For those of us that are sports fans, both football and basketball drafts are once a year events that require a great deal of strategy and preparedness on the part of the drafting teams.  For example during the NBA draft, a team only has 5 minutes to decide what choice to make once they are “on the clock”.   Now something far more important is now on the clock – your IRA.

Less than ninety days separate almost 50 Million IRA households from a critical decision that may impact their retirement – and even their heirs.

It’s mostly about taxes.  If you have a SEP, Traditional, Simple IRA¹, or a retirement that can be rolled into an IRA this year, regardless of your income, you can elect to convert those funds to a Roth IRA.  Here is the difficult decision – pay taxes voluntarily now, or later when you take a distribution.

This year brings an additional complexity to the decision – where will individual tax rates be in 2013 and how will your marginal tax rate be affected?   If Congress does nothing, the Bush era tax cuts will expire, and the top federal income tax rates will rise from 35% to 39.6%, an increase of 15%. For those fortunate IRA holders that are in the top bracket, a decision to convert their traditional IRA to a Roth IRA in 2012 may come at a 15% discount than if they wait a few months until 2013.

Perhaps your taxes in 2012 will be lower due to diminished earning or write-offs.  This may also provide the impetus to make at least a partial conversion this year at a lower personal rate.

Here are a few positive reasons to do a Roth IRA conversion:

• Never face a Required Minimum Distribution after the age of 70.5 years old.  As a matter of fact, you need never to withdraw those funds.
• The heirs to your Roth IRA will also not have to pay taxes on their distributions.
• Of course, any distributions you take from your Roth IRA once achieving the age of 59.5 are free of any federal taxation.
• If you hold an asset that you expect to appreciate significantly, convert while the tax basis is low, and enjoy the gains tax free.

Potential drawbacks of a Roth IRA Conversion

• The tax rate in your retirement years will be significantly lower than the tax rate paid for your conversion.
• The investment in your converted Roth account decreases in value.
• The additional money used to pay the taxes on the Roth conversion is no longer available for investment and represents  a significant lost opportunity.

There are hundreds of Roth calculators on-line which will allow you make your own forecasts and come to a decision that best fits your situation.  By all means, work with your financial or tax professional to discuss whether you need to make a move to a Roth IRA this year.  Unlike making your IRA contribution, the deadline for Roth conversions in 2012 tax year ends at midnight on Dec 31^st this year.

¹ Simple Plans must be held at least two years prior to conversion

Glen Mather is President of NuView IRA, Inc., a leading self-directed IRA administrator in Florida. He can be contacted at 407-367-3472 or gmather@nuviewira.com.

You are never too young to start saving for retirement! When we work with clients who start a retirement plan later in life, more often than not, they regret waiting so long to get their plan in action. If you are a young adult in your mid 20’s to mid 30’s with any amount of earned income, it’s time to start thinking about your retirement.

A Roth IRA is a great option for young people looking to start saving for retirement. Think about it – a person who opens a Roth IRA at the age of 25 and maxes out the contributions every year until age 65 will save approximately $1.4 million (assuming the historical 8% rate of return prevails). Here are 3 reasons why you should open a Roth IRA today:

It’s Never too Early to Plan for the Future
TIME is more important than the SIZE of the account. A person of any age can open a Roth IRA as long as they can show that they have earned income (money made from the mind or sweat of the brow) in any given year. An interesting twist – even if you are an infant, as long as you’ve got a social security number and earned income, you can contribute to an IRA. If your child is one year old and gets chosen to model for pictures in a brochure, receiving 1099 income for their work, this earned income can be contributed to their IRA account.

You CAN Afford the Money
A Roth IRA can be started with any amount of earned income. Once you have the funds in the account, you can choose an amount that you are comfortable contributing on a yearly basis and continue to grow your retirement funds from here.

Easier Access to Funds before Retirement
Roth IRAs allow for more flexibility to make withdrawals before retirement. If you contribute to a Roth IRA, those contributions can always be withdrawn without taxes or penalties with no limitations. For Roth accounts that have been funding through conversion, there is a 10% penalty for withdrawals under the age of 59.5.

Saving consistently and investing wisely is a simple formula for success, but sometimes challenging to put into practice. By starting young, you can get in the habit of saving for your future, and soon it will become second nature to make smart investment decisions. At NuView IRA, we let our clients invest in many ways they never thought possible. Give our Florida IRA administration company a call today at (407)-367-3473 to learn more!

