Retirement Reform Blog

Do you want to pay the piper now, or later?  Currently, only households making less than $100,000 a year or spouses filing jointly can convert their traditional Individual Retirement Account (IRA) into a Roth IRA.  But as noted in a recent Wall Street Journal article those restrictions will be lifted in 2010, so that workers of any income level can convert their traditional accounts to a Roth.  Traditional IRAs allow workers to save money tax free now and pay taxes when they withdraw their money during retirement.  Roth IRAs, on the other hand, allow workers to pay taxes on retirement savings now and withdraw it tax free later.   If you're not sure whether a Roth IRA is right for you, check out the NCPA publications "To Roth or Not" and "Would You Benefit from a Roth IRA?"  

Much attention has been given to the out-of-pocket health care costs seniors will likely incur during their retirement years.  (See our recently published Brief Analysis on this topic.)  A Fidelity study found that the average senior retiring this year at age 65 will need $240,000 during his or her lifetime to pay Medicare premiums, out-of-pocket costs, and the like.

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