Why are more businesses offering
Roth 401(k)s?
Simply put, more firms are recognizing their advantages – especially when it comes to the retirement planning of professionals, business owners and executives. Your company may offer a Roth 401k option that allows you to contribute after tax dollars that will potentially grow tax-free! If you are a business owner, you may have the flexibility to set up a Roth 401(k) for you and your employees.
Here are six reasons to consider a Roth 401k
1. Tax-free growth. Roth 401(k) assets grow without being taxed, as employee contributions are made with after-tax dollars. When you withdraw the money in retirement, you don’t pay taxes on it – provided you’ve owned the account for 5+ years and are 59½ or older when you start withdrawing. With this tax-free growth, a Roth 401(k) can help professionals, business owners and executives save more to get their retirement planning back on track.
2. No income limitations. Income limits prevent high-salaried individuals from having a Roth IRA. There are no income barriers preventing you from having a Roth 401(k).
3. No required withdrawals. You don’t have to withdraw money from a Roth 401(k) at age 70½, unlike with a traditional 401(k).
READ ALL SIX REASONS HERE
2010 Provides a unique opportunity for IRA owners.
In 2010, you have the opportunity to convert your traditional IRA to a Roth IRA. The usual income limitations that stand in the way for converting will not apply. So, should you convert? Let’s look at why this may or may not be a good idea.
Here’s why a Roth IRA conversion may make sense for you
Consider this: a Roth IRA allows tax-free growth and tax-free income distributions at age 59½ or older and as long as you have held your Roth account for 5 years or longer. While your contributions to a Roth IRA do not allow a tax-deduction, the younger you are, the longer time frame you have for tax-free growth.
Now realize converting to a Roth IRA comes with a price tag. You will have to pay ordinary income taxes on the amount you convert. Whatever amount is converted is added to your income for the year. However, there may be a silver lining: With the market being down, most likely your account value may be the lowest it has been in years. This means by converting now you may pay lower taxes.
It is also worth noting that with all of the reckless government spending, there is a great chance that tax rates could increase in the years ahead. This is another reason why now may be as good time as ever to convert. If converting may send you into a higher tax bracket, you could consider doing a partial conversion (only converting a portion of your Traditional IRA to avoid going into the next bracket).
Even if you are older, a Roth still may make sense. Normally with an IRA, at age 70 ½ you are required to withdraw from your IRA through mandatory required distributions. However, with a Roth, there is no mandatory withdrawal rule allowing you more time to accumulate tax-free. Also, under the present tax laws, converting a traditional IRA to a Roth can lower the size of your taxable estate. This type of prudent estate planning could allow for decades of tax-free growth for those converted assets.
A few additional estate planning points: If you name your spouse as the beneficiary of your Roth IRA, your spouse can treat the inherited IRA as his or her own after you die and forego withdrawals. This allows those Roth IRA assets to keep compounding untaxed across the rest of your spouse’s lifetime.
READ MORE HERE
How do you find more money to invest? For most people there are two solutions: you either grow your income or reduce your expenses. Aside from inheriting or coming into additional money or selling something, there really is no other way. One thing to keep in mind is that your income can grow only to the extent that you do. If you are not constantly improving yourself and your skills, you will find it difficult to increase your income.
Think big! You will be paid in direct proportion to the value you deliver to your company. Focus on opportunities and go beyond your job description. Making a higher income is often correlated to the level of commitment you have toward your job. If you love what you do, it is easier to be successful. If you have others around you who are successful, learn from them. Partner and mentor with someone wealthier and more successful than you. Leaders earn a heck of a lot more than followers.
You are bigger than your problems. Grow yourself above your problems. Grow beyond your internal ceiling. Get paid based on results. Earn what you’re worth. Focus more on your net worth than your income. Even if you are not earning much now, manage money well. Until you show you can handle what you’ve got, you won’t get any more. Develop good money-management habits and save money to invest. Good money-management skills are more important than the amount of money you have.
