The Roth vs. Traditional IRA – Which is Best for You?

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If you’re considering adding an Individual Retirement Arrangement (IRA) as part of your overall retirement plan, you may be wondering whether a Roth or traditional account will work better.

Depending on your circumstances, it could be either, or it can even be both.

What is a Traditional IRA? – Basics

Traditional IRAs allow you to save up to $5,000 ($5,500 for 2013) in a self-directed, tax deferred account.  You can also increase the amount of that contribution by $1,000 if you are age 50 or older.

Not only will this allow you to build your own retirement portfolio, but you can also contribute to an IRA even though you’re covered by another retirement plan.  However there are limits on the tax deductibility if you are covered by another plan.

For single taxpayers, the IRA deductibility begins to phase out with an income of $58,000 per year.  It completely phases out at $68,000.
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Less Is More: Make 2013 The Year You Buy Things Differently

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While Americans often complain about our jobs getting shipped overseas, the simple fact is that the global marketplace lets us receive goods for an incredibly low price. 

We are paying less than our parents and grandparents did for goods, yet we have more debt and less money.

What happened?

I recently watched the movie King Corn, a documentary in part about the way our crops are grown and our animals are fed.

Regardless of how you feel about genetically modified crops and conventionally grown beef, the documentary was informative about the agricultural policy change in the 1970s.  While the United States used to carefully rotate crops and limit the crops that came to market, all of that changed when Earl Butz became the Secretary of Agriculture in 1971.  He urged all farmers to plant as much corn as they could, and as a result of his policy changes, food prices dropped radically.  Butz said in the movie, “The basis of our affluence is that we spend less on food now. . .We feed ourselves with approximately 16 to 17% of our take home pay.”
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Protecting Your Kids from Child Identity Theft

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By now, many of us know what a serious thing it is to protect our identities.

Identity fraud is a very real threat, and victims of identity theft find themselves fighting an uphill battle when it comes to fixing their credit, and sorting out other related problems.

However, many of us don’t think that our kids have anything to worry about.  After all, they aren’t 18.

Unfortunately, there is information out there about children, too, and a growing rash of child identity theft reports could indicate that your child could be in trouble.

How Does Child Identity Theft Work?

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Innocent Lives Lost in School Shooting and Links

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There are no words suitable to describe the sadness felt by the school shooting in Connecticut a few days ago, so I won’t try.

(The President did a good job of describing the nation’s sadness in his address, so we’ll leave it at that.)

All I will say is one of the biggest things I think we can all do, besides reflection, is to get back to normal as quickly as possible.  Don’t let some crazy pull you away from having an enjoyable life.

Some good financial reads from this week:

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How to File for Unemployment Benefits

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There are millions of people that are currently unemployed and looking for work across the country.

Unfortunately, you just joined their ranks and find yourself on the wrong end of a pink slip.  You’ve never been unemployed and have no idea what to do.

How do you file for unemployment benefits?  Where do you turn?

You’re frustrated, lost, and perhaps a bit ashamed.

Don’t worry.  Every employer that has ever employed you paid into the unemployment insurance fund on your behalf.

It is now your turn to get to use that fund while you get back on your feet to find your next job.

How to File for Unemployment Benefits - 3 Steps

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3 Ways to Have a Less Commercialized Holiday Season

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Are you feeling like scrooge yet? 

I love the holiday season and all of the festivities, but the commercial aspect of it diminishes my joy.

Having to go out and fight the crowds to buy presents is an activity I enjoy about as much as going to the dentist for a root canal.  The longer I wait to shop, the meaner and angrier people at the mall seem to be.

What’s even worse is that studies show that many recipients don’t even appreciate or value our gifts.

“Despite the fact that people spend a significant amount of time and money on gift-giving, their purchases often are less appreciated than they might hope,” say business school professors Francis Flynn of Stanford University and Francesca Gino of Harvard University in a study published in 2011 (WSJ).

Based on my own personal experience, I can attest that this is true.

Last year my mom was most happy to give me a Mint, which is a vacuum/mop that runs on its own presumably to clean the floors while you are doing other things.  My mom is a clean freak, while we, well, we are not.  She thought this would be the perfect gift.

The problem?
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Personal Capital Review – A One Stop Financial Center

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It’s tough keeping track of all of your money and investing accounts.

It’s not impossible, for sure, but it can be a pain switching between accounts to see exactly what you are invested in for which account.

Wouldn’t it be great if you had one place that can give you a snapshot of your money?

And then wouldn’t it be awesome if you could get a better idea of your allocations to better make sure you are diversified  in the right places?  Oh, and if you could see what your fund fees were costing you in one spot that would be nice too, right?

Some objective financial advice based on your accounts would be a sweet thing to have access to as well, wouldn’t it?

Enter Personal Capital.

Personal Capital describes itself as “Your Next Generation Financial Advisor”, and it may be just that.

Not only does the application allow you to combine your various financial accounts in one place, but it also provides expert, personal investment management with low fees.

What Personal Capital does

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Unemployment Drops Again and Links

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The unemployment rate dropped again in November to a four year low of 7.7%.

It has been since 2008 that the unemployment rate has been at this rate.  The 7.7% number is for November, down 0.2% from 7.9% in October.  This shows that hiring is modest, but at least it is positive.

Unfortunately there may be a jump in unemployment if we go over the fiscal cliff and Congress allows the widespread cuts to his all government agencies.  Some agencies may lose up to 10% of their funding.

You would have to think they would have to cut headcount in order to meet that 10% drop in funding, but we will have to see how it plays out.

Whether you are gainfully employed or still seeking a new opportunity, here are some articles to help you manage your finances:

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British Airways Visa Signature® Card | Review

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Do you fly British Airways?  (They have over 300 destinations BTW.)

If you do then you should take a look at the British Airways Visa Signature® Card.

The British Airways Visa Signature® Card is what many consider an airline miles credit card.  It’s a card that is issued on behalf of the airline where you can typically earn that airline’s miles faster when you buy flights with the card and you can earn additional miles on general purchases.  These miles can then be redeemed for free flights with the airline.

You can also see lots of other great perks in an airline miles card that help make owning the airline’s credit card well worth it.Continue Reading

The Fiscal Cliff Doesn’t Just Affect the Rich

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Though the election is long over, the debate over whether or not to extend the Bush-era tax cuts continues.

This is the so-called “fiscal cliff” that’s all over the media right now.

On the surface, this sometimes seems like a debate over taxes in general, and specifically on higher taxes for the rich.

But don’t bet on it – the fiscal cliff doesn’t just affect the rich – it has the middle class squarely in its crosshairs.

A series of tax increases will begin on January 1, 2013, if Congress does not take action to restore at least some of the Bush-era cuts.

And they’ll be substantial.

Not only will the tax cuts reach deep into the wallets of everyone who has a paycheck, but the fallout from the changes will have wide effects on the overall ecomomy too.

How the Fiscal Cliff Will Affect More Than the Rich

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