Tax Free Income, Is It Possible?

<h1>Tax Free Income, Is It Possible?</h1>Author: <a title="Jaclyn Weitzberg" href="http://www.articlesbase.com/authors/jaclyn-weitzberg/263410.htm">Jaclyn Weitzberg</a> I know what you are thinking, "What kind of scam are you pulling?". While the idea of earning interest free of taxes sounds ludicrous, it is not! Let me explain how it works. <ul> <li>Each year you have the ability to contribute up to $5,000 to this account. ($6,000 if you are over 50 years old)</li> <li>You have the ability to contribute as little as $25 per month to the account. (I recommend setting up an automatic monthly contribution so you don't have to think about it.)</li> <li>The account is invested as you see fit (mutual funds, bonds, stocks, etc.)</li> <li>As the investments perform and interest accumulates, you do not pay taxes on the earnings.</li> <li>When it comes time to withdraw the funds in the account, you can access them tax free!! *</li> </ul> Sound to good to be true? To see the benefit of tax free growth, here is an example: <ul> <li>Bob is 30 years old</li> <li>He saves $100 a month</li> <li>He invests wisely and is able to attain a 10% average rate of return in his account</li> <li>At age 65, he has saved $42,000</li> <li>Since the account had been growing tax free at 10% the value at age 65 is now $357,752!</li> <li>Bob can withdraw the entire $357,752 from the account and will not have to pay any taxes</li> </ul> So what is this magic account? The Roth IRA. Established by the Government and made available in 2008 to encourage individuals to take retirement savings into their own hands. By starting early, and contributing regularly, you will be one step closer to meeting your retirement goals. There are some income limitations*, but if you are eligible, you should <a href="http://www.guidemyfinances.com/Personal-Financial-Planning" target="_blank">set up a Roth IRA today.</a> * A qualified distribution is generally a distribution that is made after a 5 taxable year period of participation and that either is made on or after the date the employee attains age 59½, is made after the employee's death, or is attributable to the employee being disabled. * Phaseout of Roth contribution eligibility: Single: $105,000-$120,000 AGI Joint: $166,000-$176,000 AGIAbout the Author: Jackie Weitzberg, CFP® |
Certified Financial Planner|
<a href="http://www.GuideMyFinances.com" target="_blank">www.GuideMyFinances.com</a> | <a href="mailto:Jackie@guidemyfinances.com">Jackie@guidemyfinances.com</a>|
Phone: 877.884.0550 | 9740 Appaloosa Rd #200 San Diego, CA 92131|

(Securities offered through Securities America, Inc., A Registered Broker/Dealer, Member FINRA/SIPC, and advisory services offered through Securities America Advisors, Inc. an SEC Registered Investment Advisory Firm. CA Insurance License #0E49845. Securities America and it's representatives do not provide legal or tax advice. Please consult an appropriate advisor regarding your personal situation prior to acting on any information. Licensed to offer securities, insurance, and advisory services in the state of California. The forgoing information and opinions are for general informational purposes only and are not intended as an offer or solicitation with respect to the purchase or sale of any security or offering of individual investment advice. The Registered Representative does not guarantee the accuracy and completeness, or resume liability if such events do not come to pass. Such information or opinions is subject to change without notice.)Article Source: <a href="http://www.articlesbase.com/">ArticlesBase.com</a> - <a href="http://www.articlesbase.com/personal-finance-articles/tax-free-income-is-it-possible-1359384.html" title="Tax Free Income, Is It Possible?">Tax Free Income, Is It Possible?</a>

I know what you are thinking, "What kind of scam are you pulling?". While the idea of earning interest free of taxes sounds ludicrous, it is not! Let me explain how it works.

Each year you have the ability to contribute up to $5,000 to this account. ($6,000 if you are over 50 years old)
You have the ability to contribute as little as $25 per month to the account. (I recommend setting up an automatic monthly contribution so you don't have to think about it.)
The account is invested as you see fit (mutual funds, bonds, stocks, etc.)
As the investments perform and interest accumulates, you do not pay taxes on the earnings.
When it comes time to withdraw the funds in the account, you can access them tax free!! *

Sound to good to be true? To see the benefit of tax free growth, here is an example:

Bob is 30 years old
He saves $100 a month
He invests wisely and is able to attain a 10% average rate of return in his account
At age 65, he has saved $42,000
Since the account had been growing tax free at 10% the value at age 65 is now $357,752!
Bob can withdraw the entire $357,752 from the account and will not have to pay any taxes

So what is this magic account? The Roth IRA.

Established by the Government and made available in 2008 to encourage individuals to take retirement savings into their own hands. By starting early, and contributing regularly, you will be one step closer to meeting your retirement goals. There are some income limitations*, but if you are eligible, you should set up a Roth IRA today.

* A qualified distribution is generally a distribution that is made after a 5 taxable year period of participation and that either is made on or after the date the employee attains age 59½, is made after the employee's death, or is attributable to the employee being disabled. * Phaseout of Roth contribution eligibility: Single: $105,000-$120,000 AGI Joint: $166,000-$176,000 AGI

Jackie Weitzberg, CFP® | Certified Financial Planner| www.GuideMyFinances.com | Jackie@guidemyfinances.com| Phone: 877.884.0550 | 9740 Appaloosa Rd #200 San Diego, CA 92131| (Securities offered through Securities America, Inc., A Registered Broker/Dealer, Member FINRA/SIPC, and advisory services offered through Securities America Advisors, Inc. an SEC Registered Investment Advisory Firm. CA Insurance License #0E49845. Securities America and it's representatives do not provide legal or tax advice. Please consult an appropriate advisor regarding your personal situation prior to acting on any information. Licensed to offer securities, insurance, and advisory services in the state of California. The forgoing information and opinions are for general informational purposes only and are not intended as an offer or solicitation with respect to the purchase or sale of any security or offering of individual investment advice. The Registered Representative does not guarantee the accuracy and completeness, or resume liability if such events do not come to pass. Such information or opinions is subject to change without notice.)

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Article Tags: Saving, Finance, Investing, Financial Planning, Retirement, ROTH IRA

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