Posts Tagged ‘ira’

« Older Entries
Newer Entries »

Iron Condors When The Dust Settles

Tuesday, October 5th, 2010

I had an interesting conversation with an option trader today who is still searching for the secret to making consistent returns with option trading. He said many things that I absolutely agreed with.

He said, “Non-directional option trading doesn’t mean we can make money in any direction. It means that we make money if the underlying doesn’t move in any direction. In other words, it’s still a directional trade, sideways.” This is true, and most people advertise that it’s easy to make money with options because, regardless of direction, we can make money. This is sometimes true, but not always.

Those of you trading the strategy that most courses and books teach know exactly what I’m talking about. The Iron Condor is just as directional as most option trades, only that its direction is sideways. So if you’re trading that strategy in 2009, you probably aren’t making anything. It’s just as hard for some to predict a sideways move as it is an up or down.

I’ve heard many people’s plights over the years about losing huge chunks of their accounts trading credit spreads and condors, and it’s always the same situation… “It went really well for several months, and then I pretty much lost my whole account in one day.” I’ve heard this so many times and frankly it’s getting old.

This is precisely why I don’t teach traditional Condors and Credit Spreads. If you’re a few days from expiration, and the RUT is right at your short strike, then you are trading the way most people trade this strategy, and soon you’ll be telling the same story to your best friend, and even hiding the truth from your wife! You chuckle now, but you won’t think it’s funny once it happens to you. The worst part of this style of trading is the high stress level that could really ruin your life.

In response to this issue, San Jose Options Mentoring has rediscovered Iron Condors and Credit Spreads. We take a different approach that gives the underlying much more wiggle room, a chance to relax a little, and keep us out of troublesome situations. More often than not, the less you have to mess with your condor, the better off you will be.

So you know we have a safer way to trade Condors, but we’ve also developed great techniques to lock-in our profits on them. Normally option traders exit their trades when they make a profit, but we can lock-in our profits and stay in the trade.

Furthermore, if we ever have a Condor move against us, then we have developed a technique which gives us a free bonus trade! So, even though we may have a rough month every now and then, at least we score a free trade from it while the other guys take a hit and move on.

At the end of the day, winner or loser, we’ve got a pretty good thing going when it comes to ways to trade Iron Condors and other strategies.

Want to find out more about Trading Options, safely? Then visit San Jose Options to learn some of the lowest-risk Option Spreads ever taught anywhere.

Tags: , , , , , , ,
Posted in investing | No Comments »

How To Determine The Best Roth IRA

Tuesday, February 16th, 2010

When making decisions about your retirement, it is vital that you look into the current tax implications regarding the best Roth IRA choices. A basic degree of financial knowledge is important when deciding what types of accounts are right for your retirement savings, and upcoming changes to tax law are important to consider.

The Roth individual retirement account is a retirement vehicle in which contributions are after-tax rather than pre-tax. What this means is that you have already paid taxes on the money you are putting into this account, and you will not have to pay taxes on this money again or upon distributions upon withdrawing the funds at retirement age. If you think that you will be earning more when reaching retirement and will therefore be in a higher tax bracket than you are presently, then a Roth IRA may be the best choice for you. However, it is important to consider that you will not gain the immediate advantages of a Traditional IRA-namely, the lowering of your current tax burden. Essentially it is best to think of this decision as being taxed now versus later.

If you decide to go for the Roth IRA, then you must remember that there are Roth IRA limits to be aware of. Most importantly, there is the income limit. If you earn more than $105,000 as a single filer, you may be ineligible a complete investment in the Roth. This figure may change depending upon inflation and IRS regulations. Another limitation is that earnings distributions cannot be made without penalty before age 59 , and they must be held in the Roth IRA for at least five years. Otherwise, if you choose to take funds out earlier, there is a ten percent penalty for early withdrawal. In addition, there is a contribution limit for the Roth IRA. The limits for the individual retirement account may change on a yearly basis, but the current limit is $5,000 per year. You must also keep in mind that if you have contributed to a Traditional IRA, then that does count toward your $5,000 maximum. That is, if you have put $2000 in a Traditional IRA then you may only contribute $3000 to your Roth for that year.

If a Roth, individual retirement account, sounds like something you are eligible for and would like to consider, and then you also have the option of a Roth Ira rollover. This is where funds, which are currently in a traditional retirement account, are switched over to a Roth. This is a potential windfall for you, due to tax advantages upon retirement and the potential for a tax-free source of income for you or your heirs.

You will still need to pay taxes on the funds that you rolling over, which mean you, pay now rather than later. In addition, beginning in 2010, the AGI (adjusted gross income) limits in place now will be changing, opening the Roth rollover up to those who are not now eligible. Check the Internal Revenue Service on these important changes.

