One of My Heroes

One of My Heroes

            The late Senator William Roth of the State of Delaware is one of my heroes. This man persisted for years in trying to amend the tax code in order to create a way for average Americans to wisely invest hard-earned money so that it could grow tax-free and, under the right circumstances, be spent tax-free. Roth IRAs became available in the mid-1990s. I still remember my tax preparer’s near breathless excitement upon the introduction of Roth IRAs because it came with the one-time opportunity to convert a traditional IRA (where retirement withdrawals are taxed) into Roth accounts and spread the tax payment owed on the conversion money over a three-year period.

            During the year this opportunity was available, I converted my traditional IRA to a Roth IRA and spent the next three years working with my tax preparer to minimize the tax consequences of that conversion. What would compel me to expose myself to the possibility of tens of thousands of dollars of additional taxes? It was the Roth IRA.

            A Roth IRA is a unique retirement account wherein the account holder can make contributions of after-tax dollars. The money can be invested in almost any manner the account holder sees fit, and the investment grows tax-free. More importantly, once the account holder reaches the age of 59½ and has had a Roth retirement account open for five (5) or more calendar years, the withdrawals from that account are also tax-free.

            Diligent investors who consistently earn 12-15% a year on their money and consistently makes contributions to their retirement accounts can grow their accounts in their lifetime (due to the power of compound interest accruing tax-free) to become millionaires.

            I you want to know all the ins and outs of Roth IRAs, I highly suggest you locate a copy of IRS Publication 590 at, and read to your heart’s content.

            Another beautiful thing about Roth IRAs is that anyone who has earned income, irrespective of their age, can put money into a Roth IRA. There is so much more I could write about Roth IRAs that I could literally fill a couple of books.

            The purpose of this email is to encourage you to check the following three things:

1. Do you have earned income?

2. If yes, do you have a Roth IRA?

3. If yes, are you contributing money to it every year?

            If you answered no to any of these questions, I have to ask you why not? Why are you wasting this precious opportunity that Congress has given us so the average American citizen can become wealthy in one generation or less? Remember, it’s your money and you need to manage it wisely now.