Retirement Plans For Self Employed

Frequently Asked Questions

1. QUESTION:
   What is the best retirement plan for self employed worker?
   I am 32 and working as a real estate agent. I don’t have a retirement plan yet, people tell me to open a RothIRA or a simple 401k…i don’t know much about these things, any advice is appreciated.

   • ANSWER:
     Let me start by saying, what you need to start first is a ‘Traditional IRA. What is that? You take the money to a Savings institution, and Open an IRA acct.. You can put up to 00 dollars, in it each year. Preferably all at once on Jan 1 You shop all the banks for the best interest rate, and it is locked up in a time certificate for 18mon or 3yrs..And you do an annual contribution every year thereafter.. Now the good part,, you write off the 00 off you income tax, which will net you a refund from five to six hundred dollars, every year..Depending what your tax bracket is..The00 keeps earning interest and you got 600 of it back..It grows tax free till you take it, in retirement.. Then you can take the 0 refund and invest in stocks ,bonds ,whatever else you wish to try for additional retirement investments. A 401k is really only good if you have an employer who matches a percent of your contributions.. Your self-employed so its all your money.. You can also have a roth I RA which is an investment vehicle which uses the markets ,mutual funds and bond funds for growth. Do yourself a favor and stop in one day at your favorite bank , and sit down with a financial advisor and planner, ask them about retirement vehicles, but just listen.. Then check at several more.. After about three, you’ll have all you need to know to make a intelligent deceision.. Being a real estate agent, you know mortgage loan vehicles are different, and so is retirement investments.. Hope this helps,, I myself practiced this very method ,and retired financially secure.. GOOD INVESTING!! SOLOMON

2. QUESTION:
   For working, self-employed people with generally good incomes-Do you have retirement plans now? Please explain?
   I’m doing my homework, and my teacher has asked us to ask people with good, stable jobs, who are self-employed, like a dentist, or an orthodontist, or something, if they have retirement plans now, and to please explain.
   If you wish, please state your age (or approximate), and your occupation.

   • ANSWER:
     well you did not get to many responses – i myself am retired but if i was in the work force as self employed i would have a regular ira which is pre taxed money you can set a side for retirement — and also i would be putting money in a roth ira which is post taxed money — both have the same ground rules for taking out the money– if you want more info you could type self employed retirement plans into search for question and you should be enough info to do a paper — good luck!!!

3. QUESTION:
   What is the best retirement plan for a self employed (not incorporated) person with no employees?
   And by “best” I mean, which plan will offer me the best tax break now? The web sites are confusing, can I deduct 100% of my contributions to a self employed 401k?

   • ANSWER:
     Check with a local financial advisor. Most have free consultations or open houses. You should always incorporate your business because it limits your personal liability, provides tax breaks, and enables you to set up different types of retirement plans. 401Ks are offered by employers to employees. Your best bet would most likely be a traditional or Roth IRA. Again, check with your local advisor.

4. QUESTION:
   Question about the Solo 401 K Retirement Plan for Self-Employed?
   I have run a consulting business full-time for the past five years. I now want to accept a great opportuntiy to take a full-time job that requires me to shut down my business. In fact, a client wants me to go with them full-time. Can I still maintain my Solo 401 K even after self-employment ends? In other words, can I still access the self-loan component? Can I still rollover the proceeds from my previous 401K into one larger Solo 401 K account after I end self-employment? Those are the two biggest benefits of the Solo 401K that I’d like to continue. Thank you.

   • ANSWER:
     To answer your first question, the solo 401(k) is a qualified plan. The contributions are based on a percentage of self-employment income. If you are no longer earning income as a consultant, no further contributions can be made. You can, however, leave the money in the plan to grow tax-deferred.
     The loan provision is still in effect and you would be able to borrow up to 50% of the balance if it’s less than ,000 (I’m pretty sure about that limit, but you can check with your plan administrator).

     I’m not sure I understand the question about the rollover. You say “previous 401k into one larger Solo 401k” after you end self-employment. I know you would be able to roll your Solo 401(k) into your new 401(k) plan at your previous client’s company. I’m not sure about vice versa since you would technically be “separated from service”.

     Check with your plan administrator for confirmation on all the details. They will be able to answer the questions more in depth.

     Ron, ChFC

5. QUESTION:
   I am self-employed and do not currently have a retirement plan.I have no idea where to put my money I am 35yrs
   I am 35 yrs old, currently have no savings, and I would like to retire early I have approximately 700 extra dollars to put away for retirement

   • ANSWER:
     700? weekly…daily…monthly…yearly…what age?

     Roth IRA….you will not be able to retire early unless you sock that much away weekly…

6. QUESTION:
   I am self employed, what are my retirement options? I am planning to retire in the next three years?
   I have been living in the U.S for 5 years, I have no W-2 wages since I am self employed. I have some social security credits but is that enough to retire. What is the minimum retirement or pension if I retire. I am 57 years old.
   Thanks in advance.

   • ANSWER:
     I’m assuming you have been paying self-employment taxes – which would entitle you to social security benefits when you are 65.

     Generally, SS benefits are not enough to live on.

     Your “retirement options” will depend on what measures you took to plan for your returment. Did you set up and contribute to returement funds like an IRA? Have any investments? Your options will depend entirely on what you’ve saved, and how your investments are doing.

7. QUESTION:
   I am self employed, my wife works for a company. Who is better to contribute to a retirement plan?
   Will i get a better tax benefit since I have to pay self employment taxes on my income?

   • ANSWER:
     First off, contributions to retirement plans are NOT exempt from Social Security and Medicare or Self-Employment taxes. They are only exempt from income tax and only certain types of plans have any up-front tax benefits. For example, a Roth type plan has no tax benefit going in, the benefit is all on the back end when you take your distibutions from the plan tax-free.

     As a self-employed individual you have a number of options available to you. You can open a traditional IRA or Roth IRA. Or you can look into a SEP-IRA type of plan. These are ideal for the self-employed and small business owners as they allow much larger contributions than a standard IRA does.

     You and your spouse should each have your own separate retirement plan. Although divorce may be untinkable to you right now, statiscally your marriage will not last. The worst that can happen in a marital breakup is that one party is left destitute with no retirement at all. The next worst if having to share a hard-won retirement benefit with a spouse who may not be “deserving” at least in your own mind.

     Consult with an independent fee-based Certified Financial Planner who does not sell any investment products. They will help you review your financial situation, resources and goals and select the best retirement vehicle for you. A full workup may cost you a couple of thousand but is money wisely spent over the long term. (I have to disagree with Tim on this point. A financial planner who sells investment products is motivated by how much money he or she can make off of the investment products they sell you, NOT what is in your best interests! NEVER use a “financial planner” who sells anything other than planning and advice. They are NOT financial planners but are just glorified salesmen and securities dealers.)

     A poor decision today could leave your menu selection in your “golden years” limited to Alpo or worse. Careful planning today may leave you choosing between Honolulu or Scottsdale for your retirement home, a MUCH more palatable choice to have to make.

8. QUESTION:
   Can a self employed person have a retirement account similar to a 401(k)?
   I know with a traditional IRA one can write off contributions from income taxes but for instance:

   Self Employed Person: Contributes ,000 to Traditional IRA, writes it off on tax.

   Employee: Contributes ,000 pretax to 401(k) and receives matching funds for a total of ,500.

   Are there any plans available to a self-employed person that could give him *similar* benefits of the the 401(k)?

   • ANSWER:
     No – the 00 match is contributed by the employer and it takes years to be fully vested for the employer contribution of a 401K.

9. QUESTION:
   Which retirement plan is best for the self-employed? Might form a partnership in the near future.?

   • ANSWER:
     i am in the banking business and i would recommend the secured savings account as a option for your retirement dilemma.
     you can have a secured savings account that can help you collect interest on your money and you can set up transfers to this account on your choice of dates along with how much you want to transfer. so many companies offer retirement plans but if you are self employed you don’t have a fixed income coming in so you can’t really determine how much funds you will have everyday. comparing the amount every week or biweekly after deducting your expenses you should at least transfer a small amount into this savings account. a secured saving as account is perfect because you are only allowed to transfers into this account and you cannot withdraw amount for the time frame you have set for this account.

10. QUESTION:
    Retirement savings ideas for someone who is self-employed?
    I’m 41 years old and started my own business one year ago. I would like to take the next step and set a some type of retirement savings plan but I know nothing about them. I am the only employee of this business so I’m only saving for myself. Do I consider a 401K plan, stocks or something else? Anyone have any suggestions?

    • ANSWER:
      You are confusing two separate important points.
      1. A vehicle to operate retirement income 401, IRA, KEOH,ROTH. The differences between them are the anual deposit amounts, and tax considerations.

      2. What to invest in with the funds put in those accounts. The investment ideas are pretty much the same but the vehicles have different rules to contribution limits,taxation considerations. Stocks, mutual funds, hedge funds, and bonds are purchased in any of these vehicles.

      If you can set up a Self Empoyed Retirement Fund do it. Brokerage houses will do the legal paperwork to start one. Even if you are the only employeee. You can put up to 18% of your income tax deferred into that type of account.

