Retirement Plans: IRA's

By Doeren Mayhew

While retirement plans benefit from special tax advantages, they are also restricted by special tax regulations. For example, you are allowed a tax break if you contribute to a retirement plan and you are able to have your retirement income grow free of taxes (for a certain period of time). However, annual contributions, the total size of each contribution, and the frequency of contributions are subject to restrictions. It is important that you carefully consider your options before deciding on a retirement plan. There are generally two categories to choose from, IRAs and employer-sponsored plans.

Before you can start planning, review the retirement plans that are currently available to you. Generally, there are two categories into which all plans can be sorted: IRAs and employer-sponsored plans. IRAs are perhaps the most widely used retirement plans because they're easy to set up and maintain. You can open up one yourself it doesn't have to be sponsored by your employer and you can contribute as much (or as little) as you want, whenever you want, provided you don't exceed applicable annual limits. Following are descriptions of the three main types of IRAs:

Traditional IRA. With this type of IRA you are able to let your assets grow on a tax-deferred basis. This is advantageous because you will not have to pay taxes on your assets until you withdraw funds from your account.

Contribution eligibility depends on earned income, statutory limits, and age. You can only contribute, at a maximum, as much as your earned income. Earned income is defined as income from wages and self-employment income in the period of one year. Earned income does not include investment income. If you are age 50 or older then you may also be allowed to contribute what are called catch-up contributions. Additionally, your spouse can also use your income to make contributions of his or her own. However, you and your spouse are only eligible for make contributions if you have not reached age 70 at the end of the year of the said contribution.

Before contributing to a traditional IRA, be sure you wouldn't be better served by contributing to another IRA type, such as a Roth IRA, or to an employer's 401(k) plan.

The deductibility of your contribution is one factor that may make you lean towards once type of IRA over another. Your income level, along with other factors, will determine if a contribution to a traditional IRA will be fully deductible. If both you and your spouse are able to participate in a plan that is sponsored by one of your employers, you are automatically able to deduct your contribution, regardless of how much income you earn. However, your adjusted gross income (AGI) might make your deductions value reduced or even worthless.

If you aren't eligible to make a deductible contribution (or a Roth IRA contribution), you may wish to make a nondeductible one you'll still enjoy the benefit of tax-deferred growth. And, when you withdraw the funds after age 591/2, only the earnings will be taxed. You can withdraw your nondeductible contribution without tax.

Roth IRA. You may contribute the same amount to a Roth IRA as you can to a traditional IRA, but there are different eligibility rules, such as no age limit with respect to contributions, so long as you meet the earned income requirement.

You also must remember that the total annual contributions to your IRA may never exceed the defined limit. In order to get around these limits you are able to split your contribution between a traditional and Roth IRA.

The Roth IRA also differs from a traditional IRA in that you won't be able to claim a deduction for your contributions. But all Roth IRA earnings can be withdrawn tax free after age 591/2, provided you've had the account for at least five years. (You can withdraw amounts up to your total contributions tax free at any time.)

Traditional IRAs also have required minimum distribution rules that must be followed, Roth IRAs do not have such restrictions.

If a Roth IRA sounds like a better place to park your retirement funds but you already have a traditional IRA, you may be able to elect to convert some or all of it to a Roth IRA. In so doing, you'll be creating taxable income, but you'll also be getting the benefit of future tax-free withdrawals.

Simplified Employee Pension (SEP) IRA. A SEP IRA provides self-employed individuals a way to make more significant retirement contributions than would be available to them through a traditional or Roth IRA. Funds are treated, for tax purposes, the same as IRA funds; you may claim a deduction for your contributions, and distributions will be taxed. But the contribution limits can be much higher. - 23223

About the Author:

This data is distributed for informational purposes only; Doeren Mayhew is not rendering legal, accounting, or other professional advice or opinions and assumes no legal responsibility. Contact Doeren Mayhew for more information.

