dh003i

Regarding Congress retroactively eliminating the benefits of Roth IRA's, what worries me is that they even have the possibility of doing this. I'm no lawyer, but in my simplistic civillian mind, it seems obvious that retroactive laws are bad and seem inconsistent with the Constitution and Amendments. Yet, the USSC has supported them (see DMCA). So, the question is, what legal deterrents could there possibly be to Congress retroactively eliminating the advantages of Roth IRAs? Regarding the vulnerability of Roth IRA's, waht I'm really concerned about here is if they are vulnerable to creditors when you file for bankruptcy, or lawsuit judgements. This wouldn't be an issue if you could just roll them over into a normal IRA (which is protected by all state laws, I believe)...but some law regulates that if a transaction is deemed as being done for fraudulent reasons (e.g., to avoid paying a lawsuit judgement, or creditor) it can be unrolled and undone. So, the issue here is how does on protect one's assets in a Roth IRA from these kinds of threats. If anyone knows of anyplace where the applicable state-laws can be found, it'd be useful. Furthermore, if anyone knows of any strategies to protect assets in a Roth IRA from these kinds of threats, that would also be useful.

After reading All You Ever Wanted to Know About Roth IRAs But Were Afraid to Ask, I'm wondering about protection issues regarding Roth IRAs. Specifically: Is a Roth IRA protected from the claims of creditors? Is a Roth IRA protected from the effects of bankruptcy? Is a Roth IRA protected from lawsuits? Is a Roth IRA protected from divorce judgements? Can Congress retroactively revoke the tax-free status of earnings in a Roth IRA? If they can retroactively extend copyright laws, why not retroactively extend taxes? Are the earnings in Roth IRAs exempt from taxes other than the capital gains tax, like state and local taxes? If they are, could states retroactively revoke those exemptions? I looked around on the web for information on this, but not much was helpful, other than some vague references. Regarding most of these, I believe that it is dependant on State Law. All states provided most of the above-mentioned protections for Traditional IRA's, but may not have updated their legislation to provide those protections for Roth IRAs. I even tried LexisNexis, but that gave me results that didn't appear to have anything to do with Roth IRA's. Specifically, I'm interested in NY laws, but those in other states may obviously be interested in the laws of other states.

Suze's package has absolutely changed in the past five years, moving from a major emphasis on equities to pitching to middle age uncertainty about having enough, when can you retire and what do you actual know about investing. Well, I don't watch the show that often, though I do understand what you're talking about. Suze has a rather annoying air about her -- like a cross between Judge Judy, Hillary Clinton, and Susan Estridge (the female counterpart of James Carvil, Clinton's hound-dog, who's also an obnoxious ass). Anyways, Suze is rather confrontational on her show, almost bossy. It makes the show difficult to watch, though I think for the most part her advice is good. I don't see her as a fear-monger, though. But, hey. Look at what Merrill, Fidelity and Schwab are now pitching. I'm a Fidelity customer, so I don't know much about what Schwab and Merrill are pitching; though I did read that they were recently convicted of defrauding investors, or something to that effect. Anyways, with regards to Fidelity, I don't see fear-mongering either (though I haven't seen any Fidelity commercials). In fact, when I was looking for a conservative investment, one of their online reps directed me away from the more safe Fidelity Mortage Securities fund, to the Fidelity Asset Manager Income fund, which is more volatile, but offers greater returns. My personal opinion on investment risk is pretty simple. You should know your investment horizon for money you diversify...if you need 1000 dollars in 1 year, then I think it's wise to invest it in the best-performing fund that has never been outpaced by inflation over a 1-year period. If you need 1000 dollars in 10 years, then in the best-performing fund that has never been oupaced by inflation over a 10-year period. building wealth has little to do with "luck" or "timing" or worse "a system"...Good investors think very long term and have a disciplined approach to balancing risk and reward. I believe that thinking in the long-term, having a disciplined approach, and balancing risk and reward is precisely the definition of "a system". Some timing is useful, so long as based on fundamentals. Whenever you look at a stock's P/E and use that to help you decide if it's a good stock to buy into at the moment, then that is to some effect "timing", though not the kind that day-traders engage in. You mention 50% in stocks. I find no one solution fits all. Some folks should be virtually 100% in stocks. Some less than 1/3. The choice has a lot to do with their investment goals, age and risk tolerance. Agreed completely.

I agree with much of what you're saying here. However, I'd like to add a few points. Suze Orman (I believe you're referring to her) is not feeding off of ppls anxiety. She is offering the same advice she always has. Max-out employer-sponsored 401k/403b contributions. Make debt-elimination a priority. If you have more credit card debt than you can pay off right now at this moment, you're in serious credit card debt trouble. Invest using dollar-cost averaging, and don't try to time the market. If you invest in individual stocks, look at the fundamentals. I'm a big fan of value investing, as well as investing in value-stocks where the companies have the potential and proven record of growth (a good example is Pre-Paid Legal....stock has stagnated since inception, but companies has grown for many quarters in a row now, is greatly undervalued, and has room for much more growth). I believe that too much emphasis has been placed on "safe investments", particularly given the current situation. The time to diversify away from the stock-market was when it was outrageously high -- particularly the Nasdaq tech-stocks. That isn't really market timing -- that's just saying, these stocks are selling with outrageous P/E's, and their PEG's can't match them, so it's absurd. I never understood the dot-com boom. The idea of making money by giving stuff away for free...something about it, just doesn't click with me. Maybe I'm too stupid to understand it. Right now is a time to start investing more heavily in stocks -- at least 50%. Fundamental's should definately be what's telling you what stocks, and mutual funds, to buy. Technical analysis (which is dangerously close to market-timing) should tell you when to buy (e.g., maybe a good time is after a bogus lawsuit is announced, or a strike, and the stock sinks). The problem is most people are afraid to buy stocks during such events, when they are in fact the best buys. Then the other problem is some people want to time it out perfectly -- buy when the stock is at rock-bottom. Not possible. I-Bonds are not necessarily bad. In fact, they are agood thing. I see them as a good alternative to keeping money in the bank or a money-market/CD, if you want to have a continuous amount of money in cash, and can contribute to them regularly, and start taking out of them after 5-years (or at least long enough after 1 year to compensate for inflation).