It might not be immediately obvious, but Mitt Romney has millions of his fortune in investments funds in the Cayman islands, an infamous tax refuge.
A representative for Romney says he obeys the law, and that he pays the normal taxes despite where his money is.
As Republican nominations get closer, Romney is finding it harder to keep the secrets about his wealth under wraps.
Jack Blum, a lawyer from Washington thinks Romeny’s financial situation is a disgrace to the United States tax system.
Romney recently let out that he has been paying only 15% in taxes, much less than most of us. He stated privacy as the reason for wanting to keep this information separate, but all potential presidential candidates have to expect people to look into their financial affairs.
Romney is not hurting for money. His fortune is estimated at 250 million, and he pays lower income taxes on his investments in the Cayman Islands.
Blum says channeling money through offshore accounts lets investors avoid many small fees and traps that they would pay if the same money was on US soil. The primary reason for having funds in that location is avoiding taxes.
It may not be illegal, but it looks bad to some people, and the tax havens like the Cayman Islands cause the US government to lose out on $100 billion in revenue every year. Considering his timing, Romney may be wishing his investment funds were somewhere else less suspicious right now.
Your 401K retirement account is something that is very important to your future retirement. However, like many other people you may be considering borrowing money from your 401K account to fund something that is important to you such as starting up a business. It goes without saying that you should never make a rash decision with regards to borrowing from your 401K account, as you could potentially be risking a comfortable retirement by doing this. However, there is sometimes occasions when it can be fine or even advisable to borrow from your 401K account as opposed to looking at other options.
Of course, it is important to always consider what other options are available to you when you are in need of funds, as you may find that there is something that is more suited to your needs and financially viable than using your 401K account. You should bear in mind that, other than under certain circumstances, you may end up paying hefty withdrawal fees/penalties for taking money from your 401K fund early. However, if you repay what you borrow within sixty days you can avoid these charges.
With this is mind, borrowing from your 401K retirement account on a temporary short term basis is often a good idea, as you will not be hit with the penalty fees. This is an ideal solution if you have a short term cash flow problem and know that you can repay the money within sixty days.
If you have a lot of high interest debt that is financially crippling you then you may also find that tapping into your 401K for a loan could be a good idea, as you can ease the financial strain. You will also find that borrowing from your 401K at a really low interest rate to repay a debt such as a credit card debt with a really high interest rate makes financial sense. However, you need to make sure that you do not get carried away and borrow only the amount that you actually need rather than being tempted to take a little extra – after all, it is your retirement money that you will be taking!
Essentially, borrowing from your 401K is something that would be considered ok if it is for a necessity such as medical expenses or something that is going to ultimately save you or make you more money, such as paying off high interest debt or investing in your own business. What you should never do is risk your future by taking money from your 401K simply to splash out on luxuries such as holidays.
Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from savings to mortgages to
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Choosing to work on a personal financial strategy is made easy when using tools like the best retirement calculator. Enlisting the help of tools used by experts is always the best way to go. Nothing can be more helpful to financial planning than having tools that will make that planning easy to understand. The numbers matter. The tools needed must be reliable and accurate.
Retirement Savings Calculator
The retirement calculator has the strongest potential for making or breaking a savings plan. While the program is created by some engineer, it is the end-user being able to read the output that makes the most difference. A savings calculator allows the input of user data and then quickly outputs formidable information used in creating a plan. Every good plan will always begin with the right tools and then culminate in sound advice.
Your Retirement Plan
With the information that comes out of the calculator it is easy to decide what steps should come next. The plan is what comes next. The information will tell the user with some clarity what must be obtained and how it may be obtained for a proper and secure retirement. Most people want to retire at some point, they simply don’t know how and that is what puts the most fear in personal planning.
The Best Places to Invest
As the information is now available, it is also important for the user to have some advice on the best places to invest. After all, the information on retirement would be nothing unless the user has a place to make the data usable. With the latest tools and a good primary plan, it is always a good idea to ask a few question, but the blueprint being laid out will make the asking less likely to be controlled by the advisor. Starting with good tools puts the user in control.
