Or IRAs

Independent Retirement Accounts

Capital Gains are taxes on earnings from investments

This is considered income

This includes: Interest on bonds Dividend

payments Capital gain when

you sell a stock for a profit

Even the interest you earn on a saving account

This means you put-off paying taxes until later.

When you do this, you end up with more.

2 Big Benefits: You end up with

more You benefit now

because your contribution is a tax deduction.

An IRA is not an investment. It is just a signal to the IRS (Internal Revenue Service) not to tax until later.

You can invest in stocks, bonds, or mutual funds THROUGH an IRA.

When you give a 1,000 dollars to charity or contribute 1,000 dollars to an IRA, the government considers your salary 1,000 dollars lower when it computes your tax.

Your Salary – 10,000 The tax-rate - 10% Your tax bill – 1,000

BUTYou contribute 1,000 dollars to an IRA

Your salary – 9,000Tax-rate – 10%Your tax bill - 900

Pro Pay less

taxes now End up with

more when you pay taxes later

Con Cannot get

to the money until you are 60-years-old

Enter Senator William Roth and the ROTH IRA.

In 1998, the government created a new IRA that is very attractive

Pro NO CAPITAL

GAINS taxes at the end

This means you will end up with more than a traditional IRA

You can take out the principal at any time for 1st time home purchase

Con No current tax

deduction

If your parents are saving money for you.

They could create a Roth IRA and then give you the money tax-free when THEY turn 60!!!!!!!