If you don't have a typical retirement plan offered by your employer and you are exempt from things like Roth IRAs because you live abroad, how can you invest without getting hurt tax-wise?
204282
I just spoke to the principal of an international school about this last week.  His school has worked out a Roth with an office that is in a U.S. territory nearby.  The tax is prepaid so there's no tax or penalty paid at retirement.  Email a investor in the Mainland to see what they can offer.  Some offices are just ignorant of the law, as most folks are for most things like voting, taxes, shipping things to people who are abroad.  You may want to email an investment group someplace like the Virgin Islands, Guam, Puerto Rico...  They're more familiar with policies and retirement programs for Americans living outside the Mainland.
369398
You can ALWAYS take your own contributions out of a Roth IRA, as you say, they are after tax earnings and the IRS doesn't care.\n\nThey do care about the earnings however.  If you take the earnings out under age 59 1/2, regardless if you meet the 5 year rule or not, you pay taxes and a 10% IRS penalty (unless you meet an exception).  The only exceptions to this rule are if you meet the 5 year rule & are disabled, dead, qualify for a first time home purchase, are taking 72(t) distributions, have qualifying medical expenses, using the money for college, you're paying medical insurance after losing your job or if the IRS is penalizing your IRA.\n\ncheck out page 60 of IRS Publication 590 (see the link) for all the information you could ever want to know about Individual Retirement Arrangements!  Have Fun!!!
426395
Your best bet is to put as much away as you can into your bank account, and do not be tempted to spend it.\n\nI would not go into the investment funds in the short term, but possibly in the longer term.
40327
Don't confuse the term "broker" with fund or investment. I can have my IRA with my broker, Merril Lynch and invested in mutual funds from Oppenheimer and American.\n\nIt sounds like your IRA is invested in an international fund that is underperforming its peers. First, I hope just a portion of your IRA assets are in this investment. You should be diversified across several asset categories, not just international equities. It is the job of your broker to help you determine what the right mix of assets are and which investments to use to fit into the allocation.\n\nIf you are not happy with your broker's advice in addition to the performance of your international fund, then I would consider changing brokers. However, if you like your broker but not your international fund, tell him/her about your displeasure.
312612
There are a lot of rules on SEP IRA's. It's not common to REQUIRE employees to pay in  but if you don't, you will not be eligible for employer contributions (unless your employer is extremely extra-generous).  Their statement that a contribution by you is "required" may really mean it's a requirement to contribute IF you want the employer match; they may just have worded it strangely.  Usually if you do not contribute to your own IRA, the employer does not either.  In fact, I have never heard of an employer putting money in someone's IRA or 401(k) regardless of the variety if the employee does not make contributions (although I am sure it could happen).\n\nContributing to your SEP IRA is a really, really good thing and I'm not sure why you'd want to bypass that--- it lowers your taxable income (this is super important, especially if you are on a 1099 form) and your employer match is basically free money--- you don't have to do anything to get it except put away some of your own money for retirement.
21001
What type of investment is going to held in the IRA? Stocks, mutual funds, cds?\n\nThis not a pyramid scam. From what I hear they are a reputable company. \nYou should get an IRA for yourself, it whether it is with them or another company. The most important thing is the investments being held in IRA. You want to look at past performance of the investment as well as the consistency of the investment. Look for one with consistently good returns not necessarily the highest return last year.
250270
Difficult.  The US Treasury will keep assessments of this sort of information but it is not made public.  Investments are made through brokers and the name of the underlying client is confidential, unless subject to a court order.\n\nAny foreigner investing in the US market has to fill in a W8-BEN form for the IRS which clarifies their tax position.  You might be able to come up with a figure by approaching the IRS and asking if they release summary data from these forms.
168854
In general, yes.  US rules governing taxation of international business are among the most complex tax rules in existence.  Coincidentally, I've spent the last 30 years learning them.\n\nIf you invest in a business directly as a branch/proprietorship or through a partnership, you will pick up your share of the income just as you would in the United States.  You may be entitled to a credit for any foreign income taxes that you pay.\n\nIf you invest through a foreign corporation, you may be able to defer income until you receive a dividend or sell your shares.  However, there are elaborate rules which in some cases require you to pay tax on undistributed income of a controlled foreign corporation.\n\nDepending upon the size of the investment, you should get appropriate professional advice.  Remember that free advice is worth just what you paid for it!
