Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Best Way to Beat Higher Taxes

Personal_Finance / Pensions & Retirement Aug 21, 2009 - 01:02 AM GMT

By: DailyWealth

Personal_Finance

Best Financial Markets Analysis ArticleDr. Steve Sjuggerud writes: A massive tax bomb will land on us soon...

You are foolish not to protect yourself from it. Today, I'll show you how to beat it.



Look, you know all about it... Our government has spent too much money. According to public awareness firm the Peterson Foundation, the government's debt was $184,000 per person in 2008. For my little family of four, that's $736,000 of government debt. And it keeps growing.

Take a look at the breakdown in 2008:


The government has to raise this money by taxing us, as citizens. But it doesn't tax all citizens, of course... Do you believe 43% of those filing returns pay no taxes at all? It's true.

So who does pay taxes? The top 25% of taxpayers (those with an income of $66,000 or higher in 2007) paid 87% of the taxes. Basically, the top 25% of taxpayers will be the ones paying this enormous debt.

In short, my "burden" is not just the $736,000 for my family... The government will use my taxes to cover its debts on three other families, too. So the government needs A FEW MILLION DOLLARS in taxes from me to pay its debts. Don't think it's just me... If you make $66,000 or more, you're in the same boat!

And that's just the old debt... New debts are ringing up every day. Literally. The national debt grows by a few billion dollars every day. I don't know about you... but I find it sickening.

So what can you do?

One big simple thing we can do to beat the tax bomb is convert our IRA to a Roth IRA...

The biggest difference between a Roth IRA and other IRAs is this: You put after-tax money into Roth IRAs... And because you've already paid taxes on that money, your future withdrawals, including gains, are tax-free.

Well recently, the rules have changed. Between the new rules and the coming tax bomb, you have to consider converting to a Roth IRA.

The government needs big tax dollars right now. So it's changed the rules on Roth conversions, in favor of big investors. Soon, regardless of your income, you will be allowed to convert your IRA to a Roth IRA. This is a foolish move for the government, but it raises money in the short term because you have to pay taxes upfront, so it's doing it.

The list of Roth IRA benefits is huge...

With a Roth IRA, your withdrawals are TAX-FREE. There are many positives to this:

1) If the government raises taxes (which it will), it doesn't hurt you.
2) You can pass it along to your kids or grandkids tax-free, where the assets will continue to grow tax-free.
3) You don't have to make any mandatory withdrawals like with a traditional IRA.
Heck, to me, the biggest risk – and I hesitate to even think about this – is that the government will change the rules again in the future. It shouldn't be able to... But hey, it's the government.

The rule change kicks in for 2010. The timing could be perfect...

You see, in order to convert your traditional IRA to a Roth, you do have to pay income taxes on the amount of the IRA for the year you convert. (That's what allows you to have it non-taxable forever.) You can convert under 2010 taxes, hopefully before tax rates go up. And at the same time, your tax bill for this could be smaller this year, as the stock market is still off of its highs.

Lastly, the government is giving you a special deal here (it needs your money!). If you want to convert, it'll let you stretch out the tax bill to convert over three years. So if you had a $100,000 IRA to convert, and your taxes due on that were $30,000, then you could stretch that $30,000 payment out for a few years.

I hope I didn't make it sound too complicated. Because it's not. In short:

Convert your traditional IRA to a Roth IRA. Pay the income tax at the current lower tax rates on that money. And then you (and even your heirs) will never have to pay taxes on that money again. Inflation won't hurt you, nor will higher taxes, and you get to keep all your profits, tax-free. Good stuff!

Good investing,

Steve

P.S. While I think this is appropriate for many people – particularly if you believe higher taxes are around the corner – it might not be right for you. Everyone's situation is different, of course. I highly recommend talking about this idea with your tax advisor.


http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2009 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules