Planning Ahead

This month I set up a 529 College Savings plan for Jackson and also created a Roth IRA for our retirement. Lately I've been thinking about the future a lot - probably because of Jackson - and I want to be sure that we can pay for his education and also that we have a nest egg for retirement. I would highly recommend that my friends and family set up a Roth IRA - they are great because taxes are deducted before the money is invested, not after. This means that when you cash it in, you receive ALL of the money that is in your fund.

Here's a little information about Roth IRA's:

• Its a good idea to contribute as much in an IRA as the government will allow you to. This is because the more you save in a tax-favored account, the more tax-protected money you can rack up!
• If you're under 50, and you're in my income bracket, you can only contribute up to $5,000 per year or the total of your taxable income - whatever is smaller.
• In a Roth IRA, you can take out money whenever you want, as long as you don't take out any earnings ony our investments - if you take out earnings, you'll incur a 10% penalty. This is different from traditional IRAs.

Setting up these funds literally took about 10 minutes each. It's something I've been wanting to do for a long time - now that I know how easy it was I wish I would have done it sooner!

Happy saving!