      Even though you have the 401 vehicle, you can in addition to this do a Roth IRA (taxes paid on the money in… tax free for all the earnings) 00 a year or if you make more than 165k a year… just the regular IRA (tax deferred) ,000 yearly.

      If I was just starting out in my 40′s, I would put every surplus dollar into both until the contributions were maxed each year. (Do the 18% in the 401K contribution first then the Roth or simple IRA second. Why the 401 first? If you are a business, it reduces the amount of money considered “profit” in your company so less taxes on the business and the business is contributing 1/2 of the funds “matching dollars” so it’s basicly done without paying (deferred) Federal, and State taxes. The 401 deposits make you a cool 15.3% on your money just for depositing them since you totally avoid paying your matching business 7.64% and personal 7.64% FICA deposits because you avoid taking the money as your salary first. How neat is that?

      In a ROTH you are getting some of the taxes back by reducing your taxable gross income by 00.00…but your business and you STILL paid the FICA on those funds and those are not tax deferred. Since YOU are the business, that means less money in your pocket…. therefore always max out the 401 first.

      If I maxed out the contributions allowed then start up a separate account for your non-retirement dollars. This way there is no penalty for pulling money out early before age 65 if you are fotunate to retire early. : ) This will also act as a very effective emergency fund since there are no penalties for early withdrawal.

      Now what to invest in is a different story but the basic idea is to have a multiple approach investments so that one market area downswing doesn’t cause a big loss to your portfolio. Brokerage houses usually have better maintenece fees for operating your accounts than do banks. Shop around and it is different for each mutual fund invested in. Make sure the fee structure does not overpower it’s earnings potential.

      My advice would be to “hire” an independent financial counselor that does NOT invest or have a stake in the ideas brought to the table. Let him set up the types of investments to be involved with so that the recommendations are made for your benefit and not the brokers or the banks benefit. Watch out for financial consultants that are pushing insurance. The make a hefty profit on these schemes and less real money reamains for investments. If you need insurance buy TERM insurance on your own for pennys on the dollar. It has no cash value unless you die but the coverage is great and you will outperform any insurance policy by miles. It is NOT a good investment.

11. QUESTION:
    Self-employed 20yr old needs a retirement plan. IRA vs Roth IRA vs 401(k)?
    I am 20 and a self-employed freelancer trying to start a business on the side. I want to start saving for retirement but not sure where to start. I was reading that Roth IRA would be a great option, but then someone suggested I “Max out” 401(k) first then invest in Roth IRA. Any suggestions would be great.
    My business is currently setup (DBA, license, etc).
    I am able to afford all the current monthly expenses (Merchant Account, Web hosting, etc).
    I have an emergency fund that I put money into every month. Currently ,000+ in reserve.
    I currently have health insurance.
    I don’t have any high interest debt.

    My main concern is that it typically takes 3-5 years to get a “steady” profit. I have been doing this for about a year and a half. If I wait until I am getting a steady profit I could be 23+. I would like to start planning for my retirement. Especially after viewing this chart: http://www.getrichslowly.org/blog/2006/05/23/the-cost-of-waiting-one-year/ Do you think that’s a good idea? Or should I focus on something else?

    • ANSWER:
      Put your money back into growing your business. That will (potentially) give you a much greater return on investment than putting your money in a coffee can and burying it for the next 45 years. That is the net result right now in a flat stock market and economy (bank CDs at 1%, etc). A THRIVING BUSINESS IS YOUR RETIREMENT. Also your current life; as in house, car, family,,,,

      ROTH money has already been taxed, so why squirrel it away? Well,. they say, there are conditions under which you can take it out. But, I ask, does that not make a mockery of the term “saving for retirement?” And a traditional (pre-tax) IRA will not save you anything if you are not making enough profit at this time.

      And do not pay attention to those “math” experts who compound money to make it look like you can retire with a million dollars. Illustrative joke: I won a million dollars at the casino in Vegas. Only cost me m to get it.

12. QUESTION:
    Young, single, self-employed female looking for best Retirement Plan?
    I am 24 years old and the sales and event director of a booming event venue. I have a passion for my job and am expecting to make a ,000+ commission at year’s end on top of my ,000 guarenteed salary. Unfortunately, I am
    10-99′d. But I do have a signed agreement that my employer will pay (tax free) the extra 7.65% that I normally would not have to pay if I was on a regular payroll. I get paid weekly (6.92/week). I have trying to set aside money to pay my taxes that I will owe, but it is hard.
    1.) How much should I be saving a week to cover my taxes at the end of the year?
    2.) Should I file taxes quarterly? And how do I go about doing so?
    3.) Beyond saving for taxes I would like to invest in some sort of retirement plan or 401K or something that will gain interest. What would be the best route to take? I do not have a substantial savings to invest intially. Do I have to deposit a minimum amount to get started?

    Thanks so much for anyone who tackle this one!

    • ANSWER:
      As a 1099 employee, you are officially self-employed meaning you can set up a SEP IRA, a Roth or a traditonal. You need to talk to a brokerage firm to determine your risk tolerance.

      For the taxes, you do get to write off your work expenses which helps with the tax burden. But without knowing your write offs it’s hard to deterimine your tax bracket. Minimums are usually 0.

      Based on 2007, your tax liablity would have been 15,180 plus the social security payment for being self employed. Your state tax will depend on the state you’re in.

13. QUESTION:
    If I have a retirement plan at work , can I stil contribute to a roth ira -?
    I file married filing jointly – what is the income cut off for donating to a roth? Husband is self- employed and no retirement plan – he puts his in a traditional ira – what is his cut off

    • ANSWER:
      You can still contribute 00 to a Roth IRA (00 if over age 50) if your modified AGI is under 6,000.

      Your husband can also contribute 00 to a traditional IRA (00 if over age 50) and take a full deduction if your modified AGI is under 6,000.

      Phaseout provisions apply over this amount. (See worksheet 17-2 in IRS Publication 17 to compute your “Modified AGI”.)

14. QUESTION:
    I’m self-employed and want to start planning for retirement…?
    I am 29 years old with one son. I am a single mother. I am self-employed. I am going to invest in a Roth IRA in January 2011. Now I have read the book Women & Money by Suze Orman. She suggests ETFs for lump sum investors. I am going to do lump sum investing. I know what ETFs are and how they work thanks to the book but I need to know how do I go about CHOOSING ETFs. Where do I go for research. I also don’t understand what I’m reading when looking at the stock market “things”, ex: numbers and figures, etc. etc. Somebody help me, lol! Tell me where I go to find this info. Please be specific in your answer…pretend you’re talking to a 5th grader, for I’m still very new to the investment game. Thanks in advance.

    • ANSWER:
      Before you invest using only a Roth look at a SEP IRA since you are self-employed. You can deduct contributions to it reducing your income tax burden. For those years when you have slim earnings (and there will be some) use the Roth. When you have a good year use the SEP to reduce taxes. And you can use both up to a combination of ,000 per year.

      As the how to pick an ETF:

      google exchange traded funds screener and you will see many free screeners that can help you choose an ETF. Morningstar has one that allows you to shift through them along with giving you Morningstar ratings.

      What you have to determine first is your asset allocation. At your age stocks will provide the highest returns, but will also have the most risk. In order to reduce your risk you might select two ETF’s. One for stocks, one for fixed income and split your contribution according to your comfort. (As a rough rule of thumb many advisors used to suggest taking 100 minus your age to get the equity piece.) In your case 71% stocks, 29% bonds.

      Using Morningstar’s screener you could get a low cost ETF mix for this by investing in:

      71% – Vanguard Total Stock Market ETF – VTI (expense ratio .07)
      29% – Vanguard Intermediate-Term Bond ETF – BIV (expense ratio .10)

      The main thing is to research what areas you are comfortable with and then use the screeners to help find the lowest cost solution. You can rebalance when you contribute the following year.

      Good luck!

15. QUESTION:
    What experience have you had with medical savings accounts for self employed (MSA)?
    We are looking at “self employment,” or retirement. A high deductible medical insurance seems our most likely avenue for health insurance. We’d like to pay for it with pre-tax dollars. We both participated in cafeteria plans while fully employed.

    (I already read the Wikipedia article on the subject, so please don’t post it again.)

    • ANSWER:
      For individuals, whether self-employed or not, I’d suggest a Health Savings Account (HSA) qualified plan. The HSA account is funded pre-tax, it rolls over year after year, the growth is tax differed, and money comes out tax free for nearly anything medical. The better high deductible insurance policies will pay for everything 100% after deductible. When you go to the doctor the amount you pay (which can come from the HSA account) goes toward your deductible.

      You’ll want to read the IRS publication 969 for information concerning the tax treatment of the MSA and HSA plans. You should also visit a local independent agent for more assistance. The agent can explain everything fully and can also find the best insurance plan for your situation and budget.

16. QUESTION:
    What type of retirement plan would be good for me, since I am self-employed?
    I have been running a home day care for over 6 years now and, I guess, I just now really started thinking about starting a retirement plan. My husband had one through his employer, and had an old retirement account from his former employer, which he put into a CD at our local bank. I don’t make a whole lot of money and have 4 kids, but would be able to put about – aside each month for that. I just don’t know what I should put the money into. I need some suggestions please and maybe a little info about it.

