2008 and 2009 Contribution Limits For 401k

The IRS maximum contribution limits for defined contribution plans allow individuals and their employers to contribute more than ever before to a 401(k) plan. In addition to the opportunity to shelter from taxes a big portion of income, many 401(k) plans have a loan feature that can let its owners withdraw cash in times of need.

401(k) Contribution Limits for 2008
Salary Elective Deferral Limit $15,500
Maximum Employer + Employee Defined Contribution Plan Limit $46,000
Catch-Up Contribution Limit For Age 50+ $5,000

401(k) Contribution Limits for 2009
Salary Elective Deferral Limit $16,500
Maximum Employer + Employee Defined Contribution Plan Limit $49,000
Catch-Up Contribution Limit For Age 50+ $5,500

Source: www.irs.gov/retirement/article/0,,id=96461,00.html

A 401(k) provides a great tax break to employees who contribute to the plan, and no business is too small to have a 401(k). Even a small business with no employees or employing a spouse only can establish a One Person 401(k) plan. This includes independent contractors with 1099 income, freelancers, sole proprietors, partnerships, Limited Liability Companies (LLC) or corporations.

Key benefits of a 401(k) plan:
• High maximum contribution limit.
• Contributions are tax deductible and are based on compensation or earned income.
• Roth contributions with after-tax income can be made for tax free growth and withdrawals.
• Funds in a 401(k) grow tax-deferred.
• Assets can be rolled over from other qualified plans or IRA's into a 401(k).
• One can take a loan from a 401K (if allowed by the plan) - up to the lesser of 50% or $50,000 of account balance.

A One Person 401K also known as Solo 401K must be set up no later than December 31, to be eligible for tax deductions for that tax year.

Lamaute Capital, Inc. (http://www.InvestSafe.com) member FINRA, SIPC. "U.S. Treasury Circular 230 Notice: Any U.S. federal tax advice included in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal tax penalties."

403b Rollover to IRA - Advantages and Disadvantages

If you need to transfer a 403b rollover to IRA of a traditional type, you have a number of options. There are advantages and disadvantages to each. First, let's look at a 403b rollover to Roth IRA.

Rolling over from an account that was funded with pre-tax or tax deductible funds to a Roth-type cause additional taxes for that year. But, beginning in 2006, contributions to a 403-b plan could be made "after-taxes", similar to the way that one funds a Roth account. If you have made after-tax contributions to your 403-b, that portion is not taxed as regular income for the year that you make the roll-over, but any contributions that were made before taxes, as well as earnings on them will be taxed as regular income for that year.

If you take a 403b rollover to IRA accounts of the traditional type, no taxes are incurred in the year that you take the roll-over, as long as you redeposit the fund within 60 days and you only take one roll-over within a 12 month period. Those are the rules regarding rollovers of any type.

If you do not want to incur additional taxes for the year, you can still take a partial 403b rollover to Roth IRA. Converting just enough of the fund to keep you within the same tax bracket and prevent lots of additional costs. This can be repeated over a period of several years, transferring funds from the tax-deferred account to the tax-free account, a little at a time.

If you are concerned that you might want to change custodians again, within a year's time, you can simply "transfer" the fund or take a "direct-rollover". The terms are sometimes used interchangeably, but transfers are not reported to the IRS and there are no frequency limitations.

Whether you take a 403b rollover to Roth IRA or a traditional account, you may want to consider self-directing, at this time. Self-directed investing allows for more options and typically higher returns, as well as ones that are safer than the volatile stock market.

If you do decide to make a 403b rollover to Roth IRA transaction, your returns will not be subject to capital gains or other annual taxes AND qualified distributions are never taxed. So, regardless of how high the account value becomes, it is all tax-free, as long as you follow the rules.

If you convert a 403b rollover to IRA accounts of the self-directed type, you can take advantage of unique options that are found in an underserved area of the real estate market. There are lots of different ways to earn money; you don't have to rely on stocks and bonds.

If you are at or near retirement age, you may still want to consider a 403b rollover to Roth IRA. Taxes might be more affordable right now, than they will be after you retire.

Before you make your 403b rollover to IRA, why not learn more about all of your investment options. This was just the tip of the iceberg.

Judy Pratt is focused on showing you how to successfully earn money for your future with real estate investing using honest and ethical turn-key methods while minimising any risk. To get your FREE ebook and find out more about socially counscious investing please go to http://www.boost-your-ira.com

Why Even the Highest IRA CD Rates Don't Come Close to What You Can Make With a Self Directed IRA

Are you looking to open up an IRA to start saving for your retirement? Do you currently have an IRA with the highest IRA CD rate already setup with a bank or financial institution? I hate to be the messenger of bad news, but you're leaving some serious money on the table when it comes to retirement saving. This article will discuss how even the highest IRA CD rates don't even come close to what you could be earning using a self directed IRA.

It could perhaps be the biggest secret in retirement planning, which explains why less than 4% of all IRA holders do it.

