How The Roth IRA Came To Be

Back in the olden days, if you wanted a secure retirement, you needed to rely on Social Security or perhaps a nice, fat pension. But those days are gone. There are not companies out there that are going to stand behind a defined annuity at the end of your career, no matter how long your years of service or how serious your level of dedication. But in 1997, the Roth IRA was conceived and an alternative to the traditional retirement account came into being.

The Roth IRA was named for Senator William Roth, a legislator from Delaware who first proposed the concept along with Senator Bob Packwood in 1989. Roth was a graduate of Harvard Business School and Harvard Law School, so it was clear that he knew his stuff. For the majority of his Senate career, Roth served as chairman of the Senate Finance Committee, so he had enormous knowledge of financial law and held great sway over the creation of new legislation.

The main innovation of the Roth IRA that departs from the traditional IRA is the tax structure and all the mobility of money that the tax structure allows. The Roth IRA is an individual retirement account, like the name indicates, that can be set up by a broker. You can also set up an individual retirement annuity as a Roth IRA, through an insurance company as an endowment contract.

These days, as a single person, you can contribute up to $5,500 to a Roth IRA per year. If you are over 50, you can put in $6,500. The merits of limiting Roth contributions are debatable, but that is for another, more political discussion.

When it was codified into law, in 1997, the Roth IRA was a piece of the Taxpayer Relief Act of 1997. Senator Roth wanted to bring back the traditional IRA, which was junked in 1986, along with its upfront tax deduction.

Basically it gives an individual the chance to contribute after-tax dollars to an IRA and then withdraw that money tax-free later in life. The contributions are not tax-deductible, like a traditional IRA, because they are after tax dollars. But the benefits of having that money tax-free in your 60s and 70s are enormous.

The annoying catch to all this is that Congress might end up changing the rules by the time you are 59 and a half. You might end up with a Roth IRA in your golden years, but the tax-free withdrawals may be a thing of the past. If you open a traditional IRA now, you can get the tax benefits right now, by deducting your contributions. If you decide on a Roth IRA, you are waiting years, sometimes decades, to realize the tax benefit, while assuming the risk that the rules around deductions might change in the coming years.

These decisions are always hard to make. Which is why it is essential to learn as much as you can about tax sheltered retirement plans and all the problems that might arise. The onus of education is on your. Might was well get started.

Escaping the Wrath of the Debt Demon

Wouldn’t it be nice to simply erase debt from your life? The problem with debt is that it is all-encompassing. It is not related to your financial life alone – it affects your social interactions, emotional well-being, and your livelihood. Debt places tremendous strain on all aspects of a person’s life.

This is precisely the reason so much emphasis is placed on debt management, debt mitigation, and debt consolidation. Several interesting statistics have been revealed vis-à-vis household debt in the United States. According to the Federal Reserve Bank of New York, total consumer debt amounted to $12.73 trillion at the end of Q1 2017. This debt was comprised of the following components:

  • 4% – mortgages and home equity loans
  • 6% – student loans
  • 2% – automobile loans
  • 6% – credit cards
  • 9% – other forms of debt

Clearly, the growing consumer debt burden is troublesome. The more money that goes towards debt repayment, the less personal disposable income there is with things like savings, and investment. The current debt level has now exceeded the high that was reached at the end of Q3 2008 – the height of the global financial crisis. Student loan debt is one of the most troubling growth components of the overall spectrum, racking up significant gains since 2003 when it accounted for just 3.3% of all debt.

The current statistics validate growing concerns that US debt levels are rising sharply, a bugbear in the nation’s road to recovery. It should be remembered that the US economy is comprised of 70% consumer-driven GDP growth. Much of this is debt-fuelled growth, as evidenced by the rapid uptick in credit card debt and expenditure.

