Yikes!! What is Obama Doing to my Retirement Savings???!!!

By JC Leahy

People need to understand the magnitude of what Obama is doing to us.   The Obama debt shown above doesn't include the $1.2 trillion new money "printed" through QE I and II, and doesn't include the massive, open-ended amount of money being printed now  at a rate of $40 billion a month with no end in sight through QE-III.  In other words, they are buying Treasury bonds on the open market using made-from-thin-air, newly "printed" dollars. Rather than admitting that they are printing money, they call this "quantitative easing."   And by the way, the 10-time multiplier effect  in reality turns $1.2 trillion into $12 trillion. Everybody agrees that creating this much new money will degrade the purchasing power of existing dollars, including grandma's retirement savings. It's called inflation. You can see inflation when you go to the gas pump or the grocery store or pay your winter heating bill.  For example, gasoline cost $1.95 when Obama became president and I paid $3.71 yesterday and thought it was a pretty good deal!!  Go to the grocery store and check for yourself: everything is rising in price!!  When you finance excessive spending by creating trillions of dollars out of thin air, existing money buys less.  This has the effect of stealing from grandma's retirement account to finance Big Government!!

Importantly, the above debt also does not include 5 trillion of Freddie Mac and Fannie Mae obligations, it doesn't included guaranteed obligations such as those under TARP, and it doesn't include 46 trillion of unfunded obligations such as Social Security and Medicare.  Consider these obligations, plus the astonishing level of "national debt" it's safe to say that with 12 trillion of new money plus unlimited QE3 money creation, you still ain't seen nothin' yet!!!

(ALSO SEE EARLIER ARTICLE: THE ROAD TO STAGFLATION)




PS - For those of you checking the numbers, it will be by the end of the Government's fiscal year 2013, the last fiscal year of the Obama Administration, that Obama will have added more debt than the first 43 presidents combined -- according to the Obama Administration's own projections.

2010 BIG CHANGES FOR ROTH IRA CONVERSION RULES !!!

By JC Leahy, MA Accounting
Maximum Legal Refund (TM)
Income Tax Preparation & Consulting
Silver Spring, MD 
Tel. (301)537-5365

Personally, I think that 2010 may come to be called the Year of the Roth Rollover. If you have a traditional IRA, you really ought to make yourself aware of some big changes that happen January 1. These changes result from 2 laws passed by Congress during the Bush administration, and they may help you as you struggle tobuild a secure retirement.

Here’s the "Roth Conversion" deal  in 2009, before the changes: If you wanted to convert funds from a traditional IRA to a Roth IRA and your 2009 tax return shows a "modified adjusted gross income" of $100,000 or more -- you were prohibited. If you’re married and filing a separate return from your spouse, you were prohibited. If you weren't affected by these 2 prohibitions and you, indeed, converted funds from IRA to Roth IRA, every single dollar converted added a dollar to your 2009 taxable income and thereby increased your 2009 income tax liability.

Fast forward to January, 2010. The $100,000 income prohibition and the married-filing-separate prohibition both disappeared! Poof! Furthermore, any amount you convert from IRA to Roth IRA in 2010 may not add a dime to your 2010 taxable income. You actually have a choice. Either pay taxes on the full amount in 2010 or pay taxes on zero. If you chose the latter, then you will have to split the additional income between your 2011 and 2012 tax returns. This amounts to a two-year interest-free loan from the government. What a deal!

So, why would you want to have a Roth IRA rather than regular IRA in the first place? Well, provided you follow the rules, your Roth IRA earnings will never be taxed. You won’t be prohibited from making Roth IRA contributions when you turn 70.5 year of age. And there are no mandatory withdrawals when you turn age 70.5.

These wonderful changes result from provisions of two Bush-era laws just now taking effect. These are the Tax Increase Prevention and Reconciliation Act (TIRPA) of 2006, and the Economic Growth and Tax Relief and Reconciliation Act of 2001 (EGTRRA).

If you have money in a traditional IRA, 2010 certainly looks like the year to think about making a Roth conversion. Check with your tax advisor.

2010 IRA (Roth and Traditional) Contribution Limits

Year AGE 49 and BELOW / AGE 50 and ABOVE

2002-2004 $3,000 / $3,500

2005 $4,000 / $4,500

2006-2007 $4,000 / $5,000

2008 $5,000 / $6,000

2009 $5,000 / $6,000

2010 $5,000 / $6,000
The above limits do not apply to Roth IRA conversions.