    • ANSWER:
      iam

      Because there is probably a tax advantage for doing a traditional ira that would be my choice. I suggest that you open it with a Mutual Fund, get a Large Cap stock fund, and put the money in on a monthly basis (if possible) you get a much larger return by doing so!

      Speak with you accountant re the tax advantage, and then go from thee!

      Soccerref

17. QUESTION:
    What are the best vehicles for retirement investing for a combination of salaried, self-employed, and pension?
    I’m retiring from the military after 20 years and moving on to a second career (still about 20 years from ultimate retirement), and looking for the best plan for accumulating retirement funds. I expect to have considerably more income than my current standard of living and would like to invest the maximum possible in IRAs and similar vehicles with tax advantages.

    I am married (wife is not employed outside the home) and will have three sources of income next year: my primary job will be salaried at K/year including an employer-matched (to 6% of salary) 401K plan; I’ll have a K/year self-employed consulting contract (potential for Keogh?), and I’ll receive K/year military retirement pension (unearned income). The sum AGI puts me over the limit for contributing to Roth IRAs, but I’m confused as to whether the 401K, Traditional IRA (for self and wife), or a Keogh plan are better, or can be used simultaneously. Assuming lots of $$$ to invest, where should I throw my money?

    • ANSWER:
      Invest at least the 6% in your 401K since that is what they match. IRA’s have pretty small contribution limits, so unless you open multiple IRA’s you won’t get much benefit here. I would max your investment in the 401K (after a year – usually – you can increase your investment significantly. I can put up to 22% in mine and I do). You can use them simultaneously. Rather than open a Keogh additionally (although you can certainly do so-I just think they are a hassle) you can just open an investment account with your local bank to invest in stocks similar to your 401k (if they are good ones) because since you will already be following them you can invest more with less research.

18. QUESTION:
    Can I still contribute to my traditional IRA in future years if I am now self-employed?
    I just opened a traditional IRA account and made the max contribution (00) for tax year 2010 shortly before the April 18, 2011 deadline. For a majority of 2010, I was an employee of a small business (a medical practice). Now, in 2011, I have become a full partner in the medical practice, so in other words, I am now self-employed. I am in the process of setting up a new retirement account since this year I am now self-employed (still confused on how to do this through my business, but that is another story – I think I have a “profit-sharing” plan so I am unfamiliar with that as compared to the more traditional self-employment retirement accts like SEP-IRA or Keoghs).

    My question is, now that I am self-employed, for tax year 2011 and each and every year thereafter until I retire, can I still make a contribution to my recently opened IRA (which was created for tax year 2010, when I was an EMPLOYEE), seeing as now I am NOT an employee anymore? I’ve scoured the internet and have come up with NOTHING. Not even my accountant really knows the answer.

    Also, if I CAN contribute to the IRA every year from now on, is the contribution (say 00) still tax-deductible, or will it just be part of my general tax-deductible contributions, including what I put in my newly formed self-employed retirement acct (the profit-sharing plan account, which I think the max contribution is ,000/year). In other words, can I keep the IRA, and potentially contribute up to ,000/year (which would be tax-deductible) by spreading over the 2 accts (00 in the IRA and ,000 in the profit-sharing self-employed acct), or would my max contribution still be ,000 no matter what?

    If the answer to my main questions in NO (I can’t make a future contribution to the IRA), would I just be better off consolidating the IRA account INTO my new profit-sharing retirement account if I can’t make any future contributions to it, instead of just keeping only 00 in it until I retire? I guess my main question boils down to the issue of whether or not you can make future contributions to a traditional IRA (an employee acct) AFTER you become self-employed. Thanks!

    • ANSWER:
      Yes. Contribution limits are 100% of earned income or ,000 (under age 50), whichever is less. According to IRS Pub. 590, your IRA contribution limit is reduced only by any contributions to a section 501(c)(18) plan (generally, a pension plan created before June 25, 1959, that is funded entirely by employee contributions).

      Your contribution, however, may not be deductible given your active participation in a company retirement plan and if your income exceeds certain levels. If this is the case, and your income precludes you from funding a Roth, as well, you can fund the Roth through the “back door.” Contribute to your traditional IRA, then “convert” it to a Roth, since the income limitations for conversions were lifted.

      Hope that helps.

      PLEASE VOTE to avoid a TIE. On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your “Best” Answer. We really appreciate it.

      DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

      Retirement Guru, CFP®, EA, BCE, CFS, AAMS
      Certified Financial Planner™ Practitioner
      Enrolled Agent | Admitted to Practice before the IRS

      ‘Providing sound Retirement and Estate Planning Strategies since 1985′
      Source(s):
      One of only 1,691 professionals in the country who holds both the CFP and EA designations (CFP Board: July 2009). In practice over 25 years

19. QUESTION:
    SEP IRA for self employed, what happens if I stop working?
    I’m 27, currently doing some independent contract work and bringing in only about ,000 a year. We save through my husband’s retirement plan, however, I was thinking about opening up a SEP-IRA for tax purposes. My question is with a SEP, what if I stop working completely for a few years, which is the plan for when we start having children. Would we still be able to contribute to it or would I be, for lack of a better term, “locked out” until we draw on it at retirement?

    • ANSWER:
      You can contribute to a retirement plan based only on earned income from wages or other self-employment income.

      Good job of planning for when you have kids. You’ll be a great mom.

20. QUESTION:
    What would you do if you had NO money for retirement?
    I have a few friends in their 40s and 50s with no retirement plans whatsoever. They tell me they live check to check and every cent is spoken for. Checking account <00, no savings account. One is self employed so can't have employer funnel contributions before being paid.

    How can they live later on? Will they be homeless, or can they get subsidized housing? What about food? Social Security is a pittance and will likely be going down, not up, so I am wondering what will happen to these people when they can't work any more.

    • ANSWER:
      These are people who will have to work until they die. Unless they are planning on a nice inheritance, which may never come because the family member may spend it all on long term care, then they will have no choice but to work. They may “think” that every cent is spoken for but I doubt that it really is. Do they have car payments? Sell the new car and buy used. I never buy new cars because they lose so much value. I only buy used cars and I always pay cash. I just bought a fully loaded 2003 Ford Taurus last week for less than K.
      Are they having lunch out every day? Bringing your lunch can save you hundreds of dollars every year. Do they shop with credit cards? How much debt do they carry? All of that debt costs interest that must be paid. That interest payment could be going into savings instead. Are they always wearing the latest fashions? How often do they go out to dinner? Or order pizza? Or go on vacation? It is all a matter of the choices we make.
      The decision to “pay yourself first” is the most important. After that you just need to make your budget fit the rest of your income. Never spend more than you make. If you can’t pay cash for it, you probably don’t need it. Making a budget is also important. The budget should be made the week BEFORE the paycheck comes. Every penny of income should be accounted for in the budget with saving, food, utilities, and housing being the first four items. Those are the only “must haves” or “needs” in the budget. Everything else is a “want” and a person has to want to save money or they never will. It will probably mean cuts but do you really need to get your nails done every week? What about twice a month instead? That is another that could go for retirement. Do you have to get a latte every day? What about twice a week instead? Or once a week as a special treat? After all, isn’t – per week (00-00 per year) a lot to spend on coffee? Wouldn’t that 00 compound beautifully tax free in a Roth IRA? Do you have to pay to get the car washed every week? Washing it yourself not only saves money but is good excercise.
      Your friend who is self employed has the best opportunity to save because business owners have so many more options to put away more tax free and tax deferred money than us mere wage slaves.
      I’m sorry, I digressed from your questions.
      1. They will live on much less because they saved much less.
      2. Unless they paid off their home and can afford the taxes then they will have to sell their homes.
      3. They will not be able to get subsidized housing because of the money they have from selling their home. They will have to “spend down” that money first.
      4. Food stamps are possible and there are always the church “pantry” food give away programs and soup kitchens.

      It is not a very pretty picture is it? But it all comes down to choices.
      A 25 year old who contributes ,000 per year (6.67 per month) to a Roth IRA averaging an 8% per year return will have .3 million tax free at age 65.
      A 45 year old who does the same thing will haev 7K tax free while a 55 year old will have K tax free. The magic of compounding interest at work.
      The moral of my story is Save Early and Save Regularly.

21. QUESTION:
    Opened new Sim IRA for rollover from empl retiremnt plan Did not roll Get mnthly chk How use IRA?
    Married Age 58 Husband self employed No retirement Plan
    Did not deposit anything into the simple IRA when I opened it in January 2007. So it sits there with a zero balance. Should I put in after tax dollars from my pension check? Before Tax dollars from husbands business? Can I use it at all?

    • ANSWER:
      after tax money out of you check!!!

22. QUESTION:
    Individual 401k – Solo 401k – SEP IRA?
    I’ve recently become self employed and have a 401k at my old job. I just started doing research on self employed retirement plans like the SEP IRA and individual 401k. I found some good information about them here http://www.individual401k.com

    From reading information about them the Individual 401k and SEP have the same limits ,000 but with the individual 401k you might be able to contribute more at “identical income levels”. Here is a quote from their website.

    “Compared to other retirement plans you may be able to make greater contributions at identical income levels, therefore maximizing retirement contributions and valuable tax deductions.”

