Archive for May, 2010

My dad was a war hero who received two purple hearts.  The army was his passion and he was great at doing what others only feared. 

This is what his Commanding Officer, Captain William R. Carey of the Sixth U.S. Army Noncommissioned Officer Academy in Fort Lewis, Washington had to say about him in a letter my mom received on December 29th, 1964:

“I would like to express my deepest sympathy for you in the loss of your husband, Staff Sergeant Huotari.  His death came as a terrible shock to me and it was hard to realize such a tragic accident had occurred.

I had the greatest amount of admiration and respect for Staff Sergeant Huotari, his personal attributes as well as his work, and considered him as one of the finest persons that I have ever known.  The contributions he made to the young men that we teach here at the Academy will long we remembered, and his personal qualities and polite attitude will never be forgotten.”

I have often imagined how life could have been different if my father had not died and had been there to protect me, to offer his advise and to love me.  Instead, the Universe had another plan.  I had a dream that I could go back and change the past, so things could have been different, and then I realized that everything that had happened was really perfect and as it should be.  I finally found peace in his death.  He was not supposed to raise me, just give me life so I could experience my unique journey. 

I know there are so many other men and women who have lost their loved ones during war time and my heart goes out to all of you.  My dad had a wonderful and happy life.  Although his time here was short lived, his legacy lives on in the hearts of all those who were touched by him. 

Please share your story of your loved on here with us now.  My heart goes out to you.

For 25 years, I have been making contributions to my traditional IRA (Individual Retirement Account). I started my first IRA investment by saving $2000 limit annually.  When I became self employed, I created a SEP IRA for my personal retirement plan, and was able to save up to 15% annually.

All my contributions have been tax deductible, however, at retirement, the distributions will be taxable.  Will tax rates be higher or lower 10, 20 years from now?  What do you think?  I think they will be higher.  I don’t expect my income to be lower either since I am continuing to build an ongoing residual income from my businesses. 

 Therefore, I am considering converting my traditional and SEP IRA (which are all “pre tax” contributions) to a Roth IRA.  This will mean that I pay tax on all the dollars when I make this conversion from Traditional to Roth.   There are several reasons I am considering this tax planning technique this year. 

Planning opportunity:

1. A Roth IRA allows you to contribute after tax dollars.  You still get the tax deferral on your investment, however the income distributionscome out tax free.  (Contribute after – tax with tax free distributions)
2. In addition on January 1, 2010, the IRS removed the “Phase Out Limits” on converting to a Roth IRA.  In another words, prior to 2010, there were income limitations that restricted many individuals from converting their regular IRA to a Roth IRA.  Now all tax payers can convert regardless of their income level.
3. Because of the economy this last few years, some individuals my be experiencing a lower adjusted gross income this year, or be unemployed or in transition.
4. Investment values could be down which could be another reason to convert from Traditional to a Roth IRA.
5. For 2010 only, the IRA is allowing tax payers to claim 50% of the conversion amount as income in 2011 and the balance in 2012. 

Since we are just mid year into 2010 and your CPA is finished with tax season, this could be a good time to sit down and do some year end tax planning.  And it is always a good time to begin to take control of your finances by paying attending to your money.   For more information on IRAs and retirement planning, you can visit, IRA Guru, Ed Slott, who is also a Contributing Expert for the Smart Women’s Empowerment Institute 

On Tuesday, May 25th, I will have returned from my two week Mediterranean cruise and will be interviewing, Ameriprise Financial Planner, Deborah Linscott, on RothIRA, Inherited IRAs and planning your legacy for the future generations.  She is also an Elite Advisor with Ed Slott and one of the top IRA advisors in the country.  You won’t want to miss Smart Women Talk on May 25th, so stay tuned!

Do you have questions about buidling and growing your wealth?   Let me know what those are and I will do my very best to help you live with more purpose, passion and prosperity.  You can also send me an email at katana@katanaabbott.com