If there is any consolation to be taken from the past eighteen months, it is that most people pay more attention to their financial picture – not just their stock and bond investments, but savings and spending habits as well. However, most people do not have time to focus on their savings.

Let us take an objective look at how to improve your finances – you will be surprised at the results. Through simple measures you can make sure your finances are back on track.

Our second opinion will be practical – through inventory of your assets and liabilities, i.e. using some savings in a cash account that yields zero to repay certain types of debt. We will revisit your retirement goals, explaining the impact of inflation on your nest egg. We will help you save, save, save. We will help you to be smart about your different insurance plans.

People should look at finances the way companies do. You need to protect the value of your work. We wouldn’t let panic dictate investment choices. Last year’s losses had many people changing their asset allocation and diversification strategies. Regardless of what the market is doing, sticking to a strategy that matches your investment principles is important especially when it comes to risk.

Make sure you can find someone you can trust. Get a second opinion and keep asking questions. We are here to help. Your success is our success.

Conveniently located in Central New York state, Ann Wolfson Associates is a financial planning and consulting firm dedicated to helping individuals, families and organizations reach their financial goals. If you have questions about this article or if you would like to become a client of Ann Wolfson Associates, please call (315)449-4730.

With a regular IRA, contributions are typically tax-deductible, but once you turn 70 and a half years of age, you must take out a certain amount from your IRA each year. Plus, all withdrawals from your IRA are subject to income tax. In contrast, withdrawals from a Roth IRA are tax-free – which is what makes the Roth IRA great for estate planning.

With a Roth IRA, you are not required to withdraw at any age. The entirety of a Roth IRA can be left to your heirs and the assets will not be subject to income tax for your heirs.

This is a good time for many people to convert from a regular IRA to a Roth IRA as many IRAs may have lost value due to market conditions. Contributions to a Roth IRA are taxed as they are contributed. Therefore, converting your IRA at a low point can reduce your tax burden.

Since withdrawals from a Roth IRA are tax-free, you won’t need to worry about tax rates in existence at the time funds are withdrawn from a Roth IRA in the future.

Under the new legislation passed by Congress, taxpayers can convert existing IRA or 401(k) accounts to Roth IRAs in 2010 and delay paying tax on the converted assets until 2011 and 2012 (50% of the tax due each year). If you have made non-deductible contributions to your IRA prior to converting it to a Roth IRA, you may not even owe tax on those contributions.

Also, you do not need to convert your entire IRA or 401(k) at once. You can convert to a Roth IRA over time. You can even undo a Roth IRA conversion without penalty until October 15th of the year in which you converted the assets.

After converting to a Roth IRA, you can contribute additional money into the Roth IRA each year, unless your income is above a certain threshold ($120,000.00 for single taxpayers and $176,000.00 for married taxpayers). If you exceed the threshold, you can contribute money to a conventional IRA and then convert those assets into your Roth IRA.

Roth IRAs have been a great tool for retirement planning, but they are now becoming a fantastic tool for estate planning. Talk to your financial professional to get all the details.

Disclosures: Roth IRA earnings withdrawn prior to the end of the five-year aging period and prior to reaching age 59.5 will be subject to a 10% early withdrawal penalty unless used to meet qualified expenses. A distribution from a Roth IRA is tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59.5, death, disability, qualified first-time home purchase.

Conveniently located in Central New York state, Ann Wolfson Associates is a financial planning and consulting firm dedicated to helping individuals, families and organizations reach their financial goals. If you have questions about this article or if you would like to become a client of Ann Wolfson Associates, please call (315)449-4730.