606060
Very few of the answers above do make any sense.  Registering as a company does not make sense.  First, you have to be a legitimate self-employed entity.  I gather you are not.  Second, at your earnings level, your tax liability would be higher as a corporation vs an individual. \n\nAlso, adding additional personal exemptions on your W2 as suggested by others does not work either.  First, they are illegal.  Being single with no dependent, you just can't claim additional personal exemptions.  Even if this was legal, it would still not work.  It would increase your take home pay marginally.  But, it would increase your tax liability at filing time.  So, you have to try something else. \n\nBuying a home will result in substantial tax deductions because the interest component of your mortgage and property taxes are tax deductible.  However, I am not sure buying a home makes sense right now.  They are staggeringly expensive.  The mortgage will wipe out your cash flow.  Forget the good life.  Also, from an investment standpoint over the long term, I am not sure that a home is a better investment vs renting, and using the savings to invest in a diversified portfolio of stocks and bonds index funds. \n\nHere is what I think makes better sense for you.  \nFirst, realize that a 29% income tax rate for the amount of money you make is extremely low.  It has to be one of the lowest income tax rates of any developed country.  \n\nSecond, maximize your funding under your company's 401K plan (at least reach the minimum level qualifying for the company's matching.  It is typically 3% to 6% for most companies).  That will reduce your taxable income and give you an automatic 100% return on your money because of the company's matching. \n\nThird, invest the maximum you can in a Roth IRA (maximum $4,500).  At your income level, you don't qualify for a traditional IRA anyway.  And, for you a Roth IRA is better anyway, since you will never have to pay taxes on those funds. \n\nFourth, consider donations to your favorite charities.  These will reduce your taxable income too.  \n\nFifth, put some money in your company's flexible spending account for covering out of pocket medical expenses.\n\nSixth, if you have some extra funds for investments consider Muni bonds.  On an after tax basis, they provide a higher return than taxable bonds because their interest income is not taxable.\n\nIn summary, I gave you several recommendations to increase your taxable deductions.  These include the 401K, donations, flexible spending account.  I also gave you recommendations to boost your tax-free investment income: Roth IRA, and Muni bonds.\n\nIf you need any clarifications don't hesitate to contact me through "Answer."  And, I'll revise my answer accordingly.
26042
good question.  401k's are excellent vehicles for preparing for retirement.  The greatest part about them is that usually your company gives you free money when you participate, called a match.  The way it usually works is that you decide how much, either dollars or a percentage of your income, you want to put in to the plan.  Then you decide which investments to pick (this can be tricky without knowing what they offer).  Ask the person offering the plan to help. Use a mix.\n\nWhatever you put into the plan is deducted from your income.  Heres an example:\n\nYour income:               $40,000\nContribution amt:   5%:    $2000 \nCompany match 50c per $:   $1000 \nup to 5%                    \n\nTotal contribution:        $3000\n\n(New taxable income:$38,000)\n\nIf you do this until normal retirement age of 60 and get a 10% return on your money over that time, you'll end up with almost $1,200,000.  \n\nSince now youre only taxed on $38,000, when you decide to retire and get your money you have to pay taxes on all the money you take out (not the whole $1.2 million unless you take it all at once).  If you take it out before your 59 1/2 you will have to pay an additional 10% penalty on whatever you take out. There are exceptions.\n\nThese are pretty much the pros and cons, but if you start now and stay consistent you'll be able to retire very comfortably.
568899
You may be able to borrow some from your IRA account but I would not recommend it.  Typically it would be for a home purchase and not home improvements.  Honestly I am not certain so you may want to take a look at publication 590 from the IRA that details out the rules for the IRA in plain english (which helped me quite a bit!)
