12/13/97: Tough Choices, from Forbes magazine (6/97). Excerpt: You can't be too careful with an IRA. What we are about to tell you is brain-twistingly complex, but if you ignore it you may pay a heavy price. The first rule of an Individual Retirement Account is that you want the tax deferral to work as long as possible. Just think: Every year you keep it going you get to use money that would otherwise go to the Internal Revenue Service -- a kind of interest-free loan from the tax collector. There are exceptions to this rule for high-net-worth savers threatened by the 15% penalty tax on large IRAs, but the keep-it-going rule holds for most people most of the time. The second rule is that you have to be knowledgeable and determined to get the maximum benefit out of the first rule. The IRS makes it hard, of course; it wants to collect tax on the income bottled up in an IRA sooner rather than later. Surprisingly, some IRA sponsors are arrayed against you, too. They should be working for you but, through ignorance or orneriness, they stand in your way.
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