When IRAs, 401(k)s, And Other Tax-Sheltered Investments Don’t Make Sense By: Stephen Nelson Every year about this time, people start talking about and considering things like IRA contributions. Most of the time, tax-sheltered investments make great sense. The federal and state governments have designed their tax laws to encourage such savings. However, that said, there are three situations in which it may be a poor idea to use tax-sheltered investments: You know you’ll need the money early In this case, it may not be a good idea to lock away money you may need before retirement because there is usually a 10 percent early-withdrawal penalty paid on money retrieved from a retirement account before age 59 1/2. But you will also need money after you retire, so the “What if I need the money?” argument is more than a little weak. Yes, you may need the money before you retire, but you will absolutely need money after you retire. You don’t need to save any more for retirement Using retirement planning vehicles, such as IRAs, may be a reasonable way to accumulate wealth. And the deferred taxes on your investment income do make your savings grow much more quickly. Nevertheless, if you’ve already saved enough money for retirement, it’s possible that you should consider other investment options as well as estate planning issues. This special case is beyond the scope of this book, but if it applies to you, I encourage you to consult a good personal financial planner—preferably one who charges you an hourly fee, not one who earns a commission by selling you financial products you may not need. Your tax rate will rise in retirement The calculations get tricky, but if you’re only a few years away from retirement and you believe income tax rates will be going up (perhaps to deal with the huge federal-budget deficit or because you’ll be paying a new state income tax), it may not make sense for you to save, say, 15 percent now but pay 45 percent later. About the Author: Stephen L. Nelson CPA has written more than 150 books. His bestselling book is Quicken for Dummies, which sold more than 1,000,000 copies. His books have sold more than 4,000,000 copies in English and have been translated into more than a dozen other languages. His web site is http://www.stephenlnelson.com

Inside Finance Loan: Pre-Approved   Getting a loan pre-approved is been discussed in this article. The pre-approval process involves an in depth look at your financial situation. The lender will examine your credit, verify your employment and annual salary, take a close look at your outstanding debt as well as your assets, and determine what money if any you have available for a down payment. Defeating Credit Card Debt   Plan all your borrowing. Sit down and write down what you absolutely must buy over the next year, and add what you would like to buy. Total the cost. Write down a budget for each month, making sure you have listed all your regular expenses that are fixed and unavoidable, and those over which there is some flexibility. Compare that total with your income. Features Of An Investment Club   The investment clubs providing different features, these are given below. The primary motive of an investment club is make the most money possible and for investors to share ideas and learn about the market. An investment club can be established as a legal entity, either as a legal partner or as a limited liability corporation with a framework that is similar to that of a mutual fund. But unlike that of the mutual fund an investment club does not require its members to pay management fees. Good Verses Bad Mortgage Broker   There should be some comparisons between the bad and the good mortgage brokers. However, with so many so called “experts” out there, how does one separate the wheat from the chaff? How do you know if a broker is honest? And how do you know they're an “expert” or not? Getting Home Loan   Where can we get a home loan? One of the best resources for getting a home loan is your neighborhood bank. Depending on the length of your relationship with the bank and the amount you have in you checking or savings account, you might be sent out letters and emails inviting you to apply for a loan. If you are generally satisfied with the quality of the service that you receive form your bank and they are offering a great interest rate, don’t walk away.