Taking Time by Rebecca Escott The Roth IRA: Is It For Me? The stock market has been tur bulent in recent weeks, and many people are wondering how all this will affect their investments and retirement accounts. It may have you thinking about your options for saving for your future. The Roth IRA is a new invest ment tool, created by the federal government this year. Its features differ from traditional IRAs in se veral ways, making it attractive to a different group of investors. According to Natalie Choate, attorney with Bingham, Dana, L.LP. in Boston, in “An Introduc tion to Roth IRAs,” “The basic idea of this new breed of IRA is that contributions are nondeducti ble, but ‘qualified distributions’ are tax free... The Roth IRA of fers other benefits: no minimum required distributions during life; no maximum age for making con tributions; and even a favorable rule for tax treatment of ‘non- P Great Plains NO-TILL DRILLS • Utilizes proven coulter/opener no-till system. • Compact, well-balanced design transports easily. • Heavy-duty coulters cut through tough ground and heavy residue. • Dry fertilizer, small seeds, and and fluffy seed box options. • Lock-out hubs disengage drives for transport. The proven Great Plains no-till system utilizes a coulter to prepare a mini-conventional seedbed for the openers to place the seed ...at the precise depth selected. See The Dependable Great Plains Dealers Listed Below: C.B. Hoober & Son, Inc. Old Philadelphia Pike, Intercourse, PA 17534 717-768-8231 Hines Equipment Rt. 28 West, Cresson, PA 16630 814-886-4183 and Rt. 220, Belwood, PA 814-742-8171 qualified’ distributions.” The Roth IRA is available to single taxpayers whose adjusted gross income (AGI) is below $95,000; to married taxpayers fil ing a joint return with an AGI be low $150,000. A married indivi dual filing a separate return is not eligible for this IRA. Some finan cial advisers suggest that indivi duals making less than $40,000 and couples making less than $60,000 are often better off choos ing a traditional IRA because they usually will need their retirment plan earnings within a few years of retirement and will be in a low tax bracket in their retirement years. Families may choose to roll over funds from a traditional IRA into a Roth IRA or they may make new contributions up to $2,000 annually. In order to get the tax free earnings, these funds must re main untouched in the account for five years. Laura Sanders, Forbes 10 ft. & 12 ft. magazine, says, “The longer you can afford to let the account grow until you draw on it, the greater the advantage of being in a Roth.” This IRA is only available to people who are working. Retirees who receive no “compensation in come’’ cannot contribute to this. They may be able to roll over other IRA funds in to a conversion Roth IRA. One special rule exists in 1998 only: If a person decides to transfer funds from a traditional IRA to a Roth IRA, the income that he will have to pay tax on will be spread out over the next four years. He is, therefore, less likely to be bumped into an extremely high tax bracket during the year of the transfer. After 1998, this advantage won’t exist Any individual con verting after this year will need to pay taxes on the entire balance of the account as if it were income earned that year. What individuals might want to choose a Roth IRA over a tradi tional IRA? An investor who: • is over 70 years old and wants to keep making tax-free invest ments or doesn’t need income dis tributions that he would be re quired to take from a traditional IRA. • expects to live a long time in retirement and wants to stretch his distributions out over more years rather than taking out large amounts beginning at age 70. • is looking for alternative, cleaner ways to pass assets on to beneficiaries in an estate plan. £ We lead because we listen. D & E Equipment 307 Edgar Avenue, Bloomsburg, PA 17815 717-784-5217 Carlisle Farm Service 260 York Road, Carlisle, PA 17013 800-447-6829 Lone Maple Sales & Service RD #2, New Alexandria, PA 412-668-7172 The Most Comprehensive Set of Time-Proven INo-Till Drill Features In The Business Great Plains Lancaster Farming, Saturday, September 26. 1998-811 • has a current tax bracket that is fairly similar to the one he will be in during his retirement years. • has many years to invest iii the IRA before retiring and is in an average tax bracket • wants to accumulate addition al retirement savings but is ineligi ble for the traditional IRA because he already participates in an employee-sponsored retirement fund. • wants to purchase a first home, five years in the future. He may withdraw up to $lO,OOO from a Roth IRA, penalty free for a down payment on a first home if the account is more than five years old. No matter whay type of IRA plan you choose, it’s important to investigate the company and in vestment history of the particular investment Just like any mutual funds, company stocks, or annui ties, IRA plans can vary in the amount of returns they generate for your investment Research the Is Fabric Spotting Your Clothes? Liquid softener should be thor oughly mixed with water before putting it into the washer or use the fabric softener dispenser in your washer which automatically combines it with water. Fabric softener dryer sheets should be placed on top of the wet Chambersburg Farm Service 975 South Main Street, Chambersburg, PA 17201 717-264-3533 C. B. Hoober & Sons, Inc. McAlisterville, PA 17049 717-463-2191 Lehigh Ag Equipment, Inc. 6670 Rubpsville Road , Allentown, PA 18106 610-398-2553 company and choose wisely. If you’d like to do more re search on the Roth IRA as an investment tool, check out the Internet site <http://wwwjothira. com>. This site has excellent background information, links to news magazine articles, personal calculators, and other expert ad vice. If you are struggling to find money to put in a retirement ac count, you may be interested in a bee program offered by Coopera tive Extension called Money 2000. This program which in cludes free newsletters filled with money-saving ideas is designed to help people reduce their family debts or increase their savings. Each family that enrolls will set a personal goal one suggested goal is to save $2,000 by the end of the year 2000. That may end up being your first contribution to an IRA. Contact your local Coopera tive Extension Office for more in formation on this program. Softener clothes and tumbled immediately. Microfiber and satin type ma terials are very susceptible to softener staining in the dryer. If this happens, wet the fabrice and rub the spot with bar soap (such as ivory) and relaunder. Inquire About Great Plains Acceptance Corp. FINANCE Programs
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