Covered Call Systems And Strategies

By Maclin Vestor

The cost of a call and the cost of a put are almost directly related. If you have a $40 stock, a $40 call and a $40 put will be almost exactly the same price most of the time. If there is a difference, the possibility of an arbitrage usually exists meaning that there is a 0 risk strategy (minus commissions) to get something for nothing. This is true whether it's a collar or another strategy. I don't completely understand the full process that allows for that to happen, but a complex series of trades usually makes it possible. So if the price of a call and put are going to be the same that means generally the higher priced calls are due to greater risk. Some reasons may be historical volatility, as that plays a roll, but the implied volatility, that is, how much people expect or are betting on the stock to move, becomes important.

One covered call strategy is simply to seek the maximum yielding calls to sell. If you decide on this strategy, you probably want to check the recent put volume on this month's contracts, and you also may want to make sure the company is solvent. It should have positive cash flow more current assets then current liabilities, and ideally increasing cash flow.

Often times biotech stocks will have negative cash flow because they have to spend money researching and eventually they hope to hit a major discovery. These stocks are very difficult to price as a discovery would make the company worth a lot, an approval of F.D.A. will also catapult the stock much higher. You also should look for some recent strength in the stock, and there should be no bearish chart patterns, that means no chart patterns as well as no sudden high volume sell offs recently and generally a stock that has had a sudden sharp drop is also a warning sign.

If you feel comfortable with selling these higher priced options, you want the sudden move that's expected to be upward if at all. You are in a way betting that a move will not happen. Once you identify a target, I recommend selling slightly deeper in the money calls as this will cover you more in a decline. You will be collecting the theta, which is the cost of an options potential for gains that the option buyer must pay.

However, if you seek the highest yielding covered calls you can sell, head over to optionsbuddy.com. http://optionsbudy.com is a great way to identify the highest yielding stocks. They also have a rating system, which I have not read about, but my guess is that may be based on historical volatility vs. implied volatility where implied volatility is what the investors expect (and what factors into the options price), not what has happen recently; and perhaps it is also based on the yield compared to the risk, the difference between the bid and ask price, the liquidity, and the market cap and other factors. Google for example, would need a lot more people to sell then a micro cap stock for the stock to crash. A stock with high float has a lot of traded shares already, so if suddenly people were to start selling it may not have as huge of an impact on the price. - 23223

About the Author:

Maclin Vestor teaches about various automated trading systems and teaches you to find a stock market trading system that works for you.

Doubling Your Money in Stock Market Trading!

By Samatha Ferguson

Penny stocks are a little known secret in stock trading. Few people look at penny stocks due to the unstable nature of the companies, but unstable is where the money is made in the stock market. The opportunity to make enormous cash is in penny stocks if you know where to look and how to play the game.

A typical penny stock is considered to be less than one dollar per share. Companies with stock that low tend to be very small companies or companies in bankrupt. Let's go even lower though. Look at the stocks that are less than ten cents per share. A little research will easily find a whole host of stock below ten cents a share, even well below a penny a share.

The idea is to find stock below a penny and do some research on the company. Companies will either be in bankrupt or very small companies. The next step is research in the companies. You can usually do a little research and get a one or five year history of that stock. The research will tell you everything you need to know to decide on which stocks to play.

There are two ways to play the penny stock game. The first method is to find stocks that have shown daily or weekly changes where the stock will double, triple, or more in value before settling back down again. It doesn't take much for a penny per share stock to double. For example, a one cent stock price going to two cents has just doubled. It is that easy and quick!

Once you find a stock with a history of doubling or tripling you are ready for the next step. You just need to decide how much you are going to start with for the investment. Now remember since you are buying penny stocks a little money will buy a lot of shares.

Lets say we found a stock that cost one penny per share. We buy one hundred dollars worth of that stock. We just bought ten thousand shares of that stock. All together the shares are only worth one hundred dollars, but we now have a position in that stock. Once you purchase the stock you only have to play the waiting game.

Like all stock, penny stocks change moment to moment in price on any normal stock trading day. A small change can be just a penny or as much as ten cents. Expect small changes of just a penny and as you watch your stock during the day, once it goes up even just a penny, it is time to sell it all.

Why sell now with only a penny change? Just one penny change has made you stock double in value to two hundred dollars. Don't get greedy and sell. If you used an online stock account, you got charged under $10 for buying the stock in fees. You will get charged another $10 in fees for selling. Subtract the twenty dollars from the two hundred you just sold the stock for and you made a profit of eighty dollars.