    Has anyone else set one of these retirement plans up? Should I setup a SEP IRA instead of an Individual 401k? What are the main things I should be considering when I make my decision?

    Thank you for any information you can provide about the SEP IRA or Individual 401k to someone who is self employed.
    JT

    • ANSWER:
      JT this is probably what you need to help you. It explains the differences pretty clearly.

      http://www.taxalmanac.org/index.php/SEP_IRA_versus_Solo_401k_/_Individual_401k

      SEP IRA versus Solo 401k / Individual 401k

      Introduction:

      Are you still recommending a SEP IRA as a retirement plan to your self employed clients? I’m guilty of that too until I learned about how some of my clients could benefit from the Individual 401k (sometimes called a Solo 401k) as an alternative to a SEP IRA. A SEP IRA is a good choice for some self employed clients, but in other situations an Individual 401k provides a larger contribution / tax deduction versus a SEP IRA

      About the Topic:

      Individual 401k / Solo 401k plans are available to sole props, LLC and S and C corps. The advantage is in how the contributions are calculated. Also, a client that has an Individual 401k can have a loan, something they can not have in a SEP IRA. For example, I have had a client that left an employer and had a 401k, rolled over their 401k into an Individual 401k and then borrowed ,000 to finance the startup of his business. There are no income or credit qualifications of getting the loan and interest is paid back into their own 401k.

      Contributions SEP IRA versus Individual 401k / Solo 401k

      In the example below the client is age 55 will have 0,000 net income in 2006 as a sole prop.

      SEP IRA – max contribution would be ,587

      Individual 401k – max contribution would be ,000 + ,587 = ,587.

      Before I knew of the benefits of the Individual 401k I would have recommended a SEP IRA and would have left a ,000 tax deduction on the table.

      Not every client can make a contribution greater than the ,587 permitted in a SEP IRA in this example, but for those clients that can an Individual 401k is clearly more advantageous. Also, a very interesting point is the benefits can be doubled for a husband and wife both working for the business and each with 100k net income would be able to contribute a total of ,174 to an Individual 401k.

      Summary:

      An Individual 401k may provide your clients with a greater tax deduction and retirement contribution when compared to a SEP IRA. Also, an Individual 401k allows a loan that can provide a financial cushion or can help finance the startup of the business. I have had clients setup retirement account at this firm and have become knowledgeable about these retirement plans by reading the information on http://www.individual401k.com

23. QUESTION:
    what is the best retirement plan for 48 yrs old ?
    Hi i want to start retirement plan but i don’t know which one to choose. I am 48 years old and self employed. I don’t have much saving and i would like to avoid taking too much risk.
    thank you

    • ANSWER:
      So you’re pushing 50, and want to invest without too much risk?? Then you should put 5k into an IRA, for both you and another 5k for your spouse. In additon to this, you should save another 10k into a savings or brokerage account. Saving 20k a year MIGHT give you a respectable retirement nest egg. Can you do this?

      Generally people begin saving for retirement in their 30′s (if not before). Waiting till you are near 50, makes saving for retirement very, very difficult. Especially if you are not able to put these large monies away.

24. QUESTION:
    What does author Richard Carlson in “Don’t Worry, Make Money” meant by not worrying about the market…?
    but instead invest in it? I quote him:

    “I believe that one of the closest things to a worry-free, wealth-building strategy is to invest, long term, in the stock market, preferably through your company 401K or, if you’re self-employed, your SEP. Why? Because historically, to profit from this simple, well-known strategy, it doesn’t matter in the short term if the market is going up or down. You win either way. There is absolutely nothing to worry about.

    Once you commit to the “don’t worry” attitude, you’ll chuckle as you notice how many people worry, every day, unnecessarily, over which direction the market is moving. “What a relief, the market is having a good day” and “Oh no, the market is down” are frequent comments, but in reality, they have virtually no relevance if you are investing for the long term.

    What is there to worry about? By implementing the “pay yourself first” strategy, by investing a predetermined percentage, such as 10 percent of your income to yourself (into high-quality, no-load mutual funds), you virtually guarantee that, over time, you’ll amass a small fortune. You simply put the money in, month after month, and leave it there.

    If the market is going up, your invstment is worth more money. Congratulations, you win. But if the market is going down, your next investment will afford you the luxury of purchasing more shares of stock at a lower price. Congratulations, you win again!

    To top off this worry-free, wealth-building strategy, you can get the federal and state governments to pitch in a third, or even more, of your total investment. By using a company retirement plan or self-employed SEP, you can deduct your contribution from your taxable income up to a certain maximum limit, saving thousands of dollars and reducing the out-of-pocket costs of your investment. Your tax adviser, or even a knowledgeable friend, can probably show you how simple it is to accumulate wealth using this strategy and how to maximize the government’s contribution toward your financial goals. The point here, however, is to show you that “don’t worry” is not simply a cliché. There are many worry-free, practical approaches to building your fortune; this is simply one of the best. As always, your external success begins with your attitude toward life.

    In very simple words, where and to whom do you go to to invest in the stock market. And what is a company’s 401K? I also don’t even know what is stock? Thank you so much for your time. Oh, and by the way, do you agree with this author?

    • ANSWER:
      I agree with Richard Carlson.

25. QUESTION:
    What do I need to do for self employed medical insurance?
    I am 43 I am married. My hubby has medical and I’m on his policy. He has retirement. I will be on his retirement. But he is 44 what happneds to me being self employed, if something should happen to him. Will I still get his retirement money? Will I still be covered medical? I am looking at an IRA account at the local bank next week. I have only been self employed for 5 years. I have worked for an employee up until now. I need help. I need to plan for the retirement years. Thank you for your time. Plus we both have life insurance incase of death. If he goes first I’ll have money to pay for the house. But what then? By the time I’m too old to work how will I buy things?

    • ANSWER:
      insurance marketing Expert Find the best insurance quotes

      http://www.theinsurancegroup.blogspot.com

26. QUESTION:
    How much of 403B and 401A are tax deductible?
    I have two retirement plans from my company. One is the 403B to which I contribute maximum of ,000. Another is the 401A plan which I contribute also maximum amount of .000.

    Are both pretax and tax deducible? From my pay-stub, they are contributing to them but now 100% deducted, I don’t think.

    Seems like a lot of money that I can save for retirement compared to when I was self employed!!

    • ANSWER:
      those plans are limited to the amount you can contribute to reduce your current amount of withheld income tax and taxable income
      self employed retirement plans are also limited to amounts, you can’t just go hog wild, there limitations for a reason

27. QUESTION:
    How come I can contribute so much to my retirement account?
    I have two retirement plans from my company. One is the 403B to which I contribute maximum of ,000. Another is the 401A plan which I contribute also maximum amount of .000.

    Are both pretax and tax deducible? From my pay-stub, they are contributing to them but now 100% deducted, I don’t think.

    Seems like a lot of money that I can save for retirement compared to when I was self employed!!

    Oh, I also contributed already to my non-deductible IRA of ,000.

    So that would mean I would be putting in total of ,000 into my retirement accounts.

    • ANSWER:
      I think you are confused. 403b plans cannot be offered by companies that offer 401k plans, and vice vera.

      That said, “a lot” of money is relative to income. Generically speaking, saving 7% of your income for retirement (only) is a necessity. 10% is a good idea. 25% is “a lot.”

      If you make more than 0,000 a year (a least a million households in the US do), 7% is at least ,500 and 25% is at least ,500.

28. QUESTION:
    Can I contribute to a Roth IRA if I am self-employed and have a NOL?
    I am self-employed and had a net operating loss and carry back on my taxes last year. This year, I expect to be in the same situation – I have brought in some income but my expenses out weight my income.

    Since I am in my 30s and have next to no retirement funds, I have done some research and really like the Roth IRA. The contribution rules state that I must have “earned income” in order to contribute and in some places I read they also talk about my adjusted gross income (AGI). I will have no income to report on 1040 line 7 and line 12 Schedule C I expect to be a negative number (Net Loss).

    Does this mean I cannot contribute to a Roth IRA? I have small hopes that the number I really should be looking at is line 1 of schedule C as my earned income instead of line 31 of Schedule C.

    If I cannot contribute to a Roth IRA, what is the next best option to save for my retirement when I have a net loss?

    More information that may or may not help: I am single but being supported by a same-sex partner while I get my business going. Due to same-sex discrimination I cannot use my partner’s income to contribute like DMOA spouses can. I have an old 401k (only 10k) under my old employer that I’ve been told I need to rollover at some point. I’ve also looked into a SEP-IRA but it requires net profit and even then I can only contribute 18.6% of the net profit (I am many years from being able to put much money into one of these!). Due to my medical issues, our plan is for my personal business to just be our supplemental income so I will only work part-time in the long term. This might mean I will probably be limited for retirement contributions even if I reach my current business goals.