A lot of people talk about IRA and the types of investments. However, a lot of people tend to be confused when IRA rates are talked about. This is due to the fact that these rates do not really pertain to the rate of IRAs but to the rate of returns from the investment it holds. IRA accounts is not a single investment where you can specify it’s rate. It is an investment account that can hold different types of investments such as stocks, mutual funds, real, estate certificate of deposits and a lot more.
When you talk about IRA rates for stocks, it pertains to the rate of returns that you will get from stock trading. Usually, people will not be able to know these rates until they make the trade and the fees are subtracted and no one knows for sure if they will gain or lose in a particular stock. It is risky but can be very rewarding.
If you invest in certificate of deposits IRA rates pertains to the rate of interest that you will get from your deposit. Investing in CDs is probably one of the safest ways to invest your IRA funds. You will be given a fixed interest rate and a predetermined time when you will be receiving your earnings. The IRA interest rates would usually vary depending on the type of CD that you plan to invest in. those CDs that requires a larger amount of minimum deposit and those having longer terms usually have higher IRA interest rates.
For you to find the best IRA rates for your account, it is important that you do an intensive research on the place where you will open your investments. Find out the rate of returns and the fees involved. This way you will be able to make the most out of your investments.
Are not all retirement accounts the same, they just hold money for you while you are waiting to retire correct? This is not true and most retirement accounts differ in many ways and these differences can make or break the account for you. Below is listed a few differences between a Traditional IRA and a Roth IRA.
A Roth IRA is a retirement account that requires for the holder to pay taxes on the money that is contributed to the fund in the year it was earned. This is not true of a Traditional IRA which allows for the holder to wait until the funds are withdrawn in order to pay taxes on the money. Also there are Roth contribution limits and income limits which narrow the pool of people who can contribute to the fund.
When you contribute money to a Traditional IRA your adjusted gross income (AGI) is reduced. This means that when you file your taxes the amount of money you have made in the year is reduced by what you have contributed to the fund, and this is not the case when contributing to a Roth IRA. The lowering of your AGI has the potential to place you in a lower tax bracket and thus you can receive tax breaks and benefits.
It can also be argued for both a Traditional IRA and a Roth IRA that depending on which state you retire to one account can be better than the other. If you currently live in a higher income tax state than the one you wish to retire to then it is possible that by using a Traditional IRA you can save money because your income will be taxed later. The opposite is true of a Roth IRA because if you live in a lower income tax state and plan to move to a higher taxed state then you can save money.
There are benefits and disadvantages to both retirement accounts and depending on your financial situation one could be better suited for you.
The online environment has led to some of the best investing opportunities in recent history, and while the actual ventures are nothing new, the approaches and technologies used with them are. It is no different with Roth IRA accounts, and the online resources have allowed investors to take advantage of more options and compare the rates and services of many providers to get the best plan for any given situation.
One of the most attractive features of the Roth IRA is its flexibility, and while the program itself is structured to be as versatile as possible, when the power of the Internet and global communications are added, the possibilities of the even the best Roth IRA accounts increase dramatically. The web also allows users to compare the best Roth IRA providers as well, just as would be done if one were investing anywhere else from penny stock brokers online to gold scrap dealers.
Funding and Investment Options
The best Roth IRA account fits the needs of those investing into it, and this is another of the defining features of this great program, and from the funding options to the various outlets that can be invested in, these are truly some of the most versatile retirement options there are. Outlets like E-Trade and Fidelity both have some of the best Roth IRA rates and options, as well as the most trustworthy reputations, some particularly important aspects when investing for retirement.
Taxation and Fees
Another very alluring feature of the Roth IRA strategy is the tax incentives they bring to the table, and unlike most other retirement plans, 401-K and traditional IRA plans included, the withdrawals are not taxed, as these are taken care of when the contributions are made. This, and the fact the only real fees are for early withdrawal and just about anyone in the middle-class income bracket can use them, are some of the best Roth IRA features.
When can you Take Advantage of a Roth IRA Account Online? (2009tax.org)