One of the advantages of the 2010 changes is the unique opportunity to pay your taxes induced by the rollover over two years instead of one. Instead of paying up in 2010, you can pay over two more years 2011 and 2012, thereby easing your finances.

The best Roth IRA choice will essentially make for a tax-free retirement, and for that reason they are increasingly popular. Understanding your options, particularly in light of the upcoming changes to the tax code, is vital to making the most of your hard-earned retirement income. The right IRA decisions will ensure that your retirement money is working hard for you.

Bill Timmer is passionate about helping people achieve their retirement dreams. And you? Please visit his site on The Best ROth IRA. Also, search for information on a tax payments in your Roth IRA!

Tags: , , , , , , , , ,
Posted in stock market | No Comments »

Retirement Plans: IRA’s

Friday, October 23rd, 2009

While retirement plans benefit from special tax advantages, they are also restricted by special tax regulations. For example, you are allowed a tax break if you contribute to a retirement plan and you are able to have your retirement income grow free of taxes (for a certain period of time). However, annual contributions, the total size of each contribution, and the frequency of contributions are subject to restrictions. It is important that you carefully consider your options before deciding on a retirement plan. There are generally two categories to choose from, IRAs and employer-sponsored plans.

IRAs: Considered to be the most widely used retirement plans around, IRAs are a mix of easy setup and maintenance. Anyone can open an IRA, regardless of employer approval, and you can contribute as much as you want (as long as you don’t surpass the annual limits). Listed below are the descriptions of the three most popular types of IRAs.

Traditional IRA. With this type of IRA you are able to let your assets grow on a tax-deferred basis. This is advantageous because you will not have to pay taxes on your assets until you withdraw funds from your account.

Your eligibility to make a contribution depends on statutory limits, your earned income and your age. Your contribution is limited to the amount of earned income income from wages and self-employment income that you have for the year. It doesn’t include investment income. Those age 50 and older may be able to make additional catch-up contributions. Plus, your spouse may use your earned income to make a contribution of his or her own. However, you (and your spouse) are eligible to make contributions only if you’re under age 701/2 at the end of the year for which you’re making the contribution.

Considering other options besides the traditional IRA may be in your best interest.

The deductibility of your contribution is one factor that may make you lean towards once type of IRA over another. Your income level, along with other factors, will determine if a contribution to a traditional IRA will be fully deductible. If both you and your spouse are able to participate in a plan that is sponsored by one of your employers, you are automatically able to deduct your contribution, regardless of how much income you earn. However, your adjusted gross income (AGI) might make your deductions value reduced or even worthless.

If you aren’t eligible to make a deductible contribution (or a Roth IRA contribution), you may wish to make a nondeductible one you’ll still enjoy the benefit of tax-deferred growth. And, when you withdraw the funds after age 591/2, only the earnings will be taxed. You can withdraw your nondeductible contribution without tax.

Roth IRA. A Roth IRA and a traditional IRA have the same contribution amounts. The difference between these two plans is the eligibility rules. A Roth IRA has no age limit with respect to contributions. However, you are only allowed to escape the age limit if you meet the earned income requirement.

The total amount of your annual contribution to IRAs can never be larger than the defined limit. That being said, if you are eligible you can contribute all of your income to a traditional or all of your income to a Roth IRA. You are even allowed to split your contribution between the two different IRA?s.

If you decide to go with a Roth IRA you will have to remember than you are not allowed to claim a deduction. However, you are allowed to withdraw all of your IRA earnings free of tax after you reach the age of 59. You will have to have your account for 5 years to do this.

Traditional IRAs also have required minimum distribution rules that must be followed, Roth IRAs do not have such restrictions.

The exact formula for calculating the contribution amount is very complicated. However, if you were to use 20% of your net self-employment earnings as a guess it would be a close estimate.The formula for calculating the exact contribution amount is too complex for our purposes, but a rough estimate of 20% of your net self-employment earnings is a good start.

Simplified Employee Pension (SEP) IRA. A SEP IRA provides self-employed individuals a way to make more significant retirement contributions than would be available to them through a traditional or Roth IRA. Funds are treated, for tax purposes, the same as IRA funds; you may claim a deduction for your contributions, and distributions will be taxed. But the contribution limits can be much higher.

This data is distributed for informational purposes only; Doeren Mayhew is not rendering legal, accounting, or other professional advice or opinions and assumes no legal responsibility. Contact Doeren Mayhew for more information.

Tags: , , , , , , , , ,
Posted in investing | No Comments »

Start Saving For Retirement Now!

Friday, July 24th, 2009
by Jessica Haug

You will find that there are many methods to choose from when it comes to saving for retirement. Planning for your retirement years should be top priority and ideally should be arranged when you are still young. Making arrangements now for when you retire may also mean that you will have more of a nest egg to use as compared to starting to save when you are that bit older. It may seem like a daunting and complicated process but it is certainly worth the effort.