Many leading economists are growing increasingly concerned about burgeoning debt levels – and for good reason. After the global financial crisis, banks and financial institutions began to rein in their borrowing. It became increasingly difficult for individuals and businesses to be approved for lines of credit. Since 2013 however, the American tendency to borrow money renewed in earnest.

Debt growth has increased sharply with rising student loan debt, today at $1.3 trillion +. According to the Federal Reserve Bank of New York, some 10% of borrowers are behind on their student loan repayments. However, student loan debt is significantly less than mortgage debt which is over $8.6 trillion.

Is There a Way to Deal Effectively with Credit Card Debts?

The quick answer to this question is yes. Credit card debt is one of the most difficult forms of debt to pay off, because of the high interest rates levied on credit card accounts. However, there are multiple solutions to the credit card debt dilemma, notably the following:

  • Transfer balances from high-interest credit cards to low-interest credit cards – this is possible if the transfer costs are low enough to make it worthwhile, and if the cost savings on the new APR are worthwhile.
  • Consolidate your debt – debt consolidation options are always possible if you have similar debt such as credit card debt and you have not yet defaulted on your payments. Apply for a debt consolidation loan at a lower interest rate, and with affordable monthly repayments to defray the expenses of high APR credit card debt. You can effectively pay off all credit card debt instantly, and be settled with a low-interest repayment plan on your new loan.
  • Manage credit card debt effectively – it is preferable to use credit cards with low APRs, plenty of rewards, and high cashback percentages. If possible, try to pay the balance of your credit card debt in full every month. Revolving credit can become problematic when you are paying interest on your interest.

Your Mattress is Putting You in Debt

There are many areas of our homes that cost us money. There’s the lights, devices, and other electronic equipment left on when not in use, which drives up the energy bill. There’s the air conditioning that’s being used when all that’s needed is an open window and a fan. Then there’s the refrigerator full of food that will go bad because you eat out too much or over buy at the grocery store.

Did you know that your mattress can also be a great thief of your money? Of course, this all depends on the age of your mattress but if you are looking at a bed that is well over ten years old, there are ample ways this mattress is costing you money in places you didn’t even think to look.

Sneezing?

Dust mites live in all our homes and they particularly love camping out in our mattresses. For those of us that have allergies these little guys can cause a great deal of disturbance when we are trying to sleep. More than $17,000,000 were spent by Americans on health care to reduce the swelling of their nasal passages and sinuses in 2010.

Consider replacing your mattress to a type or brand that has been proven to reduce the amount of dust mites you will come in contact with. Take these steps to ease both your allergies and your medical bills. Memory foam and latex are great contenders while coiled seems to attract the most mites due to the spaces available inside. If you want to know more about latex mattresses, check out these reviews for the best latex mattresses on the market.

Pain?

This is another area of expense that could be greatly reduced with a new mattress. Old mattresses tend to lose their form or get the coils misshapen due to natural wear and tear.  You either get poked in the back with the misshapen coils or you don’t get the support that you need when you sleep. Your shoulder and hips end up hurting if not supported well. A new mattress will help with your pressure points and provide your back and neck with the support.

Our suggestion is to hit a bedding store and try out the different kinds of mattresses available. There are innerspring or coil mattresses, latex, memory foam, and hybrids. Each has its good points and others have their not so savory characteristics.

There are firm mattresses, soft mattresses, and those that fall into the Goldilocks area of just right. Only you can tell what‘s right for you. Still, getting a new mattress means less pain on pressure point areas, less trips to the doctor, avoiding physical therapy, and less pain killers to pay for when the hip starts hurting.

With these ailments on the run you’ll find that you can save money which can be used to pay off any debt.

Up late?

Is your mattress keeping you up at night? If you are sneezing through the night or experiencing a great deal of pain in your hips, shoulders, neck, or back, then there is another way this mattress is costing you money other than medical bills. This would be in your lack of productivity.