    • ANSWER:
      It’s true. You need “earned income” (wages, NET self-employment income, etc.), or surprisingly, alimony, to fund a retirement plan like a Roth IRA, SEP-IRA, or Traditional IRA. Your regular and Roth IRA contribution limits are 100% of earned income or ,000 (,000 age 50 and older), whichever is less. SEP-IRA limits are 20% of (net self employment income less 1/2 of self- employment tax), or ,000, whichever is less. Other retirement-planning investment options could include:

      1. Annuity (Variable or Fixed). Much like a non-deductible traditional IRA, earnings, if any, grow tax-deferred until withdrawn, and a 10% IRS early-withdrawal penalty may apply to earnings withdrawn prior to age 59 1/2. No contribution limits except those that may be imposed by the insurance company.

      2. Mutual Funds and/or Brokerage Account. If you’d like to avoid probate at your death, you can title these as Transfer on Death accounts with one or multiple beneficiaries.

      Find a strategy you can embrace and invest systematically, monthly, for example, regardless of all the “noise” you’re bound to hear in the media.

      Hope that helps.

      On behalf of all of your responders, who take the time and effort to help questioners in this free Yahoo! community, THANK YOU in advance for taking the time to choose your “Best” Answer. We really appreciate it.

      DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances

      Bradley Mann, EA, CFP®, BCE
      Enrolled Agent | Admitted to Practice before the IRS
      Certified Financial Planner™ Practitioner

29. QUESTION:
    my employer doesn’t sponsor a 401k plan, how do i take tax advantage for my retirement?
    I’m not self-employed, and other than IRA is there any other tax advantage pension plan for me?

    • ANSWER:
      If you mean by tax advantage, tax deferred, then a deferred variable annuity could be an option. Unlike a 401 (k) or an IRA, it does not have a limit. But find one with very low fees because most have high fees and have to be held at least 20 years for the earnings to outweigh the fees. But they do provide income for life after age 59.5.

30. QUESTION:
    Problem on annuity. No clue how to work problem please help!!?
    A self-employed person has a Keogh retirement plan. (This type of plan is free of taxes until money withdrawn) If deposits of 00 are made each year into an account paying 8% compounded annually how much will be in the account after 20 years?

    Is there a program i can plug into my ti84 calc for this problem? if so what is it? or if not how to solve algebrically? Please show your work thanks.

    • ANSWER:

31. QUESTION:
    Which retirement plan fits best?
    My husband is a self employed truck driver(New Orleans,Louisiana)! He’s owned and operated this business for 4 yrs. His AGI is currently 000.I am an at home mom! We’re currently looking to purchase another(18 wheeler) truck this yr.Therefore,his AGI will increase with the purchase of a second truck. We’ve been putting off opening a type of retirement account for him because Im not sure which one fits,I was leaning towards a ROTH Ira, but Im still unsure! I’ve read about a few but……..Im still unsure! Does anyone have any suggestions?

    • ANSWER:
      you say his income will be going up …will it be going over 6,000? (assuming you file jointly). If not, the Roth is really a good deal for most people. You can take out your contributions at any time, which is good because you might have an emergency and need to pull out some cash. You don’t say if you own a home but you can also use up to ,000 in earnings tax-free towards a house if you’re a first-time home buyer. And unlike other retirement plans, with a Roth you aren’t held to any particular schedule for taking out distributions when you reach retirement age.

32. QUESTION:
    Help!!!!!!!!!!! multiple choice question ?????????
    (1) Which of the followingwill pay a higher rate of interest?
    (A) 8.10% with an 8.25% APY (B) 8.00% with an 8.71% APY
    (C) 8.50% with an 8.66% APY (D) 8.70% with an 8.70% APY

    (2) Which of these is a retirement plan designed specifically for self-employed people?
    (A) 401(k) plan (B) traditional IRA (C) Roth IRA (D) Keogh plan

    (3) In an initial public offering, investors buy shares
    (A) directly from the company (B) at a stock exchange
    (C) through the Securities and Exchange Commission
    (D) from anyone who wants to sell their shares.

    (4) Over-the-counter stocks are traded through the
    (A) New York Stock exchange (B) Nasdaq Stock Market
    (C) American Stock exchange (D) Chicago Board of Trade

    THANK YOU!!!!!!!!!!!!!!!!!!

    • ANSWER:
      1. B. 8.71% APY
      2. Keogh
      3. B. Technically, they are bought from the company, underwritten by a broker and at a stocke exchange.
      4. None of the above. Stocks that are traded over the counter are not traded on any formal exchange. That’s what makes them OTC.

33. QUESTION:
    Best Investment Choice for College Student?
    I am 21 years old, and am currently self-employed and plan on being so for a very long time. So, since I will never have a 401k or anything like it from an employer, I have been trying to find a good way to start saving for retirement now. I can only afford to put away about a month, and have been looking into IRA’s but I’m having trouble understanding the differences between the Roth and traditional. Can anyone explain the differences in layman’s terms and how they affect my yearly taxes and what not…Thank you!

    • ANSWER:
      Go to the page at wikipedia for Roth IRAs. http://en.wikipedia.org/wiki/Roth_ira

      Other sources present the same information. Basically, you cannot deduct deposits from income taxes for a Roth, but you do not have to pay taxes on the earnings either. In a normal IRA, you can deduct the deposits but you have to pay income taxes on your earnings. I have tried to make a formula to decide the intersection point of earnings, but have been unable. Anyway, since you are still young you should probably go with the tax deferred IRA, since the income taxes on a standard IRA will add up over long periods. You can begin distributions for both at 59.5. As long as you make under 100,000 (US) you can establish a Roth. I am turning 18 next week, and am opening my Roth then. Go to a few other sites as well to see the advantages and disadvantages of each, and see what is best for you. Good luck

34. QUESTION:
    What kind of savings plan is best for me?
    I want to start saving for retirement, and I want a plan that will allow me to automatically deduct a specified amount from my checking account every week or month. Preferably a low risk tax-deferred fund.

    I am in my mid 40′s and self employed. Any suggestions? Thanks

    • ANSWER:
      You can setup an IRA, Roth IRA, Simple IRA, or SEP IRA with nearly any investment firm and have $ direct deposited into the account each month/week/year. You’ll want to talk to your financial adviser and/or accountant about which one of those is best for your situation. Any of them will work to accomplish your tax-deferred retirement savings goal. The IRA will allow you to put money away and potentially deduct the amount from you taxes (personal money and personal taxes). You’ll end up paying taxes on the whole amount withdrawn in retirement because you never paid taxes on any of it. The Roth doesn’t allow for any upfront deductions, but you never pay taxes on the money assuming you use it it after age 59.5. The other two are similar to the IRA, but they are for business owners and might allow you to put more money away than a traditional IRA would.

      Good Luck!

35. QUESTION:
    IRS Tax Deffered Question,I’am a student refiling for grant.?
    What do these lines want?

    (1)Indicate in item 16 the ammount of 2006 income which represents payments to pension,retirement or savings plans.Include any IRA deductions and payments to self-employed SEP,simple,and other qualified plans.Also include payment to tax-deferred pension and savings plans.

    (2) Student and Spouses. Tax deferred payments.

    • ANSWER:
      Did you have a job in 2006 that had a retirement plan? Did you contribute to your employer’s retirement plan, or your own IRA? My guess is, you didn’t. So if you didn’t contribute to a retirement plan, then (1) is zero.

      Are you married? If not, (2) is zero. Not sure about (2) other than that, provide more info if you can.

36. QUESTION:
    If Social Security is enough, then why Create an Automatic Workplace Pension?
    Why not simply fix/ restructure the current Social Security System instead of creating more bureaucracy, more laws, more “social” programs”, and more government spending? The Social Security system was teh brainchild of the Democrats. If it isn’t working, why can’t they just fix it or admit the idea wasn’t complete/is failing?

    Why does Barry feel the need to impose even more government policy upon employers? Why does he insist on a Paternalistic government that forces his own views of “what’s best for the people” [i.e. forcing Employees to be in a savings plan] ??

    From Body Odor’s policy plan:

    ” Create Automatic Workplace Pensions: Currently, 75 million working Americans – roughly half the workforce – lack employer-based retirement plans. Even when workers are given the option of joining
    employer-based plans, many do not take up the option because it requires considerable work to research plans
    and investment portfolios, and enroll in the plan. Barack Obama’s retirement security plan will automatically
    enroll workers in a workplace pension plan. Under his plan, employers who do not currently offer a retirement
    plan, will be required to enroll their employees in a direct-deposit IRA account that is compatible to existing
    direct-deposit payroll systems. Employees may opt-out by signing a written waiver. Even after enrollment,
    employees will retain the right to change their savings levels, reallocate investment portfolios or end
    contributions to the account. Obama’s plan will give options to the self-employed and new small businesses to
    access new easy-to-enroll savings plans and direct the IRS to deposit tax refunds into those savings plans for
    people who choose to save some of their refunds. Under the Obama plan when employees change jobs, their
    savings will be automatically rolled over into the new employer’s system to ensure continued savings. Experts
    estimate that this program will increase the savings participation rate for low and middle-income workers from
    its current 15 percent level to around 80 percent.

    http://www.barackobama.com/issues/economy/EconomicPolicyFullPlan.pdf

    • ANSWER:
      I’ll answer some of the many points you have here:

      1) The reason for the failure of SS can be laid solely at the feet of Reagan, Bush and Clinton, who gutted the SS trust over the terms of their presidencies. The biggest failing (of many) of the George W. Bush presidency has been his inability to fix this problem, but the blame for the failure is bipartisan, I assure you.

