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US savings bond

Military Debt Consolidation – Pros and Cons

What is military debt consolidation, and how can you get it? Consolidation in general just means combining all your payments into one. If you are serious about trying to get rid of debt, then there are a couple benefits to consider.

For one thing, it helps organize the finances better. After all, trying to track payments that are coming due at all different times of the month can be extremely challenging. Also, the interest rate is generally reduced on these loans, because there is usually some form of collateral involved.

Some loans are specifically for either people who have served, or those who are actively serving-hence the name military consolidation loans. A lot of different companies offer these to those who have been in the service.

What effects the rate? They are the same as loans to non-military citizens. In other words, your credit score is the main thing that will determine your monthly payment.

So are they a good option? Even if you do get a better interest rate, they are still very dangerous. This is because you have to provide collateral to get this lower rate. Therefore, you are at risk of losing your personal possessions. In most instances your home is what is used, so you could very well not have a place to live if you default on this payment.

For this reason, a better option than a loan would be credit counseling. There is less risk, because you are not getting a loan. Therefore, you do not have to worry about any of your personal items getting taken because you are defaulting.

Therefore, if you do get a loan, make sure that you can pay it back. If you are serious about it, make sure you shop around extensively before choosing the best firm. This will help you find the lowest interest rate. Also, make sure to find military debt consolidation companies that allow you to consolidate any type of debt. However, in general, credit counseling is your best option.

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Why A Roth IRA Will Benefit Your Taxes In Your Golden Years

If you’ve been on the edge of considering a specific place to invest your money for your retirement may I make a suggestion?  I suggest the Roth IRA because it allows you to pay taxes on your money while you contribute your money up front, then when you go to pull money out, also known as a distribution, you won’t owe a dime in taxes no matter what kind of returns your money makes in the account.

So in this article I’m going to give you the several reason why a Roth will help you out with your taxes in the long run versus going with a traditional IRA account.

When you hit retirement age you tax liability is going to go up, and if you don’t do something now you’ll end up paying for it in your retirement years.  The first reason your taxes will increase is because your kids will have grown up and moved on with their lives.  This means the $1000 tax deduction you were getting for each dependent child will no longer be benefiting you.  For example if you have 3 kids, this means you would not have to pay taxes on $3000 of earned income.

Second, since you retired you won’t be making a any contributions to you companies retirement program such a 401k.  With a 401k program your money is not taxed until you take a withdrawal from it.  So every dollar that you put in will be money you won’t have taxed upfront.

Third and finally, when you retire most of your debts will be paid off including your mortgage.  This means that the interest payments that you were getting a deduction on in your taxes will no longer be their.  For example if you paid $3000 in interest to the bank that would be $3000 you would not owe taxes on as well, but when your home is paid off you won’t get this benefit anymore.

In the end in whether you pick a safe investment or a risky investment follow the Roth IRA advice I’ve given you here and you’ll have a less likely chance of getting hit up with a higher tax bill in the end.

Choosing Between an IRA and a Roth IRA

There are several major differences between a traditional IRA fund and a Roth IRA. By choosing a Roth IRA, one advantage is that you will be able to withdraw funds that are non-taxable. Most professional financial advisors state that those who are beginners in the world of investment options should open a Roth IRA account because they give beneficial tax breaks in the future and are simple to understand. They recommend doing this even before opening an employer based retirement savings plan unless they provide matching funds for your deposits. Most advisors also recommend switching or converting to a no fee IRA as soon as possible if you currently have the traditional type.

Why Should I convert to a Roth IRA?

If you currently have a traditional IRA and would like to change to a Roth, you may have to pay taxes on the full balance of the traditional IRA, but this could be looked upon as beneficial in the long run. For instance, if you are fairly sure that your income tax is going to become higher, it may be a good idea to switch to a Roth IRA now, although converting a traditional IRA to a Roth means that you will pay taxes at the time of the conversion.

Some Basic Rules for a Roth IRA:

Contributions to the fund are limited, as are spousal contributions. As long as one spouse has compensation income, the other can also contribute to the Roth account, as long as the couple files a joint status on their tax refund. There are also no age limits as long as the individual has income from a job that can be verified. Being involved with or having a 401k program does not affect the amount or the eligibility of those wishing to also have a Roth IRA account. If you decide to convert your traditional IRA to a Roth account, you may still make contributions during the year of the conversion.

Roth IRA Perks:

One of the big perks of having a Roth IRA account is that you can make contributions to it until the age of 70, and you are allowed to leave the money in the account as long as you wish. As long as you are within the guidelines and you meet the requirements, your qualified distributions will remain tax free. To receive the fullest benefits, the account has to be designated as a Roth when it is set up.

Most Common Uses for a Roth:

IRA accounts of both types are mainly used as a retirement savings account. The consumer is allowed to make up to a certain number of contributions through the year. When you are over the age of fifty nine and have the account at least five years, you will be able to make withdrawals that are tax free. Roth IRA’s are a well known and effective way of being able to have savings when you retire.

Invest your Tax Return

Invest your 2009 Tax Return

The IRS is offering an investment option if you are getting a refund for your 2009 taxes this year. You can transfer your tax refund for a US savings bond of up to $5,000. You can purchase a bond in any denomination of $50, remaining funds need to be directly deposited into a banking account.

It’s just that simple, when you file choose the US Savings Bond option and you will receive your bonds in the mail instead of a refund check. The official form is Form 8888, used to deposit your refund into more … Read the rest

Invest your 2009 Tax Return

The IRS is offering an investment option if you are getting a refund for your 2009 taxes this year. You can transfer your tax refund for a US savings bond of up to $5,000. You can purchase a bond in any denomination of $50, remaining funds need to be directly deposited into a banking account.

It’s just that simple, when you file choose the US Savings Bond option and you will receive your bonds in the mail instead of a refund check. The official form is Form 8888, used to deposit your refund into more than one account. Tax preparation software packages like TurboTax and TaxAct provide the form for you when you indicate that you want to purchase one of the bonds.

The Form 8888 also has instructions if you are completing for the form by hand. This is a nice option if you would be investing the money into a savings account as the bonds provide a better rate of return on average.