Think about it for a moment. If you are not getting the sleep you need to be your best self the next day then you are most likely not performing at your peak when working. If your productivity lacks, over time, this can cost you money in sales, wages, or even a job if it got out of control. Of course, we a realize that few people out there would let their lack of sleep be the cause of their unemployment but we also know that things can get out of our hands easily.

Still sick?

An old mattress can wreak havoc on your immune system. This falls right back to the inability to get a good night’s sleep on an old mattress. A lack of sleep leads to a weakened immune system. This means you will get sick more often and we’ve already illustrated how health problems cost money and can be reduced with the purchase of a new mattress.

Gaining weight?

Have you noticed how your jeans or slacks are harder to button as of late? This could be the result of sleeping on an old mattress. Folks who sleep more, eat less. If you aren’t sleeping well and gaining weight this could lead to diet plans and the need to purchase new clothes. Losing weight can cost money, which might be a direct result of your bad mattress.

These are just a few problems with an old mattress and we hate to let this problem cost you more and more money. Mattresses are one of those areas where you need to invest money to save money, which is always a great idea especially where our health is concerned.

Cost Effective Ways to Redo Your Backyard

Many of us take pride in our possessions, and that includes our homes and backyards. Pride of ownership is a concept that means you will do your best to make sure things look their best. Making a backyard look good can sometimes mean spending thousands of dollars on furniture and lawn care. However, this does not have to be the case! You can make your yard look beautiful in cost-efficient ways! If you are interested in doing so, read on to find out some popular methods you can try out.

Make your own Furniture

Patio furniture can look great, but it can cost a ton of money from the store. If you have a way of making your own, while still having everything look good, go for it! If you or somebody you know has experience working with carpentry, this is a great start. You can obtain the materials cheaply, and then get to work building your dream patio set. As for upholstering the pieces, this is also a project you can do by yourself. Watch some videos online about basic upholstering to get yourself familiar with the idea.

Get a Timed Sprinkler System

Watering the lawn can be end up costing a lot of money in the long run. If you want beautiful grass without the high water bill, try installing a timed sprinkler system. It will only go on at certain times of the day, and therefore you will not be wasting water. If you do want to use a garden hose, try to find one that will last. This way, you will not need to replace it as often. Websites such as backyardboss.net has good examples of good quality garden hoses.

Make a Swing

Garden swings are beautiful and relaxing when you get a chance to use them. They allow you to enjoy the fine weather while admiring your backyard. However, garden swings can be quite pricy. You have the ability to make your own swing using an old chair. Although it would help again if you know someone who is familiar with carpentry, you can also do it yourself if you want. Check online sites for inspiration and instructions!

Substitute a Barbeque

Barbeques are great additions to backyards, but many of them come with hefty price tags. If you want to enjoy awesome barbequed food in your backyard but not pay a huge amount, try looking for a camping grill! These are smaller, portable versions of a grill, and they work just as well. You can do anything on them, from boiling water to grilling meat. You can set them up in the yard overtop of a fire pit. They are great because you can move them around if you want to put them someplace else, or store them for the winter.

Get a Splash Pad

If you are longing for a pool for your children to enjoy, try looking at a splash pad instead. They are far cheaper, and easier to maintain. As well, there is a minimal risk when children use them, as you do not need to worry about drowning. Splash pads could be a great addition to your yard because they are very unique. Chances are that you will be the only family on your block that has one! They are not just for kids, either. Splash pads can be enjoyed by the whole family on those hot, humid days.

Conclusion

Just because you do not have a huge budget does not mean that your backyard needs to suffer. You can literally do everything you want to it, even though it might be in a slightly modified way. Making your own patio furniture, getting a timed sprinkler system, substituting a camping grill for a barbeque and getting a splash pad are just a few of the many ways that you can improve your backyard. Take a look around and see exactly what it is that you are looking for. Then you can talk to your friends or look online for different ways to make those visions a reality for yourself! Anything is possible when you have enough motivation and determination to make it happen!

