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Author: CRAIG826 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75835  
Subject: Overall retirement plan approach Date: 4/9/1999 6:44 PM
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I'm a novice investor hoping to retire at 55 (20yrs), and have realized I've got to get more aggressive re. my investments to meet this goal.

Several questions:

(1) In setting up an investment account with a discount broker, what options do I have on setting the account up on a pretax (ie.. 401K, or IRA) basis?

(2) What's the Foolish thoughts on 401K's? Max them out due to the tax saving, inspite of limited investment options, or other thoughts....?

(3) My wife and I are involved in several charitable organizations, and on 'retiring' would like to increase involvement in our own charitable activities. My ideal is to set up our own non-profit, charitable organization now; give money to that organization; invest the given money; on retirement begin drawing a 'salary/expenses' from the organization for charitable activities. Has anyone done anything like this? It seems like there should be some tax advantages to this. This would be 'above board', ie.. we really would be 'earning' any salary drawn, or using expenses for charitable activities.
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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 9827 of 75835
Subject: Re: Overall retirement plan approach Date: 4/9/1999 7:30 PM
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'm a novice investor hoping to retire at 55 20yrs), and have realized I've got to get more aggressive re. my investments to meet this goal.

Just remember the Foolish retirement ratio, 20:1. That means if you want to be able to live off your investments indefinitely (assuming they are invested in stocks), never draw more than 1/20 its value in any year.

(1) In setting up an investment account with a discount broker, what options do I have on setting the account up on a pretax (ie.. 401K, or IRA) basis?

What do you mean by options? As an individual, you can only open a regular or Roth IRA. The IRAs are subject to certain income limits, with regards to their deductibility or availability. Any broker will be glad to open one for you. You can only open a 401k account if the company you work for sponsors the plan. If you are self-employed or have a small business, you have Keogh, SIMPLE, & SEP-IRA plans that you can open.

(2) What's the Foolish thoughts on 401K's? Max them out due to the tax saving, inspite of limited investment options, or other thoughts....?

Invest to get the maximum 401k employer match. Then, max out your Roth IRA, if you qualify (<$150,000 AGI, filing jointly). Then, if you have more money, max out your 401k.

(3)... My ideal is to set up our own non-profit, charitable organization now;...on retirement begin drawing a 'salary/expenses' from the organization for charitable activities.

You really need to ask this question on the Tax Strategies board. There are restrictions on charitable foundations with regards to their expenses. They have to disburse at least 5% of their income each year, for example.

For more retirement info, go to www.fool.com/retirement

Zev



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