Money and Finance
For some unknown reason taxes and tax optimization has struck my fancy since returning back to work and blogging regularly. Today I wanted to look at some of the benefits of Roth IRA's and why I'm glad that we're finally getting to invest in them again.
Roth IRA's are a powerful tool for long term investors. The way Roth IRA's work is that you pay taxes on your income now but once you invest your savings inside a Roth IRA everything is tax free whenever you withdraw the funds. That's tax free capital gains and dividends, at least as the law is currently written. There's no immediate tax break but you reap the tax benefit later on by not paying taxes. For those seeking financial independence that's a huge boon to provide tax free income to get you through the in between years of financial independence and access to traditional retirement accounts like 401ks.
Another benefit of Roth IRA's is that you can withdraw your principal after the account has been open 5 years. That might not be the best route for long term wealth creation, but it's a nice benefit to help you through the bridge years if you just can't stand working any longer.
Read more »
- Dividend Update - January 2013
January was an okay month for dividends but still a far cry from December's personal record. I ended up having 2 companies pay in my FI portfolio and 1 in my Roth IRA. Normal January's from now on would see 3 pay outs in the FI portfolio but...
- Dividend Update - November 2012
November was a decent month for dividends with 5 companies paying out in my FI portfolio but none in my Roth IRA. This was much better than October's 3 total payouts. And December is going to be an awesome month with 12 payouts in my FI portfolio...
- Dividend Update - October 2012
October was a slow month as expected for dividend payouts with only 2 companies paying out in my FI portfolio and only 1 company paying in my Roth IRA. In my FI portfolio, my forward 12-month dividends to start the month stood at just over $930 and...
- Max Out The 401k?
Today I read a post on TheSimpleDollar about "The Different Meanings of Saving for Retirement" which really got me thinking. Since my plans are to "retire" by 40 and live off of passive income things might need to change. For 2011 I maxed out my 401k...
- Roth Ira
I originially opened a Roth IRA to invest in mutual funds through Vanguard. I got to thinking about the expense ratios, which Vanguard is usually the lowest, however by purchasing solid dividend paying companies with solid fundamentals you'll pay...
Money and Finance
Restarting the Roth IRA
For some unknown reason taxes and tax optimization has struck my fancy since returning back to work and blogging regularly. Today I wanted to look at some of the benefits of Roth IRA's and why I'm glad that we're finally getting to invest in them again.
Roth IRA's are a powerful tool for long term investors. The way Roth IRA's work is that you pay taxes on your income now but once you invest your savings inside a Roth IRA everything is tax free whenever you withdraw the funds. That's tax free capital gains and dividends, at least as the law is currently written. There's no immediate tax break but you reap the tax benefit later on by not paying taxes. For those seeking financial independence that's a huge boon to provide tax free income to get you through the in between years of financial independence and access to traditional retirement accounts like 401ks.
Another benefit of Roth IRA's is that you can withdraw your principal after the account has been open 5 years. That might not be the best route for long term wealth creation, but it's a nice benefit to help you through the bridge years if you just can't stand working any longer.
Read more »
- Dividend Update - January 2013
January was an okay month for dividends but still a far cry from December's personal record. I ended up having 2 companies pay in my FI portfolio and 1 in my Roth IRA. Normal January's from now on would see 3 pay outs in the FI portfolio but...
- Dividend Update - November 2012
November was a decent month for dividends with 5 companies paying out in my FI portfolio but none in my Roth IRA. This was much better than October's 3 total payouts. And December is going to be an awesome month with 12 payouts in my FI portfolio...
- Dividend Update - October 2012
October was a slow month as expected for dividend payouts with only 2 companies paying out in my FI portfolio and only 1 company paying in my Roth IRA. In my FI portfolio, my forward 12-month dividends to start the month stood at just over $930 and...
- Max Out The 401k?
Today I read a post on TheSimpleDollar about "The Different Meanings of Saving for Retirement" which really got me thinking. Since my plans are to "retire" by 40 and live off of passive income things might need to change. For 2011 I maxed out my 401k...
- Roth Ira
I originially opened a Roth IRA to invest in mutual funds through Vanguard. I got to thinking about the expense ratios, which Vanguard is usually the lowest, however by purchasing solid dividend paying companies with solid fundamentals you'll pay...