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How The Roth IRA Came To Be

investing in stocks with little money

Back in the olden days, if you wanted a secure retirement, you needed to rely on Social Security or perhaps a nice, fat pension. But those days are gone. There are not companies out there that are going to stand behind a defined annuity at the end of your career, no matter how long your years of service or how serious your level of dedication. But in 1997, the Roth IRA was conceived and an alternative to the traditional retirement account came into being.

The Roth IRA was named for Senator William Roth, a legislator from Delaware who first proposed the concept along with Senator Bob Packwood in 1989. Roth was a graduate of Harvard Business School and Harvard Law School, so it was clear that he knew his stuff. For the majority of his Senate career, Roth served as chairman of the Senate Finance Committee, so he had enormous knowledge of financial law and held great sway over the creation of new legislation.

The main innovation of the Roth IRA that departs from the traditional IRA is the tax structure and all the mobility of money that the tax structure allows. The Roth IRA is an individual retirement account, like the name indicates, that can be set up by a broker. You can also set up an individual retirement annuity as a Roth IRA, through an insurance company as an endowment contract.

These days, as a single person, you can contribute up to $5,500 to a Roth IRA per year. If you are over 50, you can put in $6,500. The merits of limiting Roth contributions are debatable, but that is for another, more political discussion.

When it was codified into law, in 1997, the Roth IRA was a piece of the Taxpayer Relief Act of 1997. Senator Roth wanted to bring back the traditional IRA, which was junked in 1986, along with its upfront tax deduction.

Basically it gives an individual the chance to contribute after-tax dollars to an IRA and then withdraw that money tax-free later in life. The contributions are not tax-deductible, like a traditional IRA, because they are after tax dollars. But the benefits of having that money tax-free in your 60s and 70s are enormous.

The annoying catch to all this is that Congress might end up changing the rules by the time you are 59 and a half. You might end up with a Roth IRA in your golden years, but the tax-free withdrawals may be a thing of the past. If you open a traditional IRA now, you can get the tax benefits right now, by deducting your contributions. If you decide on a Roth IRA, you are waiting years, sometimes decades, to realize the tax benefit, while assuming the risk that the rules around deductions might change in the coming years.

These decisions are always hard to make. Which is why it is essential to learn as much as you can about tax sheltered retirement plans and all the problems that might arise. The onus of education is on your. Might was well get started.

Escaping the Wrath of the Debt Demon

Wouldn’t it be nice to simply erase debt from your life? The problem with debt is that it is all-encompassing. It is not related to your financial life alone – it affects your social interactions, emotional well-being, and your livelihood. Debt places tremendous strain on all aspects of a person’s life.

This is precisely the reason so much emphasis is placed on debt management, debt mitigation, and debt consolidation. Several interesting statistics have been revealed vis-à-vis household debt in the United States. According to the Federal Reserve Bank of New York, total consumer debt amounted to $12.73 trillion at the end of Q1 2017. This debt was comprised of the following components:

  • 4% – mortgages and home equity loans
  • 6% – student loans
  • 2% – automobile loans
  • 6% – credit cards
  • 9% – other forms of debt

Clearly, the growing consumer debt burden is troublesome. The more money that goes towards debt repayment, the less personal disposable income there is with things like savings, and investment. The current debt level has now exceeded the high that was reached at the end of Q3 2008 – the height of the global financial crisis. Student loan debt is one of the most troubling growth components of the overall spectrum, racking up significant gains since 2003 when it accounted for just 3.3% of all debt.

The current statistics validate growing concerns that US debt levels are rising sharply, a bugbear in the nation’s road to recovery. It should be remembered that the US economy is comprised of 70% consumer-driven GDP growth. Much of this is debt-fuelled growth, as evidenced by the rapid uptick in credit card debt and expenditure.