      2) Obama’s employer pension plan is a horrible plan. The idea that it is “too difficult” to research investment plans is absurd – we’re talking about people’s retirement here. They should step up to the plate and take care of it. Rather, he should support more stock investment plans. Moreover, the “experts” opinion that the rate of people saving in plans will rise from 15% to 80% is a smokescreen – when one is forced to save in a certain plan, of COURSE the number of people saving will increase.

      (Incidentally, I am a card-carrying Democrat, but the ideas regarding retirement being thrown around by my party are a bit unnerving. Still, it’s better than the GOP’s idea that “If we don’t worry about it, it will go away!”)

37. QUESTION:
    How would YOU spend the money? Help me!?
    My father gave my husband and I ,000 for Christmas to use in any way on the following things:

    * retirement
    * college for our child (we have a three month old baby)
    * house payments
    * investments/stocks

    How would you spend it to make the most of it? I need some good, solid advice here.

    A little background to help in each category:

    * retirement – neither of us have retirement plans…I used to teach public school and have some set aside from that, but now am self-employed…

    * college for our child (we have a three month old baby) – we have ,000 saved so far in an account strictly for her college…so we HAVE started thinking about that…

    * house payments – our monthly payments are about 00 and we are doing fine (30 year mortgage) but could probably pay “on principle” and shorten our mortgage by several years…?

    * investments/stocks – my father strongly encouraged us to invest in some stocks, but my husband and I know nothing about that and are nervous.

    • ANSWER:
      This is an excellent question; I hope I find my self in this situation.

      From least to most important based on your data

      College education for your child. This is by far the least important. Every parent wants to provide for their child but college is something they can do for themselves. When the time comes and they need a little help here or there ok. Making sure you are taken care of to be there for them is more important. Infact you should take the 5k from your “childs” account and stick it in the ROTH IRA below. I know sacrilege but it’s what you should do.

      Paying down on your house. This could be a good idea. If you have a low interest rate, say 6% or less plus the tax benefits don’t do this.

      Investments/stocks and Retirement are almost one in the same.
      So here is how I’d split it.

      1st start an emergency fund in a www.emigrantdirect.com savings account currently at 5.05%. This gives you access if you need it with out going through a broker or the like. How much really depends on what kind of saving you already have and how much you make but let’s make it 00 for now and keep contributing every month till you get to 6 months worth of income.

      2nd Roth IRA for retirement. This is the most flexible type of retirement. How you invest it would be determined by your age and level of risk tolerance. However since you have a child you must be fairly young, under 45 so most should be in the stock market in various EFTs and/or mutual funds. Again let’s make it 00 and keep contributing every month.

      3rd investing in stocks. Now you could just add this last 00 to your Roth ira and be investing in stocks but you can do this. The key to the stock market is not timing. It is “buy and hold” and “dollar cost averaging”. Very few people make money trading so buy funds like Vanguard VTI that just try to mirror the market. Here is an article that will help shed some light, you by no means need to do this but it would be “safe” way to diversify.

      http://articles.moneycentral.msn.com/Investing/StartInvesting/StartInvestingWithJust100.aspx?page=1

      Dollar cost averaging is just buying stocks all the time, when they are up and when they are down. In the long run the market goes up.
      I use sharebuilder and not a broker to buy EFTs and Computershare to buy stocks. there are many others. I don’t like paying broker fees as I usually only have a couple hundred a month to invest and a commission usually is a 10% loss right off the bat.

      any questions you can email me click on my pic

38. QUESTION:
    Is Obama the only candidate with a flaud Universal Heatcare idea?
    John McCain believes that insurance reforms should increase the variety and affordability of insurance coverage available to American families by fostering competition and innovation.

    * Reform the tax code to eliminate the bias toward employer-sponsored health insurance, and provide all individuals with a ,500 tax credit (,000 for families) to increase incentives for insurance coverage. Individuals owning innovative multi-year policies that cost less than the full credit can deposit remainder in expanded health savings accounts.
    * Families should be able to purchase health insurance nationwide, across state lines, to maximize their choices, and heighten competition for their business that will eliminate excess overhead, administrative, and excessive compensation costs from the system.
    * Insurance should be innovative, moving from job to home, job to job, and providing multi-year coverage.
    * Require any state receiving Medicaid to develop a financial “risk adjustment” bonus to high-cost and low-income families to supplement tax credits and Medicaid funds.
    * Allow individuals to get insurance through any organization or association that they choose: employers, individual purchases, churches, professional association, and so forth. These policies will be available to small businesses and the self-employed, will be portable across all jobs, and will automatically bridge the time between retirement and Medicare eligibility. These plans would have to meet rigorous standards and certification.
    Hillary Clintons:

    * Affordable: Unlike the current health system where insurance premiums send people into bankruptcy, the plan provides tax credits for working families to help them cover their costs. The tax credits will ensure that working families never have to pay more than a limited percentage of their income for health care.

    * Available: No discrimination. The insurance companies can’t deny you coverage if you have a pre-existing condition.

    * Reliable: It’s portable. If you change or lose your job, you keep your health care.
    # Obama’s Plan to Cover Uninsured Americans: Obama will make available a new national health plan to all Americans, including the self-employed and small businesses, to buy affordable health coverage that is similar to the plan available to members of Congress. The Obama plan will have the following features:

    1. Guaranteed eligibility. No American will be turned away from any insurance plan because of illness or pre-existing conditions.
    2. Comprehensive benefits. The benefit package will be similar to that offered through Federal Employees Health Benefits Program (FEHBP), the plan members of Congress have. The plan will cover all essential medical services, including preventive, maternity and mental health care.
    3. Affordable premiums, co-pays and deductibles.
    4. Subsidies. Individuals and families who do not qualify for Medicaid or SCHIP but still need financial assistance will receive an income-related federal subsidy to buy into the new public plan or purchase a privat
    # ate health care plan.
    # Simplified paperwork and reined in health costs.
    # Easy enrollment. The new public plan will be simple to enroll in and provide ready access to coverage.
    # Portability and choice. Participants in the new public plan and the National Health Insurance Exchange (see below) will be able to move from job to job without changing or jeopardizing their health care coverage.
    # Quality and efficiency. Participating insurance companies in the new public program will be required to report data to ensure that standards for quality, health information technology and administration are being met.

    WHICH IDEA DO YOU PREFER???
    Sorry “flawed’ and it is still clear that most if not all of you did not read all three passages.
    China seems pretty happy.

    • ANSWER:
      Both the Obama and the McCain plans are flawed.

      I am a cancer survivor and the ONLY plan that will result in me getting health insurance is the one of Hillary Clinton.

      Mike W
      Tulsa+
      Who does not now have any health insurance

39. QUESTION:
    How am I doing as far as financially and for retirement?
    I am 51 years old Internist making about 0,000 a year in a very stable group practice.

    I have about 0,000 in SEP IRA and regular IRA when I used to be self employed. Most of it are in Vanguard Target retirement fund 2025.

    My home is completely payed off and worth about 0,000.

    I contribute max to my current 401K, and have about 0,000 in cash.

    I have no kids and divorced. No alimony. I have zero debts.

    How am I compared to other 51 year olds?

    Will I be OK for retirement when I’m 65? I’m planning to keep working part time after 65 as well.

    Thanks for any input. Current economic condition has me a little bit scared.

    • ANSWER:
      i think you are fine, your house is paid off, you have savings or cash that you can get too if you need it, but do you seriously see yourself going through the 300k in a year? cause i really wouldn’t think so on top of that you still have 14 years to retirement because you are making fairly good money and your house is paid off that’s a bill that the money can be earmarked for your savings..i think you are doing great and hope to be near that mark in a few years….the first answerer obviously has quite a higher standard of living…but as long as you aren’t planing on being her neighbor…carry on….

40. QUESTION:
    Should students be required to take finance classes in school?
    With the economic situation the way it is, and more and more people being deeper in debt, should schools start providing finance classes in school?

    Working in the financial field myself, I see on a daily basis how people don’t really have any idea of how important it is to plan for the future, and most of those who think they have planned, haven’t really prepared properly.

    What do you think? Do you know how to lay out a monthly budget? How to invest for your retirement, whether an IRA, 401(k), or other retirement system? Do you understand how to utilize the system to receive the most tax breaks possible?

    95% of America has 5% of the total money available in America. These people consist of employees and those who are self-employed. The other 5% have the remaining 95% of the money, and are business owners and investors.

    So do you want to work for your money, or have your money work for you?

    • ANSWER:
      YES YES YES AND YES!!

      I firmly believe that their should be required financial classes given in both high school AND college if someone chooses to go to college.

      This is coming from someone who wishes they knew THEN what I know NOW. I was never taught enough about finances and ended up with too many loans, credit cards, etc.

      I think if I had been taught better, I would never had to have declared bankruptcy.

      Also now that I am finally getting my financial footing and getting the rest of my secured loans paid off…..I would like to start investing money but have no clue.

      This is why I wish I had had some sort of class in high school about banking, bills, interest rates, debt issues, etc.

      I watch Suze Orman religiously but still am clueless to the investment world.