The major problem with people who play this game of doubling your stock is they don't keep it simple. Don't get greedy and don't buy stock with money you can't afford to lose. Like gambling stock trading is risky!

I have used this method many times to make a thousand dollars in a matter of a few hours. Don't expect the stock to go higher than double, it might and it might not. The risk is the stock could also go down, but you have to expect that to happen. Stocks go up and down all the time. If the stock goes down then you still play the waiting game; waiting for it to go higher than when you bought it. It might take a day or week, but more than likely you will make money if you can wait.

A second method of playing the penny stocks is to find new companies which have a very low stock price. New companies can be a great way to invest early in a company but like all stock you do not know if the price will ever go up very high. The best way to pick new companies it to take a look at the company and what they are working on and products they already have out. If the company is working on ideals that are along the lines of societys current issues, then you can consider them.

The only problem with the second method is that it can take months or years to make money. The money you can make will be far greater however than the first method. - 23223

About the Author:

How to Invest Today is a free website dedicated in helping new investors with investing for the future and making money. How to Invest offers daily updates and can help anyone learn the art of investing.

A Successful Currency Trading Online Business Requires Education

By John Eather

Any kind of investment business including currency trading online requires knowledge and education on the part of the trader in order for it to be successful. Anyone can enter this industry regardless of what career background they have, but in order to enjoy success education and training must be part of the equation for success.

Many people who have taken a leap of faith and jumped in at the deep end. Taking their hard earned money and opening a margin account may have has some success and made a profit. This is pure luck, they more than likely made losses in the long term.There is a psychology to foreign currency trading and most success stories indicate that certain steps were taken in order to ensure their success.

These successful people have recognized the fact that trading in forex is a specialized field. It is because of this the specialized knowledge is required. Any previous skills learned in a completely different profession might, or then again, might not have any bearing on their skills as a forex trader.

Another very important factor in becoming successful, is they have realized that they can and will make losses. These come just as easily as the wins in this industry. It is therefore vitally important to learn a logical and systematic method of trading. No one who is successful in forex trading just plunges headlong into it without a care in the world. They commit themselves to educating themselves on how to open trading accounts, learning about the trading platform and knowing when to trade and when not to.

Starting off small seems to have been the most popular means of starting up this business for successful forex traders. They also suggest you get mentoring assistance, stick to one currency and focus on it and never do it for a living until you are tremendously successful. - 23223

About the Author:

Want to find out more about currency trading online, then visit John Eather's site on how to choose the best forex trading robot for your needs.

The Beginner Guide To A Forex Advisor

By John Eather

Oh my goodness, I just started trying to figure out the FOREX system of trading and got so confused! I was looking for a Forex Advisor. There is a lot of info that a new person with little knowledge can certainly get overwhelmed with.

I know little to nothing when it comes to Forex and trading online but I want to learn about making money using this system. I've heard a lot about it lately on tv and in my spam folder and even the mailman brought me a piece of information on how to automate trading with a robot.

To clarify the word Forex means, "the foreign exchange market for currency it is also called FX and this is where the big banks and various institutions make possible the buying and selling of foreign currencies.

Foreign Excange market provides trade and investment which we need because we have a plethora of different currencies, such as the USD, Euro, Pound Sterling, Canadian Dollar, and all the giant corporations and banks that have the need to trade, or buy and sell these various currencies.

I was looking for easy and informative sites and came accross forex-guide.net, this site is excellent with a ton of awesome information for free as well as many links to sites that require that you pay a fee for the ongoing information they will give you.

If you really want to pay nothing and learn a lot, then go to forex-trader.com/fx-resources.htm, they will send you free information pages and resources by email. Or do what I did and watch guys teach for free just go to YouTube, you won't be disappointed.

There is so much information on YouTube it is overwhelming. I just typed in Forex and a list of options drops down, here you can choose Forex Training videos, I used the ones that had five star ratings and lasted more than 20 minutes. You won't learn a lot from little films. I hope this is of some help in your quest for knowledge. - 23223

About the Author:

Want to find out more about forex advisor, then visit John Eather's site on how to choose the best forex trading robot for your needs.