We have NEVER experienced anything like what is going on now and why everyone looks at "history" just amazes me!!! This country is UPSIDE DOWN and until the idiots in Washington other than the President have "term" limits; nothing will change. THEY are in it for themselves NOT "us".
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There’s Still Time To Win It All Back
Published Oct 27, 2008
From the magazine issue dated Nov 3, 2008
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Baby boomers, it's time to play catch-up. All the 50-somethings who'd been religiously plowing money into their 401(k) plans just got slammed with the trifecta of trouble—sinking stock, tight credit and a lousy housing market.
But there are a host of strategies for catching up in a hurry. Here's how.
Plow money back into the market. Why throw good money after bad? Because over long swaths of time, stocks always do go up, and now is a good time to start buying, while prices are lower. That means maxing out on your 401(k) contributions and feeding an Individual Retirement Account up to $5,000 in 2008 (plus another $1,000 if you're at least 50.)
Play the Roth card. This could be an excellent time to take your old tax-deductible IRA and convert it to a tax-free Roth IRA. You'll pay income taxes on the amount you convert, but that amount is probably a lot lower than it would have been without the recent market rout. And given the astronomical deficits that Washington will have to fix sooner or later, your tax rate may be at an all-time low. Once your money is in a Roth, you'll be able to reap all the future earnings without paying taxes on them.
Invest for income. High-yield stocks and corporate bonds have been among the hardest hit in recent market sell-offs, but they are exactly what you want in your portfolio as you head into retirement, says Paul Sutherland, a wealth manager with FIM Group in Traverse City, Mich. "Lots of companies that are historically good, consistent dividend payers are selling at very low prices," he says, pointing to nonfinancial firms like Dow Chemical, AT&T and General Electric.
Use a health savings account. The theory behind these is that they enable you to save up to your deductible without paying taxes on it. But benefits consultant N. Scott Borden of OFM Benefits Consulting in Overland Park, Kans., has figured out that they make excellent back-door retirement savings vehicles. For 2008, you can contribute as much as $2,900 for singles, $5,800 for couples, and an additional $900 in catch-up contributions if you're 55 or older. But you don't have to spend it. You can use an HSA provider that offers an investment account, and start piling this money into a mutual fund. When you retire, you can draw down that money tax-free for health-care expenses. If your HSA outstrips your medical bills, you can withdraw the money, pay income tax on it and use it for any other retirement expense, so it will perform just like an IRA.
© 2008
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