Friday, February 19, 2010

Living The Dream


I've been posting a weekly blog now for just about a year and have covered financial topics with universal appeal.

This week, I'll try something a little different. I'll briefly discuss myself! Believe it or not, I do follow my own financial advice!

Having just returned from skiing in Winter Park, Colorado, I can truly say, life is good! It's amazing how vacations allow you to relax, reflect and simply enjoy life.

Having essentially been born on skis, I've had the good fortunate of skiing most of my life. My travels have taken me to several continents and most of our beautiful western mountain ranges... Rockies, Wasatch, Sierra Nevadas & Grand Tetons.

The humbling nature of the mountains is something I yearn for every year. So, my annual ski pilgrimage is part of my budget. The down time is always enjoyable & holistic in nature. It allows me to cleanse my soul and refocus my energy.

Personally, I'd love to take more than one ski vacation each year. The balancing act though of living in the present and planning for the future takes priority. So, with other goals to consider; retirement planning being one... one ski vacation per year will have to suffice.

To my friends Anthony & Sal who have shared many a journey with me, until next year... "The Dream Lives on!"


Monday, February 1, 2010

Roth IRA Conversions 2010


The income limitations and filing status requirements for Roth IRA conversions are eliminated in 2010. This is great news for many investors. However, before converting your Traditional IRA account, make sure the option is right for you!

Because there is no 'one size fits all' analysis, everyone should consider their personal goals, financial situation and tax bracket.

Here are a few reasons to consider a conversion:

* Long time frame before needing the money.

* Able to pay the tax with funds outside the IRA.

* Expect to be in a higher tax bracket in the future.

*Want to have both tax-free and tax-deferred funds for retirement needs.

*Don't need the funds to live on and want to leave you beneficiaries an income-tax free inheritance.

Reasons NOT to consider conversion:

* You will need the funds now or in the future for your own retirement.

* Have no outside assets to pay the conversion tax.

*Expect to be in the same or lower tax bracket in the future.

*If charity is beneficiary, they will receive the money tax-free anyway.

*Adverse to paying taxes sooner than later.

* You don't mind if your heirs pay your taxes.

After personally analyzing several situations, there are some ideal scenarios for converting for IRA account(s).

1. Individuals who feel they will not need the money in their lifetime should seriously consider converting for estate planning purposes. Their legacy will provide tax free income benefits to their beneficiaries.

2. Individuals under the age of 35. A growth oriented portfolio after conversion is pretty much required to recoup both income taxes paid at conversion and allow for future tax free growth. Younger investors have longer time horizons and more risk tolerance to allow time to work for them.

Before doing anything, consult with your Financial Advisor to see if a Roth IRA conversion is right for you!