More financial advice...

[garrettwc]

Brad, they do offer matching on our 401K. I have that maxed out.

We also have an employee stock purchase plan where we can contribute a portion of our paycheck each week for a specified period. At the end of the period we get to buy shares at the lowest market price during the same period minus an employee discount. Even if the stock stays even, you make a gain because of the discounted purchase price. I should probably get back into that one.

If you are fully funding your 401K does that limit the amount you can put into the ROTH?

Brad speak STRONG mojo!

True that. And I am paying attention and taking notes. You guys are being most helpful. Please continue as ideas come to you.

[Brad Johnson]

If you are fully funding your 401K does that limit the amount you can put into the ROTH?

Nope, that's the beauty of it. A ROTH is a completely seperate account. There is an annual cap on ROTH contributions (I think it went up to $4000 this year) so you can't dump everything into one but the cap is specific to the ROTH account and it's not tied to your other investments. The great thing is that ALL (as in ONE HUNDRED PERCENT!!!) of the gains on the account are tax exempt. There are time limits on it for the full exemption, but you're in this for the long-haul anyway. It wouldn't be a bad idea to start one for your kiddos. Just think what a retirement savings account for them could do if it has an extra 15 or 20 years to mature!

Also, check with your accountant and investment manager. In certain circumstances you can qualify for a pre-tax MSA where any unused balance rolls over into an IRA at the end of the year. In this case the (MSA) Medical Setaside Account contributions are not taxed as part of your annual income. Instant Savings!

We also have an employee stock purchase plan where we can contribute a portion of our paycheck each week for a specified period. At the end of the period we get to buy shares at the lowest market price during the same period minus an employee discount. Even if the stock stays even, you make a gain because of the discounted purchase price. I should probably get back into that one.

Get back in pronto! A buy-in at at a guaranteed-lowest price PLUS a discount? HECK YEAH! Just be careful that the company's future looks stable. If it's not, take the money and put it somewhere else.

Brad

[garrettwc]

Thanks for the info on the ROTH.

I'll have to check into the MSA. My company offers something like that, but I'm not sure if it rolls over at the end of the year. Worth a look, and anything to beat the tax man. That's something I need to look into as well, reducing my taxable portion.

Re: stock purchase plan

Just be careful that the company's future looks stable.

80%+ market share in a growth industry and a growth rate that has beaten the Dow every year since 1992 (wish I had gotten in then). I think I'm OK in that area.

[Brad Johnson]

Forgot to mention a few things things:

First - there is an income cap on ROTH qualification. I think it's currently $150,000 per year (adjusted gross income on a "Married, Filing Jointly" return).

Second, the ROTH cap is $4000 per year per person. You, your spouse, each kid, etc. The only You get the point. The only restriction is that the person must have income. Talk to your accountant, there might be a way to legally and legitimately show your children as contractors in some capacity that would A)allow you a tax deduction on any monies paid them and B) Qualify them for a ROTH. They would have to begin filing tax returns, but it's a small price to pay for what they would have a few decades from now.

Brad