Many leading economists are growing increasingly concerned about burgeoning debt levels – and for good reason. After the global financial crisis, banks and financial institutions began to rein in their borrowing. It became increasingly difficult for individuals and businesses to be approved for lines of credit. Since 2013 however, the American tendency to borrow money renewed in earnest.

Debt growth has increased sharply with rising student loan debt, today at $1.3 trillion +. According to the Federal Reserve Bank of New York, some 10% of borrowers are behind on their student loan repayments. However, student loan debt is significantly less than mortgage debt which is over $8.6 trillion.

Is There a Way to Deal Effectively with Credit Card Debts?

The quick answer to this question is yes. Credit card debt is one of the most difficult forms of debt to pay off, because of the high interest rates levied on credit card accounts. However, there are multiple solutions to the credit card debt dilemma, notably the following:

  • Transfer balances from high-interest credit cards to low-interest credit cards – this is possible if the transfer costs are low enough to make it worthwhile, and if the cost savings on the new APR are worthwhile.
  • Consolidate your debt – debt consolidation options are always possible if you have similar debt such as credit card debt and you have not yet defaulted on your payments. Apply for a debt consolidation loan at a lower interest rate, and with affordable monthly repayments to defray the expenses of high APR credit card debt. You can effectively pay off all credit card debt instantly, and be settled with a low-interest repayment plan on your new loan.
  • Manage credit card debt effectively – it is preferable to use credit cards with low APRs, plenty of rewards, and high cashback percentages. If possible, try to pay the balance of your credit card debt in full every month. Revolving credit can become problematic when you are paying interest on your interest.

Your Mattress is Putting You in Debt

There are many areas of our homes that cost us money. There’s the lights, devices, and other electronic equipment left on when not in use, which drives up the energy bill. There’s the air conditioning that’s being used when all that’s needed is an open window and a fan. Then there’s the refrigerator full of food that will go bad because you eat out too much or over buy at the grocery store.

Did you know that your mattress can also be a great thief of your money? Of course, this all depends on the age of your mattress but if you are looking at a bed that is well over ten years old, there are ample ways this mattress is costing you money in places you didn’t even think to look.

Sneezing?

Dust mites live in all our homes and they particularly love camping out in our mattresses. For those of us that have allergies these little guys can cause a great deal of disturbance when we are trying to sleep. More than $17,000,000 were spent by Americans on health care to reduce the swelling of their nasal passages and sinuses in 2010.

Consider replacing your mattress to a type or brand that has been proven to reduce the amount of dust mites you will come in contact with. Take these steps to ease both your allergies and your medical bills. Memory foam and latex are great contenders while coiled seems to attract the most mites due to the spaces available inside. If you want to know more about latex mattresses, check out these reviews for the best latex mattresses on the market.

Pain?

This is another area of expense that could be greatly reduced with a new mattress. Old mattresses tend to lose their form or get the coils misshapen due to natural wear and tear.  You either get poked in the back with the misshapen coils or you don’t get the support that you need when you sleep. Your shoulder and hips end up hurting if not supported well. A new mattress will help with your pressure points and provide your back and neck with the support.

Our suggestion is to hit a bedding store and try out the different kinds of mattresses available. There are innerspring or coil mattresses, latex, memory foam, and hybrids. Each has its good points and others have their not so savory characteristics.

There are firm mattresses, soft mattresses, and those that fall into the Goldilocks area of just right. Only you can tell what‘s right for you. Still, getting a new mattress means less pain on pressure point areas, less trips to the doctor, avoiding physical therapy, and less pain killers to pay for when the hip starts hurting.

With these ailments on the run you’ll find that you can save money which can be used to pay off any debt.

Up late?

Is your mattress keeping you up at night? If you are sneezing through the night or experiencing a great deal of pain in your hips, shoulders, neck, or back, then there is another way this mattress is costing you money other than medical bills. This would be in your lack of productivity.

