Thanks meldy! I do have many places. I had this guy who has been working with my dear friend, who lost her husband very suddenly last year, helping me. I've been to the SSI retirement symposium so that I could hear what I might need to tell mom who is just about to retire (age 70 next year), and what I might start doing to position myself. I saw him in action there; he was giving the right advice. "Don't take Medicare until as late as possible", if nothing else, but there was more, and he was right on. I've been teaching my son that too, showing him how compound interest was the most important part, so much so, that he could invest X, by age X, and if it averaged X, then he'd have millions by the time he retired (way earlier than 65), even if he quit at a certain point... that he wanted to start now and doesn't plan to quit investing in it. He started his retirement nest egg at age 8 (three years ago), and will put it into his first CD by the mid-year next year ($1,000 minimum), which is pretty good because he started out with getting only $15 a month for everything he does, and although it's up to $45, that's all he ever get. Anything else, he'll have to work a job (to pay for a car, gas, insurance, designer clothes, etc.). He's never taken anything out of the retirement fund because he has another savings that he takes from when he wants the "big" things and already has spending money set aside. I think he'll do it. As long as some wretch doesn't get her hands on it later on. It has been fast because we knew how to pare down, set aside exactly what was needed for the bare bills, save as much as possible, and some small amount is now being added as investment. Some time next year, they'll get switched. The bigger savings will be all investment fund with a bit going into CDs. And I'll go back to my own personal having-fun-with-the-stock-market investing. I can make big bucks with that, even when the market is down. And God is good. That too. Moreso, because of that. :)

So do I. Congratulations on realizing your need and setting out on this journey of learning about your money and how to work with it effectively. There are two basic issues ... one is your income and how to deal with it to make each of those dollars coming in work most effectively. The other is your asset base and how to manage it to make it grow well, working harder for you than for the other guys ... and avoiding having too much of snipped off by the purportedly big-deal managers to slip into their pockets. Better to learn what you're doing, over the years, and become your own manager! Pay yourself those fees that they charge (probably wise to deduct the cost of some of your mistakes, as you learn). In the investment group that I've attended monthly for about 7 years, we call them the tuition fees in the University of Learning How to Manage Your Own Money! I bought some equity-based mutual funds over 20 years ago, charging 2.5% of the value of the current asset value of the account, annually. When you multiply 2.5 by 20+ ... what do you get? 50% of the value of my asset, right? Is that the original asset amount? No - the creeping value of the asset as it grew, over time. I started a thread (I think over on KT) a couple of weeks ago asking whether people had ever seen stock certificates grow like rabbits! Had a person bought 1 share of JNJ at the beginning of 1970 (I'm using this for illustration, not suggesting that you should buy it, or not buy it) about how many shares would they think that they'd own, now? If you go to Yahoo->Finance and put JNJ in the "Get quotes" box at upper left, you'll get a page that shows a lot of info about current situation of the shares, including a chart at lower right of the stock price movements today. Clicking at a long-term period under that chart will show you share prices over your choice of various periods ... plus info about several stock splits - twice 3:1, and 4 times 2:1. What does that produce? 1->3->9->18->36->72->144 ... right? Price in 1970 $180./share (in dollars each of which was "worth" a lot more than each dollar is now). Current price about $63.00. That is, $180. grew to about $9,072. How do you like them apples? Not only that ... I read somewhere a while ago about a numberof stocks which had increased their dividend annually for 25 years ... I think JNJ has increased theirs annually for 40 years, if I'm not mistaken. Which adds some sugar to the applesauce, right? When did you ever hear of a Guaranteed Investment Certificate acting like that? Also wise for you to learn to deal with both income and assets in a tax-effective way. If you can reduce taxes now, often a good idea to do so, if the system at issue is useful in your case. Deferral is frequently a good idea, as well, when available. In Canada, a number of people look at the current rate on a GIC and at the rates paid by a stock, and say they like the interest rate better than the dividend rates usually offered. But when Canadians earn a dividend on a Canadian stock, the tax rate used to be lower, and last year the system of calculation changed to make it even lower again. I can't believe how many Canadians I've run into over the years who didn't know that! Quite often ignorance carries a substantial price. I think that I've said to thousands, over the years, that learning how money works is an interesting hobby ... **that pays well**!! (I've said it so often, around here, that I think that people must be getting sick of hearing it!) Not only that, if you put your dollars into a investment where their numbers are guaranteed not to shrink ... they're almost always guaranteed not to grow either. I bought a stock over 40 years ago for about $4. and change, which at that time paid about a (tax-advantaged) nickel or a dime. Over the years the value of that stock has gone up, down and sideways. I could have sold it last May for about $107. ... and it pays me an annual dividend now of $3.48. There's one catch - it has been doubly involved in the U.S. sub-prime mortgage debacle. The share price dropped to the $80.s, then recovered to near $100., then slipped back into the $80.s ... and in the past few weeks, as the sub-prime issue got more complex, far-reaching and distressng, the share price dropped down through the $70.s, into the $60.s, closing since the first of the year in the $60.s ... and I suspect that the dividend rate will likely be cut. Am I about to sell it? No. I paid $4.20 over 40 years ago, and if I sell now, I deduct the $4.20 amount that I paid from the current $68.20 or so, leaving me with $64.00 capital gain. I divide that by 2, leaving me with $32.00 on which I must pay tax at my usual rate (i.e., added to the top of my other income this year). But it does leave me with the other $32.00 realized free of tax. However, I'm getting close to 80 years of age (79 next Wed.) and my current tax bracket is lower that will be the case if I leave all of those assets intact till I kick the bucket - for then some of them will be taxed at lower rates, but after that's used, others will be taxed at higher rates until they get to the top rate, and my executor will have to pay that on some of those realized capital gains, then. Also ... since I have no spouse (to which the tax-deferred retirement account could be transferred, tax-free at the moment, to be added to her assets, to provide her with income and on her death to have the residue added to her income and taxed then, at whatever rate) they'll be added to my income in that year, as well. Likely taxed at top rate. I've thought of selling some of the stocks that I've held for years, in order to have the taxable portion of the capital gain taxed now, at my usual lower rate ... ... but if I do that, I have fewer dollars to re-invest, to go on not only growing, but adding to earnings in those years, until my demise. As it is, I add those $3,000. or so that I'm required to withdraw from my tax-deferred retirement account annually to my annual income. Do you think that I should follow the advice of some hot-shot financial advisors who tell how to get that payment out tax-free? Borrow $50,000. to invest it in a variety of stocks, using well over $100,000. (I wish!) of stock certificates as collateral, making it a fully secured line of credit, at interest of 6%, i.e $3,000. per year, using my $3,000. annual payout from my retirement account to pay the interest. My deal with the lender is that I pay interest only on the loan. As the loan is used for investment, the interest is deductible. As an old fart that doesn't want to take heavy risks, I invest in some quality Canadian stocks - paying about 3% interest, and as they are taxed at low rate, I have about 2.5% after-tax income, which in other circumstances I would use to help pay the interest on the loan. Suppose I'd borrowed that money 15 years ago, paying interest only through those years. If my Dad died and left me $50,000. as a legacy, and I took it to the bank to pay off the loan, how much would I owe them? That'd be $50,000., right? That would have bought a lot of good things, 15 years ago ... much more than now. I gained from inflation. Suppose you'd put $50,000. into the bank, 15 years ago, and the bank paid you the agreed upon rent on your money, in the years between ... and you went to collect the value of your GIC today ... how much would the bank give you? Right! Exactly $50,000. That would have bought a couple of good cars, 15 years ago ... not now. I gained from inflation ... you lost. Such strategies should be used with discretion, taking into account various possible scenarios, some of them quite unattractive, with the operator able to deal with them without serious inconvenience. I never want to see my friends get margin calls on such loans, unless they're able to meet the shortfall, whether with other assets ... or immediate cash. Good wishes for using both your income and assets increasingly skillfully! As you have further questions, feel free to ask. If some of them seem a bit too private for you to feel comfortable with discussing in this public place, I'm sure that several of us who have responded here would be pleased to offer you our opinions should you contact us privately. ole joyful

