With a Roth IRA, you are not obligated to receive the required minimum distributions (RMD) and because of that, you could pass your Roth IRA savings to your children or even your grandchildren!

Kelley Greene posted a great article that will help you understand how this could be done.

Here’s an excerpt from her article:

“If the surviving spouse then names his or her children as equal beneficiaries of the same Roth IRA, they can indeed split it in half, and it is to their advantage to do so. Any heir other than a spouse who treats the account as his or her own had to take required distributions from a Roth IRA, starting by Dec. 31 of the year after the year of the previous owner’s death. If the children keep the account intact, and they want to stretch withdrawals across their life expectancies, they are limited to using the older child’s age. But by splitting the account, each sibling can stretch those distributions across his or her own life expectancy, Mr. Jones says. That means the younger sibling can spread those withdrawals across more years, leaving more assets in the account for a longer time and possibly reaping more tax-free earnings.”

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Time.com has published a series of 30 articles about retirement planning, I’m including an excerpt from an article that has an emphasis on those who are in their 30s…

“For one thing, you’re getting older. You’re not old by a long shot but the door is starting to close on the certainty of long-term investment gains. “The most powerful force in the universe is compound interest,” Albert Einstein famously declared. But the magic only happens through consistent saving over many, many years. Delay is costly. Consider: Had you started saving $5,000 a year in a Roth IRA at age 20 you would today be on track to accumulate $1.9 million by age 65 (assuming 8% annual returns). But now, at age 30, you need to save more than twice that amount each year ($11,200) to get the same result and if you are 40 you need to sock away $26,400 a year. The earlier you begin the less you need to save. In the example above, lifetime contributions that began at the age of 20 totaled just $225,000; at the age of 30, $392,000; and at 40, a staggering $660,000.”

Read the rest of this article and the others here.

The New Jersey’s Star-Ledger has publish an article regarding the future changes to Roth IRA rules, here’s a quote from it:

“Starting in 2010, the rules governing the conversion of a traditional IRA into a Roth IRA will allow anyone — regardless of income — to switch their existing retirement savings account.

The change in 2010 “has the potential to be a fairly big deal,” said Rande Spiegelman, vice president of financial planning at the Charles Schwab Center for Financial Research.

Depending on your financial circumstances, converting your traditional IRA to a Roth IRA might be a smart move, but consumers should do their homework first.”

You can read the rest of this story here.

The news tribune has an interesting article in Q&A format, here’s an excerpt from it:

“Q: I am very new to the game of investing. What low-priced stocks do you recommend? I’ve been lucky with a few penny stocks and want to add a little at a time. – D.M., Ontario

A: First off, stop thinking of investing as a game. Sure, it can be exciting and a lot of fun, but it’s also serious business. It’s your hard-earned money, and your retirement, that you’re “playing” with. ”

Click here to continue reading the original article.

Two of the most popular individual retirement account options are the traditional IRA and the Roth IRA.  The basis of both of these plans is to provide a secure, comfortable retirement for those eligible to open and contribute to an account.  Specific details about rules and restrictions are what set these two drastically apart from one another.  Depending on your income, tax filing status and exact plans for the future, you may find one is significantly more beneficial for you over the other.

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Many people are now recognizing the importance of planning for retirement early in life.  Whether you are young and hoping to create a secure future or you are nearing retirement age and want to give your funds a boost, opening a traditional IRA may be the right choice for you.  What you need to understand are the benefits of this kind of retirement account and whether or not your contributions to it will be tax deductible.  Like any other retirement plan, there are rules and restrictions you must be aware of before you make the decision to open one kind of account or another.

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Individual retirement accounts started gaining popularity in the 1970s.  There are two popular kinds of IRAs, one of which is a traditional retirement account.  With this kind of account, contributions you make to it are usually tax deductible depending on your income, tax-filing status and a few other factors.  As you make deposits, your money will continue to grow while you benefit from certain tax advantages like an income tax break.  However, be aware that you pay taxes on any withdrawal of funds.  One could then argue that utilizing the current tax benefits of a traditional IRA is not a way to eliminate taxes, simply postpone them.

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Opening a Roth individual retirement account, or IRA, could see an increase in popularity, experts suggest, because of the current economic environment.  Right now, income tax rates are rising, and it is because of this fact that makes a Roth IRA the top pick among many investors planning for a successful retirement.  When examining the benefits of a Roth retirement account, consider the income tax benefits at retirement, the idea that you can leave more for your posterity and that there are many estate planning advantages.

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While the law allows investors to convert a traditional IRA to a Roth, the income cut-off for that is even lower: $100,000, for single and married couples who file jointly.

Soon, though, these barriers to a Roth IRA will crumble.

Starting in 2010, the income limit on Roth conversions will disappear, providing a backdoor way for anyone who has an IRA to own a Roth.

Brokers and financial planners are eagerly informing their clients of this opportunity to shelter their retirement savings from taxes.

Many are advising their clients to put money in a non-deductible IRA now so they can convert it next year.

But converting isn’t for everyone. Reasons you shouldn’t convert your IRA to a Roth:

Continue reading this news article…

As with any retirement or investment plan, it is essential to understand the restrictions and regulations that cover it in order to make the most use out of it.  If you are looking into investing in a Roth individual retirement account, or IRA, you must be aware that there are restrictions.  It would be dishonest to say that it is far better than any other choice because there is give and take with any retirement plan.  To determine if a Roth IRA is the right plan for you, understanding the rules will help you reach an informed decision.

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