Think about it for a moment. If you are not getting the sleep you need to be your best self the next day then you are most likely not performing at your peak when working. If your productivity lacks, over time, this can cost you money in sales, wages, or even a job if it got out of control. Of course, we a realize that few people out there would let their lack of sleep be the cause of their unemployment but we also know that things can get out of our hands easily.

Still sick?

An old mattress can wreak havoc on your immune system. This falls right back to the inability to get a good night’s sleep on an old mattress. A lack of sleep leads to a weakened immune system. This means you will get sick more often and we’ve already illustrated how health problems cost money and can be reduced with the purchase of a new mattress.

Gaining weight?

Have you noticed how your jeans or slacks are harder to button as of late? This could be the result of sleeping on an old mattress. Folks who sleep more, eat less. If you aren’t sleeping well and gaining weight this could lead to diet plans and the need to purchase new clothes. Losing weight can cost money, which might be a direct result of your bad mattress.

These are just a few problems with an old mattress and we hate to let this problem cost you more and more money. Mattresses are one of those areas where you need to invest money to save money, which is always a great idea especially where our health is concerned.

Cost Effective Ways to Redo Your Backyard

Many of us take pride in our possessions, and that includes our homes and backyards. Pride of ownership is a concept that means you will do your best to make sure things look their best. Making a backyard look good can sometimes mean spending thousands of dollars on furniture and lawn care. However, this does not have to be the case! You can make your yard look beautiful in cost-efficient ways! If you are interested in doing so, read on to find out some popular methods you can try out.

Make your own Furniture

Patio furniture can look great, but it can cost a ton of money from the store. If you have a way of making your own, while still having everything look good, go for it! If you or somebody you know has experience working with carpentry, this is a great start. You can obtain the materials cheaply, and then get to work building your dream patio set. As for upholstering the pieces, this is also a project you can do by yourself. Watch some videos online about basic upholstering to get yourself familiar with the idea.

Get a Timed Sprinkler System

Watering the lawn can be end up costing a lot of money in the long run. If you want beautiful grass without the high water bill, try installing a timed sprinkler system. It will only go on at certain times of the day, and therefore you will not be wasting water. If you do want to use a garden hose, try to find one that will last. This way, you will not need to replace it as often. Websites such as backyardboss.net has good examples of good quality garden hoses.

Make a Swing

Garden swings are beautiful and relaxing when you get a chance to use them. They allow you to enjoy the fine weather while admiring your backyard. However, garden swings can be quite pricy. You have the ability to make your own swing using an old chair. Although it would help again if you know someone who is familiar with carpentry, you can also do it yourself if you want. Check online sites for inspiration and instructions!

Substitute a Barbeque

Barbeques are great additions to backyards, but many of them come with hefty price tags. If you want to enjoy awesome barbequed food in your backyard but not pay a huge amount, try looking for a camping grill! These are smaller, portable versions of a grill, and they work just as well. You can do anything on them, from boiling water to grilling meat. You can set them up in the yard overtop of a fire pit. They are great because you can move them around if you want to put them someplace else, or store them for the winter.

Get a Splash Pad

If you are longing for a pool for your children to enjoy, try looking at a splash pad instead. They are far cheaper, and easier to maintain. As well, there is a minimal risk when children use them, as you do not need to worry about drowning. Splash pads could be a great addition to your yard because they are very unique. Chances are that you will be the only family on your block that has one! They are not just for kids, either. Splash pads can be enjoyed by the whole family on those hot, humid days.

Conclusion

Just because you do not have a huge budget does not mean that your backyard needs to suffer. You can literally do everything you want to it, even though it might be in a slightly modified way. Making your own patio furniture, getting a timed sprinkler system, substituting a camping grill for a barbeque and getting a splash pad are just a few of the many ways that you can improve your backyard. Take a look around and see exactly what it is that you are looking for. Then you can talk to your friends or look online for different ways to make those visions a reality for yourself! Anything is possible when you have enough motivation and determination to make it happen!