So why do so many people choose to open the highest IRA CD with the highest IRA CD rates instead of self directing their IRA? There are a few reasons....

For one thing, not many people that are planning for their retirement are even given the option to self direct their account. Any employer who runs a 401k account for their employees would never encourage an employee to self direct their own funds because the employer wouldn't make a dime off of the employee's transactions. They would rather pick the securities that make them the most money and force the employee to invest in those assets. This way, both the employer and the employee makes a profit off of the transaction.

This is the same for banks. Banks that offer even the highest IRA CD rates choose what your money is invested in. What they choose to invest in makes them money too. So, say your highest IRA CD had a guaranteed 5% return. Most likely, the bank is making 10% or more off of your contributions, and only giving you half of those profits! That doesn't sound fair, right?

Another reason that people go for the highest IRA CD rates and not self directed IRAs is due to the fact that the highest IRA CD is the "easy" way to invest. Most people don't want anything to do with choosing what their retirement money is invested in- as long as they get a steady return on their investment. People also feel that they couldn't possibly manage their own retirement account, thinking that it would take too much time, effort, and knowledge to make it work right.

The whole point I'm trying to make here is this. Banks, brokerages, and financial institutions are in business because of this make-believe "difficulty" of managing your own investments. They take the place of this fear that people have with investing. And the sad part is- they're taking part of your profits too!

HERE'S THE TRUTH THOUGH- If you educate yourself from the start, self directing your retirement account is not difficult at all! In fact, you can find a knowledgeable and experienced company to hold your hand along the whole process. Being the owner of a self directed IRA, you have COMPLETE control over what goes on within your account. You also have a much wider range of assets to invest it besides stocks, bonds, mutual funds, and other common securities.

For example, if you decided to open a self directed IRA (either by starting a new account or rolling over funds from other retirement accounts) instead of opening the highest IRA CD, you could invest in real estate and experience a 15%, 20%, or even 30% return rate on your investment!

Now, I know what you're probably thinking- how could I possibly know how to manage real estate deals? Well, this is where you can use the knowledge and experience of a company I communicate with that specializes in helping people with IRA real estate investing. If you can place money into a retirement account, learn the basics of IRA real estate investing, and express to your IRA custodian what it is you want to do, then you can make IRA real estate investing work for you- all by using very little of your time and effort!

To learn more about investing in real estate using a self directed IRA, I invite you to check out http://www.increase-ira-wealth.com

Don't let employers, banks, and third-party financial institutions steal a substantial chunk of your retirement savings. Take matters into your own hands and learn more about investing in real estate today!

Why the Highest IRA CD is a Waste of Time

What if I told that searching for the highest IRA CD rate is a waste of time? Due to the fragility of our current economy, many people are ditching stocks and investing in CDs because they are safe and stable. The problem is that even the highest CD rates are pretty pitiful in comparison what other investment venues offer.

Currently, the highest IRA CD rates average at a little below 4%. These low rates paired with inflation mean that you lose money in the long run or at the best break even. To put it simply, if the rate of return and the rate of inflation are equal, you end up breaking even. The problem is that inflation rates have been very high lately. In July of 2008, the inflation rate reached 6%.

Normally the best line of action would be to diversify your investment portfolio and invest a portion in the highest IRA CD as well as other venues but with the way the economy is looking your best bet would be to invest in one area of the housing market. Real estate is a highly stable and lucrative investment venue that is largely untapped.

Many people mistakenly believe that unlike the highest IRA CD rates, investing in real estate is too risky. The truth is that real estate is very stable. Unlike stocks, which constantly fluctuate in value, the value of real estate tends to go up over time and there are companies set up to help you self-direct your IRA account and increase your rate of returns dramatically.

So instead of looking for the highest IRA CD, your first step should be to roll over to a self-directed IRA and invest in real estate. Look for a company that will provide you with a custodian who can help you manage your account. Unlike with traditional IRAs from banks, account custodians for self-directed accounts will act in your best interests and choose investment venues that benefit you most. In fact, there are companies out there that can guarantee to double your returns or pay the difference.

The highest IRA CD rates are pitiful in comparison to the return rates of real estate investments. Furthermore, real estate investments are very safe because they are insured against the most common forms of loss like flood, fire, and other natural disasters. The same can't be said for other investment venues like stocks, which are far more risky.

Your goal? Take this information and start learning about how to roll over to a self directed IRA instead of wasting your time with the highest IRA CD. High rates of inflation paired with low return rates make CDs obsolete. On the other hand, self-directed IRA accounts with real estate investments are just as stable as CDs but far more lucrative. Invest in real estate if you want to maximize the returns on your retirement savings and work towards a more secure financial future.

