring. The Roth is also the best choice if you assume that your / me LOADERS mn 7 Models to choose from. Whether your tractor has two wheel or four wheel drive and falls within the 11 to 200 HP range Woods has a DUAL loader to fit your needs. Fast-D-Tach attaches to your tractor in minutes. Available in tractor matching colors EQUIPMENT CO Frederick, MD 301-473-4250 Westminster, MD 410-848-4585 D.W. OGG marginal tax bracket will be the same or higher at the time of withdrawal. If you anticipate that you will be in a lower tax bracket after retirement, you are better off not converting to a Roth. If you would have to use funds from your current IRA or borrow money to pay the taxes due upon conversion of the IRA, you should leave it alone. An additional concern is whether your ROTH IRA is pro tected against claims of credi tors or in bankruptcy. Although ordinary IRAs are protected, Roth IRAs are not protected in all states at this time, although this will likely change. No matter which type you chose or how much you invest each year, the benefits are greater the earlier you start. To reach a stated goal by retire- The Stihl Wood Boss® Chain Saw Series • Models 021, 023 and 025 • Designed for firewood cutters '• Anti-vibration system reduces* fatigife • Excellent power-to-weight ratio • Stihl dependability from turf to treetop • Made in the USA STIHL > Number One Worldwide smUbJJI ’ Available at these servicing dealers 7 ai iwn Hi MESSICK’S RD «1 Box 255 A 717-259-6617 Allentown LEHIGH AG EQ. INC. 6670 Ruppsvllle Rd 610-396-2653 1-600-779-3618 Carlisle TRI-BORO CONSTRUCTION SUPPLIES 1490 RITNER HWY. 1-600-246-6590 Pallwtown ' TRI-BORO CONCRETE, INC. 435 LocuM St. 717-246-3095 1-600-632-9018 East Earl GOODS LAWN & GARDEN CENTER Route 23 717-354-4026 Ext. 34 Elizabethtown MESSICK'S Rhwmt Exit-Rt 213 717-367-1319,717-653-8867 Epbrala WES STAUFFER ENGINES & EQUIPMENT 23 Plaatant Valley Rd. 717-738-4215 HOLLINGER’S LAWN & ment at an investment return of 10% annually, the amount of savings required on a monthly basis triples for each 10 years you wait. For example, to have one million dollars at age 55, you need to save $263.39 per month starting at age 20. If you wait until age 30, you must save $753.67 per month. But if you wait until age 40, the monthly savings required is $2,412.72. No matter what your goal or planned retirement age, start ing early is a critical factor. If you're feeling a bit bewil dered by all the choices and con siderations, you are not alone. Before opening or converting an existing IRA you should become familiar with all the eligibility requirements, contribution lim its, tax treatment of contribu tions, earnings, and with drawals. HUMMEL’S TEXACO RL 11 *l5 717-743-7459 Jonestown BLUE MOUNTAIN ENTERPRISES, INC. Rt. 72 South 717-865-2994 BOMBERGER’S LAWN & GARDEN LltlU: 717-626-3301 Lebanon; 717-272-4155 GUTSHALLS INC. Loytvillo - PA - Cartlslo 717-789-4343 717-249-2313 McAHstervllle C.B. HOOBER & SON 717-463-2191 Oxford DEER CREEK EQUIPMENT, INC. 6800 UmHtoiw Rd 610-932-9858 Palmyra HERR’S REPAIR SHOP RD 2, Box 115 A 717-638-1549 Palmyra WEAVER'S LAWN & GARDEN s^n Reamstown EAGLE RENTAL CENTER Rt 272, H—mrtown Traffic Light 717-336-3945 Ronks A & B SALES & SERVICE 370 Nawport Road 2 Milas South of Rt 23 Along 772 Thru Montaray iwn MARTIN’S EQUIPMENT CO. Rt. SOIII/2 MHaa South o« Sehsatfarstown. PA 717-949-6817 Shartlesvllle MOUNTAIN VIEW SUPPLY, INC. (Formally ShartlaavlU* Farm Sarvica) P.O. Boa S2S 610-488-1025 Shlppensburg LEINBACH FARM EQUIP. 1120 Rltnar Hwy. 717-532-5511 Tamaaua CHARLES s. SNYDER, INC. rd 3 „ 717-386-5945 Hagerstown. MB EBY’S LAWN 4 GARDEN 16409 Falrvlaw Road
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