As an employee of a large corporation, you most likely have a retirement plan option provided to you that is sponsored by your employer. On the other hand, if you are a small business owner or self-employed, you make think your options for a retirement account consist of simply the traditional IRA and the Roth IRA. However, you may have more options than you think. Consider the following choices as you make your investment decisions.

SEP IRA: With a SEP IRA, the employer (instead of the employee) makes all contributions. If you are a small business owner with few or no other employees, this may be an ideal option for you because you can make annual tax-deductible contributions of 20% of your earned self-employed income or 25% if you’re an employee of your own business up to $50,000 per year.

SIMPLE IRA: If your small business has 100 employees or less, a SIMPLE IRA can be an attractive substitute to a 401(k) plan. Unlike with a SEP IRA, the employee is the primary contributor to a SIMPLE IRA. A SIMPLE IRA encourages employees to take an active role in their retirement savings because the employer is required to match the contribution made by the employee up to 3% of their compensation.

I401(k): An individual 401(k) plan is an appealing option for a small business with multiple owners who work for the business, or for the solo practitioner. Not only does this retirement plan allow the employee to fund the 401(k), but also it enables the employer to make a profit sharing contribution. Other advantages of an I401(k) plan include the ability to accelerate contributions, to contribute on a pre-tax or post-tax basis, and to take a loan up to $50,000 from the plan.

Saving for retirement doesn’t have to be a challenge for the small business owner. Take the time to explore and understand your options because the right one will depend on the strategies and growth goals of your business. Contact our Florida IRA administration company to learn more about the many ways you can invest in your retirement. Give us a call today at (407) 367-3472 to find out all the options available to you!

Unfortunately, all of the attention lately on Roth IRA conversions comes with a flood of misinformation. The following are a few common myths regarding Roth IRA conversions and the realities investors should know:

• Myth 1: A Roth IRA conversion is irreversible – This is not true, you have the right to change your mind later (up to October 15^th of the following year) and get your taxes back that you paid for the conversion.
• Myth 2: After you convert, you can’t touch the money for five years – To withdraw earnings from a Roth IRA tax-free, it is true that the account must have been open for at least five years OR you have reached the age of 59-1/2. It is possible to withdraw your earnings before this time, but you will incur a 10% early-withdrawal penalty.
• Myth 3: Only one conversion is allowed per year – A traditional IRA can be partially converted into a Roth IRA multiple times in a year, providing significantly more flexibility for investors.
• Myth 4: Roth conversions cannot be made by people who are under age 59-1/2 or over age 70-1/2 – There is no age limit for conversions. Individuals older than 70-1/2 must satisfy their Required Minimum Distribution (RMD) before converting the remainder of their assets to a Roth IRA.

Since 2012 when Congress lifted the income restrictions on Roth IRA conversions, myths about the new rules have spread like wildfire. The reality is that Roth IRAs are becoming increasingly popular because earnings accumulate tax-deferred and then can be withdrawn tax- free if the appropriate requirements are met.

Converting a traditional IRA to a Roth IRA is an appealing option for individuals who believe their retirement income will be taxed at a higher rate than their current income. As always, seek the advice and counsel of a financial professional before making investment decisions. Give us a call today at 407-367-3472 or toll free at 877-259-3256!

The answer is simple – it depends. The real answer has nothing to do with your age, but it may have everything to do with how long you want your money to survive. When it comes to accessing these funds, whose needs are greater, you or your IRA beneficiary?

When you convert your traditional IRA to a Roth IRA, you have to pay tax on that money. Therefore, you must have enough savings outside your IRA to pay the tax on the converted amount. If you use the IRA assets to pay the tax, the benefit of converting to a Roth IRA may just about evaporate.

The nice thing about a Roth IRA is that you will not have to face Required Minimum Distributions later, unlike with traditional IRAs. Once you reach the age of retirement, not having to worry about paying tax on withdrawals can make your life much less stressful. Also, anything left to your heirs goes to them tax-free, rather than being taxed in their top bracket.

Prior to 2010, Roth IRA conversions were forbidden for anyone with adjusted gross income over $100,000. However, this restriction is now gone and as a result, you can do a Roth IRA conversion even if you earn more than $100,000. Investors are now taking advantage of this.

At NuView IRA, we give our clients the opportunity to do a Roth IRA conversion, as well as options for self-direction. We let our clients invest in millions of ways they never thought possible. Contact our Florida IRA administration company to learn more about the many ways you can invest in your retirement. Call 407-367-3472 today to learn more about options for your retirement plan.