Ed Gosselin is an advocate of IRA investing in Real Estate as a means of diversifying your portfolio, while maximizing returns. In the interest of disclosure, I am not a tax or financial consultant. I am however fascinated by IRAs and sharing my research with other readers. You can read more about the benefits of IRA investing by going to http://higher-ira-returns.com

Forget About the Highest IRA CD Rates! Look to the Hidden Real Estate Market For Retirement Income

The Highest Rates

Today, the highest IRA CD rates are offered by MetLife in Bridgewater, NJ. They are currently offering 4.5%. Of course, they might not be offering it tomorrow. So, by the time you read this, you might have to take 3%.

Just last week, some banks were offering a higher return. I saw it go up to nearly 5% in some areas of the country. Historically, the average rate is around 3%, so when you see it jump, jump on it.

What kind of "dollar" earnings can you get with the highest IRA CD rates?

Well, $10,000 is the minimum investment for the high rate offered by MetLife. It's called a "5 year-jumbo". So, in five years, your $10,000 would have become $12,523. But, when you figure in the rate of inflation, you have a different picture to look at.

Inflation Is Up

Inflation has been very high lately. It went up to nearly 6% in July 2008. Historically, the average is 3%, interestingly, that's the average rate of return on a CD. So, if the rate of return and the inflation rate are equal, then $10,000 and $12,523 have the same buying power, over time.

So, What Can You Do?

Well, you can't do anything about inflation, but you can stop looking for the highest IRA CD rates and start looking for other options. Most of us would like to retire wealthy. But, today, people are just happy to be "able" to retire at all. That's how poorly their investments are paying off.

The Best Choice - The Hidden Real Estate Market

The picture is bleak in the stock market right now. Normally, I suggest diversification, but I can't do that today. I actually believe that the best choice is to invest in one area of the housing market and re-invest over and over again throughout the year.

You might argue that the housing market is down or investments are too risky. There is a little known or as I call it the "hidden real estate market" that is underserved and mostly overlooked. There are management teams that can take the "risk" out of the equation.

Let's say that you have $100,000 and you get the highest IRA CD rates. After five years, you would have $125,230 and change. If you bought a house with that money and resold it for a modest $10,000 profit, you would have a 10% return on your investment. Already, that's more than double the rate of return.

But, if you did the same thing three times in a year, you would have a 30% rate of return. If you also re-invested your profits, you would end up with a 33% rate of return. The more deals done in a year, the higher your rate of returns and the faster your account will grow.

How to Get Started

You need a self-directed account. Numerous companies offer them. And, if you've never invested in the real estate market, you need some help. But, you can do this. Others like you have given up on the highest IRA CD rates and with unique investment options, they have retired in style.

How To Profit From The Hidden Real Estate Market

Visit http://www.RealEstateIraInvestor.com to find out about using your self directed IRA to purchase real estate hassle free with renters lined up and guaranteed payments the first year. Jefferson Davis is an expert author in the Solo IRA field.

The Biggest Mistake You Could Make With Your 401K

You're probably thinking that the biggest mistake you could make with your 401k is not contributing any money to it or starting too late with contributions. That's certainly a mistake and a big one but not the biggest.

The absolute worst thing you could do would be to put all or most of your 401k money in your company stock. Although you may be working for a great company that's been around for a long time with a great track record of stock appreciation, the fact remains that leaving the majority of your retirement funds in company stock is extremely risky. This is a high-risk gamble that could virtually wipe out your retirement account if the company has financial difficulties.

I personally know of three individuals who did just that and lost a tremendous amount of money in their 401K's because of committing this error. In all three cases, their accounts were virtually destroyed due to the recent stock market crash of October 2008. Years and years of savings were lost in a virtual instant as the market crashed.

So, what should you do? One of the best things you can do would be to use the "Rule of 100" when investing in general. This is a guideline used by many financial planners and basically says that the percentage of your assets invested in safe investments should be roughly equal to your age. For example, if you're 57 years old, approximately 57% of your money should be totally safe and protected from loss. You would do this in a 401K by placing the money in a money market fund or something similar. This is, of course, a general guideline but I'm sure you get the idea. Placing a majority of your financial assets into the stock market when you're in your pre-retirement years is definitely too risky.

Now, you may think that the return in the money market is too low but you have to consider the fact that the company match on your deposits makes the overall return much higher. Many companies offer a 100% match on your contribution and even if the match is only 50 cents on your dollar, your return will far exceed the 3 or 4% in the money market. Consider the company match as free interest and your return will be at least 6 or 7 % and possibly much higher depending on the percentage of your 401k deposits that your company matches.

It's also extremely important that you make the right decision on how to withdraw your 401K money when it's time to retire. This is a critical decision and is fully discussed in my free e-book called "The Retirement Survival Guide" which you can download at my website www.FreeRetirementSurvivalGuide.com.

If you would like to know precisely what your next 20 years of cash flow will be, my Retirement Snapshot cash flow calculator will do just that. Now being used by hundreds of financial planners around the country, the consumer version is now available to you at http://www.MyRetirementSnapshot.com

A FREE Trial is available at the website.