414674
It makes sense to have them in one spot so that you can easily manage all of the funds and choose an appropriate asset allocation for your needs.  If your current employer has a 401k that you are eligible for, it usually makes sense to roll it over to your current employer's plan since you cannot roll funds out of the plan that you are currently in until you terminate employment or retire.  \n\nIf you are not eligible for the 401k at your current employer, I reccomend opening an IRA at Vanguard.  I work for a direct competitor of Vanguard, but I still believe they have better solutions for individuals (I know, I should go work for them).   \n\nIf you are not a saavy investor, make it easy on yourself by investing in an "Asset Allocation Fund".  The Vanguard funds are called "Target Retirement 20xx".  You choose the year that is closest to the one in which you will retire.  The fund manager wraps many funds into a single Target Retirement investment that is suitable for someone who is retiring in that particular year.  Lets say you intend on retiring in 2035.  Choose the Target Retirement 2035 fund.  As we get closer to 2035, the investment gets gradually more conservative.  Many fund houses have similar types of investments.  These are hands down the best investments for people who don't want to waste their time picking out individual funds that suit their needs.  \n\nGood Luck
264612
Fidelity, Vanguard, & T. Rowe Price all offer monthly deductions from your checking account into a series of no-load mutual funds. The charge is a percentage of your total investment each year. If you chose an Equity Index Fund, one that tracks the overall market, the fee is approximately $3.50 for every $1000 you invest, significantly lower than elsewhere.\n\nWith these companies you can open either a taxable account (you pay taxes on the dividends each year and taxes on the gains when you sell) or you can open an IRA. You pay no taxes on anything until you reach retirement age. If you make less than $100k you can open a Roth IRA. With a Roth you can take money out early to buy a house or to go to/go back to school. \n\nAll three companies listed up top offer a wide variety of low expense mutual funds and won't try to upsell you on more complicated intrusments. If your company offers a 401k or something similar I would do that before I did either of the above options.
24330
If the employer provided a match, then yes.  If not and they have a match with the traditional 401k I would contribute to that.  If no match to either, then I would invest outside of my employer.  First in a Roth IRA and then in I bonds and mutual funds.
554696
A roth account might be good or bad for you.  They're not good for everyone.\n\nA 401k or IRA is just a type of account, and has nothing to do with how much of a return you can get from your investment.  If you are investing in mostly a diverse mix of stock funds, you should expect a long term average return of 7-9%.  In some years you will get more (like 13%), and some years you will lose money).  In either type, you'll be investing in a mix of mutual funds.  The benefit of a roth IRA has to do with taxes.\n\nHere's the benefit:  With a 401k or traditional IRA, you pay no income taxes now on the money you put in.  You pay income taxes when you withdraw the money in retirement.  With a roth IRA, you pay the income taxes now, and pay no taxes on the money you withdraw in retirement. \n\nIf your income tax rate is lower now than it will be in retirement, you do not want a roth account.  If your income tax rate will be higher in retirement than it is now, then a roth account would be good for you.\n\nHERE'S HOW YOU SWITCH:\nYou "rollover" your 401k balance to a traditional (pretax) IRA.  That means you tell the company that has your 401k to transfer the money directly into an IRA.  As long as you don't receive a check payable to yourself, you'll pay no taxes or penalties.  You then "convert" the traditional IRA to a roth IRA.  This is something the company that handles the IRA does for you.  Basically, they take taxes straight out of the IRA and send them to the IRS.  This makes the money in the IRA after tax, or "roth" money.\n\nBUT...\n\nTo be able to transfer the money from the 401k to the IRA, you'll have to have already stopped working for the company.  AND your company might have the "roth 401k" feature, which allows you to contribute to your 401k plan with after tax money and have exactly the same benefit as the roth IRA.  ALSO if your company matches your contributions to your regular 401k, that will probably outweigh any benefit you could possibly get from the roth IRA.\n\nYou need to talk to the company that manages your 401k plan to find out what your options are.  And call a company that does IRAs to find out more details on the roth IRA to find out if it would be a good fit for you.  Try Fidelity or Vanguard.
613292
Since a regular IRA has tax-deffered dollars, you are taxed on all of it if you withdraw it and don't roll it over into another IRA of any type.  You also are penalized 10% of the value of the account if you are younger than 59 1/2.
204258
try to deffer the payments as much as possible so that if this ends up being you only source of income then you will end up paying less taxes i don't think that it will be tax free. unless it is a roth IRA where you paid taxes upfront to later have tax free money when you get the money.