41. QUESTION:
    Why do so many people hate the 5%ers of the world, perhaps a correlation with the hate for America?
    Politically, this country feeds off of what we do to the top five percent of the population, why we haven’t done more to them and/or how they haven’t helped out enough. Why the hate? Is this underlying hate due to jealousy or envy?

    Could this be the same reason why so many countries hate the United States of America which is theoretically in the top 5% for the world as are most citizens in it? Do the hates stem from the same feelings?

    If you look at the big picture, the economically successful five percent help pay for 70% of the budget for this government while the other 95% pay the other 30%. Why is this not enough. The few paying for the many, the strong holding up the the weak. The bottom 10% actually don’t contribute anything yet get money back from the government in the form of income credit.

    My business supplies this country with 10 additional jobs, those jobs allow my workers to feed and house their families. I pay their social security taxes, healthcare, give to their retirement plans, etc. However, I am thought as the big bad rich guy. Why is this? Is it because I took a risk and made something of myself in this life and have also supplied that success to 10 other people? What have you done? I am all for taxes to help this government in basic needs but how far can we lean on the “supposedly rich” before they break. I already have friends who have fired all their employees and just work for themselves because they actually can not afford to be rich anymore (being self-employed paying your own insurance, ss, medi, income, etc.) I just can’t afford to give you guys jobs anymore. When will America learn that it can not continue to lean on the self-employed businessmen who supply this country with the most jobs. Too many are already revolting and living the free ride out with their nest egg. How many are to follow?

    • ANSWER:
      Great question Todd, Envy of those that have by those that have not has been around for ever. We live in a society of victims that have been convinced that you are the reason they are not successful. It has nothing to do with the fact that they started having children when they were children, or that they are under educated, or lazy, etc. It is due to your evil rich people that take advantage of us and hold us under your thumb.

      Of course career politicians (also in the group of 5%’rs) keep their power base via reelection by relying on votes of the 95%’rs so they promise to go after the money of you evil rich people. To bad we don’t have a national sales tax instead of the IRS. That would more fairly spread the burden and have major changes in politics.

      I am not a 5%’er and most likely will never be. But I still strive to be and my envy is a source of motivation not anger. I for one am very glad people like you are out there creating opportunities no matter how difficult the government makes it for you.

42. QUESTION:
    Which online stock broker/trader is the best? I don’t have a lot of money and I am new to investing.?
    I’m self employed and do not have any kind of retirement plan (ie. 401K plan). I’m still fairly young, 29, but I don’t want to wait until I’m 40 to do something for my retirement/future. Maybe buying/trading stocks isn’t the right direction for me, should I look into other investments?? Thanks!

    • ANSWER:
      Open a Scottrade account, only 0 to start and commission. I suggest picking a few ETFs to start off the give good exposure to the global market with less risk.
      Some ETFs to consider
      IWM- Russell 2000
      EEW- Global stocks
      FXI- China
      SPX- S&P 500

43. QUESTION:
    If you voted for obama… are you?
    A are you… white(1), asian/hispanic(2), or black(3)
    B are you… self-employed(1), employed/retired(2), or unemployed(3)
    C do you have… a good retirement plan(1), working on your plan-but not there(2), no plan for retirement(3)

    1 = 1 point, 2 = 2 points, 3 = 3 points
    just post your total… I’m curious how many that have 3 points total voted for him
    scores please people… the scores, answering with no score or without all the answers isn’t what i’m looking for here
    there is no set up for failure, there is no pass/fail here…. just looking for the scores from honest answers please.

    • ANSWER:
      Total # 3… you got a problem with it?

44. QUESTION:
    Obamacare: does this mean that underachievers are now going to get health insurance?
    In my day you got health insurance by getting a full-time job w/ two weeks vacation, a retirement plan, a 40-hour work week….but now it appears that we’re now going to allow part timers, artists, musicians, self employed to be able to buy insurance on their own. This is an outrage? Since when does America reward deviants who opt out of the standard workforce? This may result in people working part time or leaving corporations. Why is this being allowed? Benefits should be tied to full-time employment as it keeps the workforce obedient and compliant, something that is good for our economy as people keep themselves employed and work to the fullest. My philosophy: you work less than 40 hours a week or take more than two weeks of vacation, you do not get health insurance/health care. It’s as simple as that.

    • ANSWER:
      I’m guessing you never heard of “private insurance” before; where people can purchase insurance (if they can afford it) directly from an insurance company. All “Obamacare” does is ensures that everyone CAN afford it, either through lower rates, or a subsidy.

      Please come back when you are properly educated on the subject. Or are you being sarcastic? It’s hard to tell.

45. QUESTION:
    How Do I Confront My Sister In A Positive Way?
    My sister and I are pretty close despite an age difference of seven years. We can talk about pretty much anything…accept how she borrows money from our mother.

    Let me give you a little background. My sister has a part time job, my brother-in-law is self employed (I think he “plays” too much and doesn’t put enough effort into his job, but that’s another subject). They have three kids.

    My sister and brother in law are really bad about borrowing money from Mom when they come up short at the end of the month and can’t pay all their bills, and they are bad about letting Mom pay for things like part of the kids tuition, or coats for the kids, or groceries to “tide them over”. (which they don’t consider borrowing because “she offered”)

    Now before you say I sound heartless let me point out that they DON’T live frugally. They go out to eat several times a week. My sister will go on shopping trips with her friends and spend money they really don’t have. My brother in law will take half a week off, when he should be working, and go hunting with his buddies. And then when they don’t have enough money to cover the bills, they go to my mom. And it’s not that they only borrow from her occasionally – it’s constant.

    My mom is 69. She teaches at a small private school with no retirement plan. At some point, she’s going to have to stop teaching and retire. And I worry about her and her finances when she doesn’t have a steady check coming in but my sister is still borrowing from her.

    I really do love my sister and I don’t want to drive a wedge between us or start a family feud. So HOW do I sit her down and tell her my worries and make her understand that the borrowing has got to stop without making her mad? Please help!

    • ANSWER:
      Before you attempt to talk to your sister..I would suggest you discuss this matter with your mother. You must remember…it’s your mothers choice to give her this money…but if your mother is not at all happy doing this ..then it would be better if she addressed the problem with your sister first.

46. QUESTION:
    things people put on resumes?
    1. I am very detail-oreinted.

    2. My intensity and focus are at inordinately high levels, and my ability to complete projects on time is unspeakable.

    3. Thank you for your consideration. Hope to hear from you shorty!

    4. Enclosed is a ruff draft of my resume.

    5. It’s best for employers that I not work with people.

    6. Here are my qualifications for you to overlook.

    7. I am a quick leaner, dependable, and motivated.

    8. If this resume doesn’t blow your hat off, then please return it in the enclosed envelope.

    9. My fortune cookie said, “Your next interview will result in a job.” And I like your company in particular.

    10. I saw your ad on the information highway, and I came to a screeching halt.

    11. Insufficient writing skills, thought processes have slowed down some. If I am not one of the best, I will look for another opportunity.

    12. Please disregard the attached resume-it is terribly out of date.

    13. Seek challenges that test my mind and body, since the two are usually inseparable.

    14. Graduated in the top 66% of my class.

    15. Reason for leaving last job: The owner gave new meaning to the word paranoia. I prefer to elaborate privately.

    16. Previous experience: Self-employed-a fiasco.

    17. Exposure to German for two years, but many words are inappropriate for business.

    18. Experience: Watered, groomed, and fed the family dog for years.

    19. I am a rabid typist.

    20. I have a bachelorette degree in computers.

    21. Excellent memory; strong math aptitude; excellent memory; effective management skills; and very good at math.

    22. Strengths: Ability to meet deadlines while maintaining composer.

    23. I worked as a Corporate Lesion.

    24. Reason for leaving last job: Pushed aside so the vice president’s girlfriend could steal my job.

    25. Married, eight children. Prefer frequent travel.

    26. Objective: To have my skills and ethics challenged on a daily basis.

    27. Special skills: Thyping.

    28. My ruthlessness terrorized the competition and can sometimes offend.

    29. I can play well with others.

    30. Personal Goal: To hand-build a classic cottage from the ground up using my father-in-law.

    31. Objective: I want a base salary of -,000 dollars, not including bonus. And some decent benefits. Like a retirement plan, health insurance, personal or sick days.

    32. Experience: Provided correct answers to customers’ questions.

    33. Education: Graduated from predatory school with honors.

    34. Never been fired, although it could happen anytime now.

    35. I have happily been a “kept man” for the past 10 years.

    36. Have extensive experience in turkey manufactures as well as new product development and implementation.

    37. I am accustomed to speaking in front of all kinds of audiences. I make points as well as I can.

    38. Personal: Five children. Dog: Jasper. Cat: Morris. Gerbil: Binky.

    39. While in military, was instrumental in creation of a treat detection system.

    40. My compensation package at my last job included a base salary of ,500 with excellent benefits including flextime. I am looking for a position in which I can work a more flexible schedule.

    41. Hire me and you won’t regret it – I am funny, cute, smart and creative… really.

    42. Referees available upon request.

    43. Previous rank: Senior instigator.

    44. I have recently sold my home and I now live in a large RV so I will be able to relocate quickly.

    45. Reason for leaving: They stopped paying me.

    46. Cover letter: Desire the chance to showcase my delightful personality, intelligence and superior judgment, which are so hard to find these days.

    47. Personal achievements: Successfully played “Chop Sticks” on a toy piano with my big toes.

    48. Objective: To obtain a position where I can make a difference, infecting others with my professionalism, enthusiasm and dedication.

    49. Strengths: Impersonal skills.

    50. Special interests: I like any projects that are fun.

    51. Please explain any breaks in your employment career: 15 minute coffee break while working at a home improvement store.

    52. Vocational plans: Sea World.

    • ANSWER:
      very cute! i almost didnt get the first few…had to read over! love these list things!
      thanks!

47. QUESTION:
    How should I set up my retirement investing program.?
    Hello fellow members. Need just a bit of advice. My company just canceled our 401(k) plan due to low enrollment and higher expenses. I didn’t have a lot in there around 4k, as we paid off a cargo plane load of debt in the last couple of years.

    I plan to open a Roth IRA and contribute the max to it. What would be my best choice of investments to look at. Should I use a discount broker like Scottrade? I am married, my wife is self employed, owns her own cleaning business. We only have our mortgage as debt, around 114K, both cars are paid off.

    After I max my Roth IRA, what would be the best investments for us. We are 48 years old and with no other debt but the house we should be able to save around a min. of 1K per month or so. Where in the very smart people of this forum should we invest our Roth IRA and the money outside the IRA.

    • ANSWER:
      A discount broker such as Scottrade does provide the most flexibility for your Roth IRA. But in order to take full advantage of it you will need to spend some time researching investments and you may or may not enjoy doing all of that work. Another option to consider is transferring the money to a diversified mutual fund company such as Fidelity, T Rowe Price or Vanguard. Each has a diverse selection of mutual funds that you can choose from including no brainer target date retirement funds.

48. QUESTION:
    How can I save for a house, retirement, and child’s educations simultaneously with a low income?
    I’m 29, with a 3 year old son. I’m a single mother. I am currently self-employed as an independent contractor. I made about 38292 last year. I started putting money away into my savings account to save for an IRA by the time I’m thirty. I am still researching on how to invest on my IRA (ETFs, Mutual Funds, etc). I want to buy a home. I also have about 4k saved for my son’s college education. I had done some reading about the tax braket that I’m in and it suggest that I depend on financial aid for him and not invest in the college plan 529, so I wanted to save some cash to help him pay any loans he may have after graduation. My real question is: how do I save for a home and try to max my ROTH IRA simultaneously? Any tips or ideas will be greatly appreciated. What kind of account can I put my home savings into that will accrue good interest. Thanks in Advance

    • ANSWER:
      Finally – someone smart.
      I do not like 529′s for college – especially in low tax brackets.
      Your money is best put in an IRA – or towards your mortgage.
      This is called “hiding money” – something to your advantage – very smart.

      There are seminars that will charge you thousands for this information.
      Look at the FAFSA – google it.
      They only look at taxable accounts (529′s also included since it’s meant for college).
      They do not look at your paid off cars, house, and retirement accounts.
      Google EFC calculator – Estimated Family Contribution
      Play with those numbers and learn, learn, learn the majic of getting your kids in college for free.

      With little in taxable accounts your child will get grants (no need to pay back) and student loans at low rates that are not due until he/she graduates – you could pay off these loans for him.
      This is how the rich get richer – you will have a good future.
      It’s not how much you make – it’s how smart you are with money.

      Google Charles Schwab or Fidelity Investments.
      I think Schwab only requires ,000 for a ROTH.
      Before doing this – I want you to have 6 months worth of living expenses put away in a savings or a cd that you can break in case of an emergency.
      Do NOT invest – unless you have this.
      Then, I would pay off a car and any other debt.
      Then, if you have a mortgage – I would make extra payments towards principal.
      See if you can get that house paid off by his Junior year of HS.
      ———————
      If you don’t have a will – make one.
      Go to a bookstore and get Quicken Wills and Trusts.
      It will have a Cd in it – input your info – and print it out.
      Take it to a notary and put it in a fire proof safe from walmart.
      Tell a family member where it is or send them a copy of it.
      Today, call all your banks and make sure you have a beneficiary for all your accounts.
      /

49. QUESTION:
    FAFSA QUESTION HELP PLEASE & THANKYOU?
    Good Morning Sir/Madam,
    For quite literally some days now, my brother and I have been scrambling our brains trying to figure this stuff out. We’ve even been to the US Embassy and back having received little help if any at all as well as to our SAT teachers. And the Live chat representatives simply keep singing the same tune “just answer to the best of your ability.” It would seem the form used in the US differs from that of the country in which we presently reside (Tobago). My brother and I at the moment are completely out of our leagues with this stuff.
    Extenuating circumstances pertinent to our specific situation at present are as follows:
    Our Mother was not married to either of our fathers prior to our birth after which at some point in both scenarios they separated. My mother, my father and my brother’s father are not American. My brother and I are however we’ve lived in Trinbago for quite sometime and have Dual Citizenship. I am 18yrs old, my brother is 19. We both live with our single parent mother. In 2004 she married. Our stepfather who is not American, he does not now nor has he ever had a job. Our mother is the sole breadwinner in the house. My brother’s father pays child support. My father no longer pays child support as of 2011, and remains a fugitive so as to prevent extending the duration of these payment whilst i continue studying. At present our Mum has given her most recent income tax documentation and a pay stub which seems to be for the year 2009.

    This is the 2009 Tax Form. http://localhostr.com/file/LMjWQ4V/blahblaa.jpg
    This is the 2009 Pay Stub. http://localhostr.com/file/tfX0rHW/blahblabah.jpg

    Using the aforementioned documents I have been somewhat assuredly able to identify..:
    the $______.00 Wages, salaries, tips, etc… as the GROSS EARNINGS 336
    the $______.00 Interest Income as $ 0
    the $______.00 Dividends as $ 0
    the $______.00 Other taxable income as $ 0
    (alimony received, business and farm
    income, capital gains, pensions,
    annuities, rents, unemployment
    compensation, social security, railroad
    retirement, and all other taxable income)
    the $______.00 IRS-allowable adjustments as Total Deductions 704
    to income (payment to IRA and Keogh Plans,
    one half of self employment tax, self-
    employment tax, self-employed health
    insurance deduction, interest penalty on
    early withdrawal of savings, alimony paid,
    and student loan interest deduction)

    In truth, I think I’ve got it though I can’t be sure…
    The alarming amount of zeros I’ve entered has raised concern as to whether or not I have accurately answered these questions. As a result I’m hoping that you are able to verify my answers or perhaps correct any mistakes I’ve made thus far so that I may complete this as accurately in a timely fashion.

    Could anyone help by pointing out the correct amounts for the income estimator page:
    This is the 2009 Tax Form. http://localhostr.com/file/LMjWQ4V/blahblaa.jpg
    This is the 2009 Pay Stub. http://localhostr.com/file/tfX0rHW/blahblabah.jpg
    $______.00 wages, salaries, tips, etc.
    $______.00 interest income
    $______.00 dividends
    $______.00 other taxable income (alimony received, business and farm income, capital gains, pensions, annuities, rents, unemployment compensation, social security, railroad retirement, and all other taxable income)
    $______.00 IRS-allowable adjustments to income (payment to IRA and KEOGH plans, one half of self employment tax, self-employed health insurance deduction, interest penalty on early withdrawal of savings, alimony paid, and student loan interest deduction)

    This is our first time filing the FAFSA and any assistance provided would be of great help to both my brother and I. We’re really desperate by this point if you couldn’t tell. And quite literally have no one to turn to for guidance regarding stuff of this nature and of the two of us only one is a business student hence the task of filling both forms has landed on my shoulders…

    Thanking you in advance for your assistance.

    - 1 of 2 Confused College Hopefuls…

    • ANSWER:
      Those two zeroes after the decimal point represent cents (hundredths of a dollar), and are not used. Round numbers to the nearest dollar. Use the US version of the form, and convert non-US dollar amounts to the equivalent in US dollars.

      If you and your brother are US citizens, you are required to file annual income tax returns if you meet IRS filing requirements for income. The US taxes worldwide income from all sources whether you live in the US or not. If neither you nor your brother have had any income of any kind from anywhere yet, since you are presumably students, then you would not have filed. Note on your form that you have no income of any kind and have never to date met requirements to have to file income tax returns with the IRS.

      For the various categories of income, if nobody in the household has any income from the sources listed, put 0.

      Hope this is of some help. The financial aid office at your school is bound to ask for more info, so you might attach an explanatory note of some of this stuff.

50. QUESTION:
    I need some advise on preparing for the future.?
    Hello My husband is a commercial fisherman we’re a young couple and really nobody to turn to for advise. I want to know how I should plan for the future as far as keeping money, hes considered self-employed what happens when hes old ( social security, retirement checks) How does it work paying social sec. for self-employed? Also what about health insurance. I dont need life its covered but thats it. Thanks for the help

    • ANSWER:
      Get a financial advisor (who doesn’t make their living from products they promote) to get some guidance.
      Also consider starting your own business part time…..