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mlakdawa · Apr 8, 2003, 09:00 PM

Hi,

Before April 15th, I want to invest into an retirement account. I don't know if I should open a Roth IRA account or the new proposed Lifetime Savings Account(LSA) by president Bush.

Can you please list the pros and cons of both accounts.

Would I be able to withdraw from the account at anytime or is it at age 59? By the way, I am 24.

How does the account grow... do these accounts have certain Mutual Funds that they invest into?

Thanks!

mtmjr77 · Nov 10, 2005, 02:03 PM

LSA are not available yet and they may not ever be. They would be nice, however, because there would be no penalty for withdrawals and they would grow tax-deferred unlike the IRA which there is a 10% penalty for withdrawals before 59 1/2. You can contribute $4,000 per year to an IRA which you can deduct from your taxes and that can be invested in just about anything. You can open an IRA with just about any online broker but remember that it is "retirement" savings. Any money that you are saving to use before 59 1/2 should be put into a Non-Qualified savings or brokerage account. Check out:

www.sharebuilder.com

junleo · Jan 18, 2006, 08:44 PM

I have $183,000. In an investment account that I rolled over from my 401K when I retired. I owe $23,000 in bills. I am wondering if I should withdraw money from my investment account to pay off the bills. I receive $1217/month from pension and $1666/month from Soc Sec. My husband is retired and receives a pension and Soc Sec also. We are not financially strapped, however, I question continuing monthly payment on bills that would take me the next 10 to 15 years to pay off. I am 67 years old. These are my personal bills not my husbands.

junleo · Jan 18, 2006, 08:57 PM

I have $183,000. In an investment account that I rolled over from my 401K when I retired. I owe $23,000 in bills. I am wondering if I should withdraw money from my investment account to pay off the bills. I receive $1217/month from pension and $1666/month from Soc Sec. My husband is retired and receives a pension and Soc Sec also. We are not financially strapped, however, I question continuing monthly payment on bills that would take me the next 10 to 15 years to pay off. I am 67 years old. These are my personal bills not my husbands.

Fr_Chuck · Jan 18, 2006, 09:01 PM

Originally Posted by mtmjr77

LSA are not available yet and they may not ever be. They would be nice, however, because there would be no penalty for withdrawals and they would grow tax-deferred unlike the IRA which there is a 10% penalty for withdrawals before 59 1/2. You can contribute $4,000 per year to an IRA which you can deduct from your taxes and that can be invested in just about anything. You can open an IRA with just about any online broker but remember that it is "retirement" savings. Any money that you are saving to use before 59 1/2 should be put into a Non-Qualified savings or brokerage account. Check out:

www.sharebuilder.com

It is very doubtful that congress at this time will pass any LSA. This is merely a proposed item that could be used along with Social Security, the plan is great and could give people a lot more money at retirement but political fighting is keeping it from happening.

There are a variety of IRA types standard and Roth, and all sorts of investment options. I would advice sitting down with a certified investment counselor to go over your specific needs.

mtmjr77 · Jan 19, 2006, 06:49 AM

Hi Junleo,
What type of bills are these? Credit Card, Student Loans, Mortgage?? Your answer depends on the interest rate you are being charged vs. the interest rate you can earn. If these are Credit Card debts (around 10%-15% interest), than you would want to eliminate that debt asap. However, on the contrary, if this is a student loan (around 3%-4% interest) you do not have to be as concerned.