There are people who always seem to live crisis to crisis. They tend to also live paycheck to paycheck. Do you see where I am going with this? They end up digging themselves a pretty deep hole. They find a way out, and then boom!–they are back in the hole. Crisis after crisis tends to drain all they’ve saved or, worse, max out the credit cards. Like a rat trapped on a wheel, the cycle continues. A new perspective and a new set of rules are required to break the cycle.
READ MORE HERE
Do you play the blame game?
“A good leader is a person who takes a little more than his share of the blame and a little less than his share of the credit.” –John C. Maxwell
Why are people so quick to blame others or circumstances for their problems? Often I see people who are quick to point the finger and it rarely points back at them. Choices are made each day, and these choices have consequences. When the results come in less than favorable, somehow it is easier to push the blame toward someone or something else. This is especially true with finances. One example: Most Americans used to be able to rely on three income sources for retirement–the company pension, Social Security, and personal savings. As the futures of company pensions and Social Security hang in the balance, the pressure builds for you to save on your own for retirement. If you do not have enough income when you retire, whom will you blame: your employer, the government, or will you accept responsibility? The natural inclination of many people is to pass the blame.
You know you are not accepting personal responsibility if you blame other people for your financial problems. I see many people pass the blame whenever they are faced with difficulties. It wasn’t the credit card company’s fault you maxed the card out. It wasn’t the bank’s fault you defaulted on your mortgage. It wasn’t your employer’s fault you didn’t save enough for retirement. These life situations, hardships, character flaws, or whatever else you want to call them begin with you. Rather than agreeing that the common denominator in all your problems is you, will you continue to blame others?
READ MORE HERE
Setting up a financial plan that incorporates your faith involves four important steps. I will show you how to create a financial plan that adds more meaning to your life, helps you clarify your purpose, and helps you take steps in the right direction. Where there is a will, there is a way. Here are the four steps we will cover:
- Set financial goals.
- Prioritize your financial goals.
- Take a financial inventory.
- Set your plan in motion.
Step One: Set Financial Goals
Your goals should be based on needs rather than just wants. You may sometimes allow greedy intentions to get the best of you. When you learn contentment, you often begin to set goals that focus on your greatest needs rather than selfish desires. With financial freedom being a goal of many, setting proper financial goals will help you move in that direction.
Setting goals is a very important part of life in general and of financial planning in particular. Before you actually invest your money, you should spend some time considering and setting your personal financial goals. For example, do you want to retire early? Would you like to start your own business soon? Do you need to pay for your children’s college educations? Would you like to buy or build a new house? Would you like to fund a ministry project or help a worthy cause?
In addition to these, there are several other questions you should consider to develop an appropriate financial plan. First, what is your time horizon for your goals? Second, what is your investment risk tolerance? Third, what are your liquidity needs? Finally, what are the most appropriate investments to help you achieve your goals?
READ MORE
What is Your Purpose?
Money without purpose is just money. However, money with a purpose can be used to change the world. It feeds the poor, builds shelters, and changes lives and souls for the kingdom of God. Money with a godly purpose can be revolutionary.
If you desire money solely for material things, you will never be content. Many of the happiest and most successful people in the world have found their purpose in life. They know exactly what money can do to help their families and help others. If you had more money what would you do with it? Who would you help? What would your days, weeks, and months look like? Unless you can envision how you will use money to better the lives of others, no amount of money will fill you up. It is only Christ’s love that fills the void in your life. As you grow closer to Him, He will help you find your purpose–your unique calling.
Matt Bell is a friend of mine. In his first book, Money, Purpose, Joy, Matt talks about ways to find more purpose with your money. Early in his life Matt thought he had found his purpose. Out of the blue he inherited $60,000 from an uncle. He knew he wanted to do something noble with the money and decided to start a business.
READ MORE HERE
http://www.lukascoaching.com/radio.htm
The show will be live tomorrow Saturday May 23rd from 9am EST- 10am EST
To listen live and ask a question go to:
http://www.lukascoaching.com/radio.htm