---""Personally, I dont think it is smart financial planning to have your entire life savings in your retirement account." Why not?"" I'd like to clarify the above response. The only exception that I can think of is an emergency account.--- Assuming you are funding your retirement account appropriately to provide adequate retirement income, why would you put additional savings into retirement accounts? Once there, you can't use them easily and without penalty until you are retirement age. No, tax savings from tax-deferred accounts are not inconsequential, but neither is the freedom that comes with having money available to use how when for what you want. I am putting money into a combination of 401k and Roth retirement accounts at a rate which will conservatively provide me with adequate retirement income. This is less than the max--(although well over employer-match). Every thing else goes into ordinary ol' non-tax-deferred investment accounts. It's not really "emergency" money--- i also have 6-month living expense emergency funds in my bank account. But I am in my 30s. Why would I put any money above and beyond what I will need for retirement somewhere that I can't easily reach it for the next 15-20 years? Maybe I'll want to go to grad school and want to use it for tuition. Maybe I'll get married and want to put my husband through school. Or my husband's kids. Maybe I'll want to buy a bigger more expensive house and want to use it for down payment. Or a second vacation and/or investment home. I might want to take a year off work and travel. I might want to take a year off work and be a mommy to a new baby. I might not *want* to take a year off work but be forced to when I'm fired from my current job and it takes me a year to find a new one. I might want start-up money for my own business. I might have a sudden desire for one of those convertible Mercedes two-seaters (is it the SL i think).... I might I might I might. Freedom (and security) is "why not?" (which are the same reasons btw that I'm saving it in the first place rather than simply spending everything above and beyond what I've decided I need to save for retirement)

You will have to pay taxes on whatever amount you convert to the ROTH. The traditional IRA's permit a tax deduction for the amount contributed in a year, with a ROTH the contribution is after tax money. I guess how much you opt to convert would depend on your tax bracket and your ability to pay the taxes on it and how soon after your retirement you plan to begin withdrawing the funds. . I converted the entirety of my IRA money back when you were first permitted to do so. If I remember correctly, I had between 3 and 4 years to pay the taxes on it. I'm glad I did it then. Now the money grows TAX FREE and there is no minimum age at which I must begin withdrawing the money.