Roth IRAA Roth IRA allows non-deductible, after-tax contributions of up to ,000 per year. As long as you hold the IRA for at least 5 years, the distributions are tax free. In addition, you are not required to make a minimum contribution each year, and there is no age limit for additional contributions. The Tax Relief Act of 1997 created the Roth IRA. Conversions
Today on the Ilyce Glink show, we had a call about the Roth IRA conversion change for 2010. I’ve been writing about this for awhile, and basically the change boils down to the following:
If you make too much money (over $100,000/year) to convert your current IRA to a Roth IRA, those income limits disappear in 2010. So, even if you earn $1 million per year, you can convert your IRA to a Roth IRA. That’s why so many accountants and financial advisors are advising their clients who make more than the conversion income limit to make non-deductible contributions to an IRA (in a separate account), so that next year, they can convert them to a Roth IRA.
You will have to pay any taxes owed when you convert, but you can spread out the tax liability over two years. Plus, the one slightly sliver lining of the current market meltdown, is that you’re converting when the value is lower, so you’ll owe less in taxes.
I’ve written about this on my website. Check out this link.
Credit Card Legislation
Near the end of the show, we had a call from someone who doesn’t carry a balance, but has had the interestInterest is money charged for the use of borrowed funds. Usually expressed as an interest rate, it is the percentage of the total loan charged annually for the use of the funds. rate on his credit cards jacked up to 24.9 percent. What’s going on? With the new credit card legislation about to be signed (or maybe President Obama signed it this weekend), credit card companies have just a few months to figure out how they’re going to makeup nearly the $10 billion in profits they might lose under the new rules of the Credit Card Act.
One way they’re trying to add to their profits is to jack up interest rates on all cards, whether or not you carry a balance. If you don’t carry a balance, it doesn’t matter (on a practical level) what the APR is on the card.
I’ll post some of the new credit card legislation information on the site tomorrow, and we’ll talk about it tomorrow 1p to 4p when I fill in for Clark Howard.
In the meantime, check out these credit videos to find out more about how your credit history and the way you manage credit affect your credit score.
HOPE for Homeowners Hotline: 888-995-HOPE
I gave out the HOPE for homeowners hotline number on this week’s show. If you’ve been trying to do a loanA Loan is an amount of money that is lent to a borrower, who agrees to repay it plus interest. modification, and no one is calling you back, you can try calling the HOPE hotline and the housing counselors may be able to use their backdoor channel numbers to help you link into your lenderA Lender is a person, company, corporation, or entity that lends money for the purchase of real estate.’s office.
Remember, these loan modification and loan refinancing programs are voluntary. Lenders don’t have to do them, and they don’t necessarily have to do them for you. You can find out more at the MakingHomeAffordable.gov website.
Special EBook DiscountNewly-issued bonds are typically sold at some sort of Discount. So a bond that has a face value of ,000 and sells for 5 has a discount. When interest rates rise, bonds are discounted more because you need a less expensive bond to achieve the same interest rate.: Buy 2 Get 3rd FREE!
We still have our free book giveaway going on. You pay the shipping & handling, and I’ll send you an unlimited number of free copies of either (or both) of my books, 50 Simple Steps You Can Take to Disaster-Proof Your finances and/or The REALLY Useful Guide To Working Smarter Not Harder.
We introduced a new ThinkGlink store deal this weekend: Buy 2 eBooks and get the 3rd eBook FREE! Your discount code is “freeebook” (make sure you use one word, no quotes) and the price of your third ebook will be removed at checkout.
DIVORCE EBOOKS: This week, we’ll be introducing two very important divorce ebooks. In the first ebook, we’ll look at Divorce and Your Finances. The second ebook will look at Divorce and Your Real EstateReal Estate is land and anything permanently attached to it, such as buildings and improvements.. We should have both of these ebooks ready to go this week. Sign up for our newsletter (just enter your email address on any page) and you’ll be among the first to find out when they’re ready. If you want a copy of the divorce ebooks, you can email me or Sam and we’ll send you an email with a direct link to where you can buy them.
The Buy 2 Get 3rd Free discount will work with the divorce ebooks. We just want you to have the best information available.
Have a great Memorial Day Weekend, and don’t forget to tune in tomorrow when I fill in for Clark, 1p to 4p ET.