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NRIS! Do you know?

Hasan Ali is a  graduate from Edinboro University of  Pennsylvania. He has extensive experience in financial planning. In addition to helping his clients manage their finances, Hasan has also been the featured speaker at management seminars for globally-recognized companies such as IBM and AT&T. Hasanís resume includes stints with the ING Group and Morgan Stanley. Currently, Hasan is a Vice President at American Wealth Management, where he helps clients with retirement planning, bonds investments, and alternative investments. 

Financial Consultant Mako Goss graduated Cum Laude from Georgia State University with a B.B.A. in Finance. After working with Smith Barney as a Financial Planning Specialist, Mako is currently a Vice President at American Wealth Management, where she helps clients protect their assets while assisting them in reaching their financial goals. Mako also has a background in family law and is a Certified Divorce Financial Analyst trained in Collaborative Law..

Five Myths about the Roth IRA

Deciding whether to invest in a Roth IRA can be a difficult process. However, most of the difficulty lies in maneuvering your way through the myths that surround the tax-free compounding IRAs. Here is the low down on some of the most common of those myths. 

If I am eligible for both, I should pick the Traditional IRA because I get the tax break now.
Possibly, to qualify for a current tax deduction for the Traditional IRA, it depends on whether you and/or your spouse (if you are married) are participating in an employer sponsored retirement plan. If neither of you are eligible to participate in a plan during the year then your contributions to a Traditional IRA would be deductible. If you both were participating in a plan then you should make sure that your income is not over the income limits to be able to claim your tax deduction. In 2004 the married filing jointly phase out begins at $65,000 and ends at $75,000. So, if the adjusted gross income is over $75,000 neither one of you would be able to claim a deduction. At that point you may want to consider a Roth IRA providing the joint income doesnít surpass the limits. A married couple filing jointly can each open a Roth IRA if their combined adjusted gross income is under $150,000. If the combined income is over between $150,000 to $160,000 then a partial contribution is allowed. If the adjusted gross income is over $160,000 then neither one is eligible to contribute additional funds to the Roth IRA. 

I have to be employed to contribute to a Roth IRA.
It depends on how you look at it. Even a non-working spouse can have contributions made to their account by a working spouse, providing the couple are under the combined income limits (the eligibility begins to phase out at $150, 000 adjusted gross income and ends at $160,000 for married filing jointly). Also, a person can have earned income, and not necessarily be employed, to contribute to the Roth IRA. This means if there is a minor child who earns income from mowing lawns or some other way, then they are eligible to contribute to a Roth IRA. 

Roth IRAs are only beneficial if youíre young.
Although Roth IRAs were initially created for a younger crowd, age does not determine whether you can benefit from a Roth IRA. In fact, considering the minimum distribution rules of traditional IRAs and retirement plans, converting to a Roth can be especially beneficial for those over the age of 70 who do not want to be subject to the required mandatory distributions rules. Having the funds in a Roth IRA could continue the tax-advantaged compounding. 

Iíll be taxed a penalty for early withdrawal.
Your contributions can be withdrawn 100 percent tax-free. Itís only the appreciation portion of your investment which is taxed for early withdrawal, and that only comes once you have withdrawn 100 percent of your contributions. Even then there are distributions that can escape the penalties, including if the IRA owner becomes disabled or if the funds are used to pay for medical expenses that are greater than 7.5 percent of the holderís adjusted gross income.

Roth IRAs sound too good to be true.
This one is actually not a myth, since it does sound too good to be true to have your investment making money for you while not being taxed. But, believe it or not, it is true, which is reason enough for you to consider a Roth IRA.

Mako Goss can be reached at



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