There are several methods when it comes to saving for retirement. Popular options include various types of pension plans. You can opt for a company pension plan if your company allows it, as well as a private pension and products such as the 401k plan. It is usually normal to have more than one pension plan that you can use once retired, if circumstances allow it.

Another option is to have a personal savings account provided by financial institutions such as banks. Many of these accounts have attractive rates of interest which should mean that you can get quite a hefty amount once you finish working. It is possible to have a savings account in conjunction with a pension plan to give you that little bit more.

Once you have arranged saving for retirement it cannot just be left to its own devices. You will need to monitor any pension plans and saving accounts that you have. Check for things like rate changes which could mean that you are losing money instead of saving it. If you feel that you are getting a raw deal from the plans that you have, shop around. You may find a better deal elsewhere.

Once you do retire it is also possible to have a supplemental retirement income. Some of the plans you may already have such as a 401k or 403b plan can be classed as supplemental income to your company or state pension. You could also look into getting a part time job once you retire to help fund your lifestyle.

Many online sites have a supplemental retirement income calculator tool which can help you to work out how much extra money you need to live. These tools can also help determine what kind of job you would be able to do; you may want to consider a full-time position instead of part-time so you earn more.

There are many options when it comes to working after retirement. You could offer services as a freelancer such as accounting, tutoring, mentoring or writing. There will also be an array of job opportunities that can be found in newspapers and on job boards.

So that we can all enjoy our retirement years to the full, we should all be thinking about saving for retirement. It pays to sort it out now so you are not worrying about it when the tie comes. To find out how to start saving you can find material on the internet to help you; alternatively you can speak to your financial advisor.

About the Author:
Plan401kRetirement.com is the Internet’s premier resource for best retirement plan, with facts and articles on topics such as ira rules, and much more. Click the links above for more information !

Tags: , , , , , , , , , , ,
Posted in investing | No Comments »

How to Make a Budget

Friday, July 10th, 2009
by Joe James

One of the hardest hings for people to do is save money. Our economy is built on consumerism and there are many temptations to spend money. However, with the economy doing poorly and jobs insecure, now it is even more important to make sure you have a nest egg for a rainy day. Luckily, there are many easy and very high value ways to save money and cut your budget.

Avoid paying with a credit card and instead pay with cash. It’s easy to lose track of your spending when you are paying with a credit card. However, if you always carry cash on you, you can easily keep track of your spending. When people actually see the money going away, they are much less likely to spend it. Keep a card in case of emergencies but only for emergencies and make sure it has a low limit.

One of the best ways to save money is to track your expenses. You don’t know what expenses you cut and where you can save money unless you know what you are spending money on. Write down a list of everything you spend money on. Circle the essentials that you have to pay (bills) and then cut the other expenses. You’ll be amazed at all the stuff you waste money on.

Use car pool to go to work. If your friends live in your neighborhood then you can plan to pool. This will help you save on gas as well as you will be doing a big favor to the environment. By carpooling or taking public transportation, you can save a lot of money on gas and auto insurance. It may take a few minutes longer to get to work but it’s worth the few hundred a month you will save.

One of the easiest and greatest ways to save money is to stop eating out. Restaurant food is very expensive and if you eat out a lot, you will have a big food bill. However, eating in and cooking your own food is a great way to save a lot of money. You’ll learn how to cook and you’ll cut your food bill in half. Food is one of the biggest expense people have and one of the quickest and easiest things to cut.

Saving money is something everyone wants to do but everyone has a hard time doing. In this consumerist society, it is really easy to spend money all the time. In order to save money, you need to really look at your budget and cut out the fat. This will ensure that you save a lot of money in case of an emergency and to go out and travel and retire early.

About the Author:
Joe James gives financial advice for a living. He resides in the southwest of the United States and is a retirement specialist. You can find out more information at his website about figuring out finance.

Tags: , , , ,
Posted in investing | No Comments »

Investing for Your Retirement

Tuesday, June 9th, 2009
by Joe James

Many people wonder what financial tool they should get- a 401(k) or an IRA? The answer really depends on your income. If you are loaded with cash, you can contribute to both. The question you have to ask yourself is this: Are you in a position to pay tax today and earn tax free income during your retirement days or you would rather defer your tax liabilities. In a Roth IRA scheme, you have to pay your taxes pre-investment but enjoy retirement without tax liability. With a 401 (K), your investments are tax free on the way in but taxable on the way out.

Sometimes one doesn’t have a choice and you have to get a 401(K). A 401(k) is a pension scheme setup by employers. If you have your own business you obviously cannot hope to make use of a 401(k) scheme. This also means an individual has to abide by the rules of the scheme provided by his current employer and the stock and investment options they have. Many companies do not have a 401(k) scheme. Moreover, what happens when you change jobs? In most cases, you have to shift your 401(k) plan to the new employer’s program. The best part about a 401(k) is that your employer also contributes to the savings so you can get additional money.

