From Where I Sit
Written by Bob Tribble   

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IRA’s, Rich Folks And Raising Children 

Georgia’s Coastal Illustrated published an article in its January 16 edition written by Kathleen Morgan reminding those who make investments in IRA’s for their retirement of the increased amounts they may contribute to the funds in 2008.

The contribution limit for both Traditional and Roth IRA’s will increase from $4,000 per year in 2007 to $5,000 per year in 2008. If you are 50 or over, the amount will increase from $5,000 to $6,000, provided your income is not too high.

Ms. Morgan points out in her column that those who are able to contribute as much as $5,000 or $6,000 per year to the retirement fund should consider fully funding it early in the year every year so the money would have more time to grow. IRS’s can be funded up until the tax filing deadline each year for the previous year. Those who wish may also spread their contributions out over the twelve months of 2008 and the first three months of 2009.

Most financial experts project that you will need between 80 and 100 percent of your pre-retirement income in order to maintain your lifestyle. Needless to say, if you plan to travel a lot or purchase a vacation home when you retire you will most likely need more money. That means you will have to have other income available such as Social Security, pensions, 401(K’s) etc.

An IRA can be one of the best retirement savings plans available if done properly. It has the potential to grow on a tax deferred basis, which means your earnings can grow faster than in an investment on which you paid taxes every year. Roth IRA earnings will grow tax free provided you do not take withdrawals until you are fifty-nine years and six months old. Remember, you cannot take the Roth contributions deductions on your tax returns. Traditional IRA contributions are deductible from your taxes.

Ms. Morgan advises that you will be helping yourself greatly if you contribute the maximum amount to your IRA in 2008 and future years if you are financially able.

Talking about IRA’s, those who consider themselves rich enough may not even need one. How much money do you have to have to be considered rich in today’s society?

Some say you must have about $5 million per family member, with earned income of about $500,000 per year to be considered rich. Others would say more and some might say less.

Think for a minute of how many people you know with considerably more money than stated above who do not seem happy and stay in trouble all the time. You can name a list of all the folks you know who have a problem paying their bills every month, yet they are happy and well off emotionally.

Write this down as country star George Strait sings, if you c an share any problem with you wife or husband, consider yourself a rich person. If you can look your parents in the eye and believe that you have given back to them even a portion of what they gave you, consider yourself rich, because there is more to life than money and fame.

Finally, many of us wish we had known sooner that when we miss a child’s play, performance or sporting event, we will have forgotten a year later the work emergency that caused us to miss the event, but the child probably won’t ever forget that we were not there.

Speaking of raising children, always tell them as much of the truth as they can understand. This will establish the most valuable attribute you have as a parent, which is credibility.

In the final analysis it is not what we do for our children but rather what we have taught them to do for themselves that will make them successful and happy in life.