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Archive for April, 2013

DONE!

April 15th, 2013 at 08:53 pm

Oh my goodness, I just e-filed using turbot@x and I am DONE with my 2012 taxes. Finally. What IRA decision did I make? I know you are all waiting with bated breath for the answer. Drum roll, please...I decided to open a new Roth IRA and I contributed $5000. The main reason I choose this path was because I am getting more and more resistant to change, so I thought I'd try something new and see what happens. I have mixed feelings about the choice, but it is made and now I can assess and also move on to other matters.

Thanks to everyone who took the time to comment on both of my posts. I appreciated your ideas, suggestions and support. I learned from and was influenced by each comment. Lots to think about. I need to make thinking about retirement and other savings plus current and future planning (financial and otherwise) a priority in my life or I am going to end up in the same boat next April! Smile

Ugh. I just heard the news about the explosions at the Boston Marathon. Definitely puts everything that I'm dealing with into perspective. Frown

still haven't decided...

April 15th, 2013 at 01:26 pm

This is so embarrassing, but I still havenít decided which route to take with the IRA contribution Ė open a new Roth, lose a current tax break, but have some accessible and tax-free money available in retirement (earlier than my traditional IRA), or continue funding the traditional IRA, get the tax benefits now and deal with taxes when I start to withdraw money when Iím older (which I would have to wait until 59.5).

Thanks to everyone who weighed in. I appreciate you taking the time to share your thoughts. And extra thanks to MonkeyMama for reading and responding with your expertise during your busiest season!!

I forgot to share the third option, which is to not put any money into an IRA for 2012 (or less than $5000). I already put $17,000 through auto withdraw into my work 403b plan AND my employer added another 15% of my salary on top of that (havenít figured out the math, but maybe $7 Ė 9K?) Do I really need to put more money toward retirement for 2012? I worry that Iím over-saving and not doing enough living in the moment.

My indecision is a real problem in my life Ė but Iíll save that for another post!

I guess I will be choosing soon as time is running out! Need to take Winoís words to heart Ė just do one and live with the results. Smile

To Roth or not to Roth - that is the question

April 14th, 2013 at 03:37 am

I STILL havenít finished my taxes. Iíve done all the info entering into turbo t@x, I just canít decide if I should contribute to my existing traditional IRA, or open a new Roth IRA. Iíve recently begun thinking about possibly retiring early. I have no idea if I will be able to save enough money to do so or what age I would aim for. But, if I do, most of my money would be in retirement accounts (403b and traditional IRA) which I wouldnít be able to touch without penalty until Iím 59.5 years old. Iím wondering if I should open a Roth IRA, an account where I could withdraw my contributions (but not earnings) at any time without penalty. I recently learned that I could retire from my current place of employment at 55 (I would meet the requirements if I stay another seven years) and could then draw on my 403b without penalty. If I leave this job before 55, I couldnít touch the money without penalty until I turned 59.5.

If I open a new Roth IRA now, I would only be able to accumulate 58K plus any earnings over the next ten years. So, if retired early and started to draw on the contributions, that money really wouldnít grow much. And, there wouldnít be much in there Ė probably not even two years of living expenses. But, it would be tax free.

The hardest decision is in the moment because if I contribute $5000 to my traditional IRA for 2012, I would receive about $1218 in refunds. If I open and contribute to a Roth, I would only receive about $290 in refunds, a difference of $928. Itís hard to think of letting that money go now in order to have some tax free money available in the future. Iím thinking that I should have started a Roth IRA YEARS ago, but I really didnít think it through back then. Iím also not sure if I should convert my traditional IRA to a Roth at some point.

Ugh, I donít know what to do and I need to decide very soon! Smile I've been swallowed whole by work the last few weeks and I haven't had time to really think it through.