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How is everyone planning for retirement?

Discussion in 'Business Operations' started by weed wacker 2, Oct 20, 2009.

  1. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    To clarify that bit...

    The Roth IRA *might* have certain tax exempt provisions ...
    You'll want to speak with an adviser.

    Because a Roth IRA contribution can not be deducted from one's income,
    hence one pays the taxes on it as income, upfront.

    Not entirely a bad idea, but it's not tax free.
  2. mdlwn1

    mdlwn1 LawnSite Silver Member
    Messages: 2,443

    An IRA just means individual retirement account...doesnt matter wheather or not you buy stocks, bonds, cd's or whatever...its still an IRA. As for where to put money, it depends if you want it to go up or not. Right now..the bank will basically pay you nothing. The actual value of your dollar is going down. That kind leaves you without too many choices. Either invest it in your business or put it in some kind of market. Corporate and municipal bonds are really the only place to go if you dont want to be in the stock market.

    Roth IRA..pay the taxes now...not when you retire. Pro's..when you retire...it's all yours
    IRA you do not pay taxes now...you get to earn interest with the governments money which will be considerable over 40 years.
  3. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    The Roth has NO tax exempt provisions when invested. But EVERY gain it makes over the years is completely tax free.

    The Roth IRA is absolutely the best retirement account out there. Invest it in a good mutual fund with a good long term track record.
  4. TerraManusContracting

    TerraManusContracting LawnSite Member
    Messages: 10

    The Roth IRA is the best bet of all "traditional" retirement plans out there. It is better than a traditional IRA because it is taxed at today's rates, and we all know that tax rates only go up. As previous posters have stated, CDs are worthless. Interest rates are so low that gains are minimal, and when you factor inflation and taxes, your money is going backwards. However, even with the Roth IRA, your money is not insulated from market forces. Ask anyone who had a decent IRA built up prior to 2007, they got slammed in this latest go-round. Chances are, in the time before you retire, there will be another downturn, and whatever accumulations you have in IRAs will get slammed as well.

    Is there an answer to this? You bet.

    In my opinion, retirement funds should not be subject to market forces. You can do whatever you want with your other money, but the key of retirement funds is SAFETY. If you were jumping out of an airplane, would you assume any risk at all with your parachute? I love to skydive, and the answer is hell no.

    So how can I invest retirement funds in a zero risk, yet guaranteed return avenue of investment?

    Annuities. Specifically, the variable annuity from Prudential. It is the best variable annuity on the market, hands down. There are fees associated with the VA, but your money grows at a GUARANTEED 6% rate every year, tax free. In the VA, your money is put into mutual funds managed by the very best fund managers in the world. You have two account balances; the "true" balance, and the balance GUARANTEED by the company you purchased it from. Truly, you don't even have to monitor your money in an annuity; you have a contract with the issuer for a guaranteed growth and payments to begin at a contracted date. They have the best fund managers in the world managing your money because, if the market drops, the issuing company is on the hook, not you.

    The best part? Annuity owners sleep better at night.
    Last edited: Oct 23, 2009
  5. lawnspecialties

    lawnspecialties LawnSite Silver Member
    Messages: 2,524

    With all due respect, the variable annuity is one of the biggest rip-offs in the "investment game". Their sales commissions are rediculously high, they have higher fees, and they create excessive tax burdens. A new study recently showed it takes $100,000 in a variable annuity to generate the same income as $60,000 in an immediate payout annuity.

    Variable annuities are sold by insurance people, not financial planners. Run from these things as fast as you can. Unless you are one, Terra. :nono:

    As for a Roth, IRAs are investments for the long term. The market has highs and lows. When you're within a few years before retirement, you move your investments from higher risk stocks to extremely low risk stocks and/
    or CDs.
  6. topsites

    topsites LawnSite Fanatic
    Messages: 21,653

    I'm not disagreeing the Roth is the best for you but it depends on one's financial strategy.

    Me, I have no IRA.
    Because simplicity rules, that's my strategy.
    Last edited: Oct 24, 2009
  7. mdlwn1

    mdlwn1 LawnSite Silver Member
    Messages: 2,443

    Buy fertilizer stocks if they ever dip......more people in the world....more food production.....more fertilizer........plus..as the dollar falls...they go up even if sales are weak
  8. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,670

    You need to do some no, a lot of research. With IRA, Roth or traditional, you need good diversification of your investments. Unless you want to spend considerable time watching your investments, stay away from individual stocks in your retirement portfolio. As much as you hear about the market's long term performance, for every Deere, CAT, and GOOG there's a GM, CITI, and Enron. And although Deere, Cat and others may be well above their lows in March, they are well off their highs. For equity or debt investments, stick with mutual funds or ETF's. I put some money into good rental property years ago and its all paid for. Its been good to me in my retirement.
  9. dtelawn

    dtelawn LawnSite Member
    from Alabama
    Messages: 113

    I think many of you guys are very savvy about these issues. It gives our industry true strength.

    I do have to make a point though. On the issue of $5000 a month into anything. This year I have done very well but there is no way the average guy can save $5000 a month. If you are able to store that kind of cash, you have no finacial worries. I mean $60000 a year is a great GROSS income for most households..
  10. wvbrian

    wvbrian LawnSite Member
    Messages: 110

    I have my Roth IRA in index ETFs and sleep better at night than if I had my Roth in individual stocks. Indexing spreads the risk , but tracks the perfomance of the overall market. There are also alot of companies that now have target retirement funds where you pick your estimated date of retirement, and the funs becomes more conservative over time as that date approaches. I recoomend these for novice investors as they offer diversification with just one fund. FFFGX for example is Fidelity's target date 2040 retirement fund,just set it and forget it.

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