In a 401(K), you can invest up to 14,000 dollars per year and that includes both your contribution and that of your employer. Employee and employer combined contributions must be lesser of 100% of employee’s salary or $46k. 401(K)’s are good investment so long as your employer’s matches your contributions. But the thing to think about is this: do you plan to be in a higher tax bracket when you are older? If the answer is yes, then you want to invest more of your money into an IRA.

IRA’s are meant for individual people and can be used to invest in any you want. Unlike a 401k, it is not tied to your job so you don’t have to be tied to an employer’s plan. There is a 5,000 dollar limit to your investment and you can’t take the money out until you are 59 1/2. However, since the money put in is already taxed, the money coming out is tax free. It’s the opposite of a 401k.

You should invest in both if you can. This way you get the most benefit on your taxes. Investing in a 401k reduces your taxes now and an IRA reduces your taxes in the future. The trick is to find the right balance so you are always saving money on taxes. The best deal though is the IRA as you will probably pay more taxes in the future so you don’t want all the money in a 401k to be taxed at a high percentage.

Saving for your retirement is important as you want to be able to afford all the things you want to see and enjoy when you are older. By investing in these options, you’ll be able to maximize your retirement savings. After all, your goal is to never work again so you’ll want to save as much as you can.

About the Author:
Joe James gives financial advice for a living. He resides in the southwest of the United States and is a retirement specialist. You can find out more information at his website, http://www.myownmoneystory.com.

Tags: , , , ,
Posted in investing | No Comments »

Preparing For Your Future Utilizing an IRA or 401K

Tuesday, May 26th, 2009
by Margo Moore

The type of savings fund that can get you the most flexibility over time should be used when saving for retirement. This retirement fund is called a 401K. The 401K account is funded via wages that are taken directly from your employer into a retirement account. 401K contributions come from your pretax salary and cannot be taxed themselves. The name 401K came from the IRS code that created these types of accounts.

There are many advantages to using a 401K; such as making contributions before taxes are taken out you actually reduce the amount you will pay on your salary. All contributions to the retirement account are tax-free until they are withdrawn.

It is also possible to make a lot of money if you have funds that sit in the 401K for 20 to 30 years. You also have a lot of control over what you want to do with that money while it is sitting in your retirement account. Many times companies will also match the contribution you make to your 401K. Pension laws also protect this type of fund as it is considered a personal investment

It is not possible to access the money in your 401K until you come of age, usually 59 . At age 701/2 you are required to take RMD, or required minimum distribution. If you do receive matched 401k contributions make sure you do not exceed the 401k limits, as they vary each year. The PBGC or pension benefit guaranty corporation does not insure additionally 401K funds and should not be confused with a fixed annuity.

It is possible to investment in a variety of ways in your 401K. Your money can go towards money market funds, maturities, bonds, stock funds and other avenues. You are allowed to chose how you want to invest and can make changes when additional funds are deposited into the retirement fund. Most financial experts say that most individuals are not aggressive enough with their investments as stocks that are held for a long time do very well. Towards the end of the 401K period, when you may want to take money out you can switch to more conservative funds.

There are 401k rules and maximum contributions limits that can be made to your 401K. Each year will have a maximum allowable 401k contribution limit. Most contributions are made before tax, as you will receive the most benefit from this type of contribution. Pre tax payments must be made fairly quickly. It is also possible to make after tax contributions.

After tax contributions are easier to access as it is possible to take a 401k loan out from yourself from your after tax contributions. These do have some drawbacks; so make sure you understand the 401k rules. The 401K retirement account was designed to benefit the majority of workers, but also benefits the individuals that run the companies. As they are able to provide a great benefit to their employees. Much like 401k’s there are IRA rules if you’re considering those retirement accounts.

IRA retirement accounts are individual accounts. When planning for your other accounts it’s important to understand the different forms of title. Many couples set up accounts as a joint account, but there are some often better ways like tenants in common, joint tenancy, and community property. Do some research to find your best match.

There are also IRA accounts that are similar to a 401K. IRA accounts are not from companies and is an individual account. All contributions are made after taxes, but you can claim the tax back when you file your taxes. It’s important to understand the IRA rules. You can take IRA deductions each year based on the IRA limits for contributions. Roth IRA rules differ when compared to traditional IRA accounts, so make sure you understand the differences. It is also possible to access your IRA money if you are buying a house, paying for school or have medical expenses.

About the Author:
You will discover other finance topics covered like the life settlement pros and cons. And we take a look at a number of other insurance topics like universal life insurance and how it works.

Tags: , , , , , , , , , ,
Posted in investing | No Comments »

« Older Entries
Newer Entries »