This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Thursday, August 20, 2009

Cool Info About the Roth

Posted By Paul

I read an article that made a point about the Roth that I thought was interesting.

For those of you not familiar with the Roth IRA you can read up on some earlier posts on this topic:

Roth IRA: A tax shelter for your golden years
The Roth as a College Savings Vehicle

I put money in a Roth with the basic idea that the more money I can save towards retirement the better. The article made the additional point that any money you put into a tax-deferred retirement account (like a 401k or IRA where you pay taxes when you take it out, presumably during retirement) has the added wrinkle that you really have no idea what the tax laws will be like when you retire.

The changes in the tax rates for a particular income bracket can have a dramatic effect on your retirement situation. Let's say theoretically that when you retire the tax rates are much lower...well then your retirement money will go that much farther and the opposite situation if tax rates end up being much higher.

When talking about a retirement that is probably decades away, it's VERY hard (perhaps impossible) to predict and plan for this.

However, the Roth sidesteps all this. You pay the taxes now so you don't have to worry about what the tax laws will be in the future.

Not to say you should dump your IRA or 401k, but I thought it was a cool little point about the Roth that hadn't occurred to me.

Here is the full article:

New Ways to shelter your retirement

Saturday, August 1, 2009

Get Frugalized!

Posted By Paul

Remember the time Matt and I "frugalized" a friend? We were discussing that recently and both agreed that, while our friend already had some respectable spending and saving habits, she really benefited by getting an additional perspective on a few things that she was unsure about. Not "expert" perspective; we certainly don't claim to provide that, but we talked about all the same things we write about on the blog as they pertained to HER finances. Because many people are still nervous about discussing money matters in anything but an abstract sense, they sometimes have difficulty turning information into action.

If we don't accomplish anything else with Frugalize, we hope to at least get people talking about personal finance. It's amazing how helpful it was to our friend to just get a fresh perspective, and so we wondered, "Are there other people out there who would appreciate free input on their finances by two guys who think a lot about this stuff AND can guarantee that we're not trying to sell them an insurance policy, mutual fund, or get rich quick scheme?"

If you're interested in seeing what we think, just email us at frugalize@gmail.com. We'd have a discussion over email where we talk specifics about income, expenses, debt, and so on. We don't want to know specific account numbers or anything like that, but for our advice to be valid you need to be as honest as possible.

As it says in our disclaimer above, we're not financial advisers so we won't recommend stocks or specific mutual funds. We also won't recommend specific banks, brokerages, or insurance companies. What we WILL do is give you a critical and honest look at your financial state and offer unbiased free advice that you can take to heart or ignore.

We'll give you the best advice we can for free and all we ask is your permission to discuss the process we went through together in a future Frugalize article. We'll have you look it over before publishing to make sure that you feel comfortable with it, and obviously would not include any specifics about your identity.

If you're interested, drop us a line.