Converting to a Roth IRA

Let's assume that you like the idea of saving for retirement and using a tax-deferred or tax-free method of doing so. Let's further assume that you are married, that you and your spouse are both around 40 years old, and that your total income is less than $150,000 per year. Which IRA, traditional or Roth, would be better?

First we'll discuss the basic differences. Contributions to a traditional IRA are tax-deductible in the year made. That means that our hypothetical couple can reduce their adjusted gross income by $8,000 by making the maximum contributions to their individual IRAs. If they are in the 25% tax bracket, then they will save one-quarter of the total contributed, or $2,000, on their taxes due for the year. Therefore, in addition to that savings, they only need $6,000 to fund their contributions.

Kennedy targets Social Security, retirement benefits

State Treasurer John Kennedy is stumping for federal legislation that would ease "pension offset" restrictions on government retirees and thus give them better retirement benefits. It's the kind of issue a U.S. Senate candidate might bear hug, or the sort of wonkish idea that naturally appeals to a guy like Kennedy, a Democrat for now (he has been courted heavily by the GOP for more than a year). So what's motivating Kennedy to promote federal legislation? At this time he clearly is not running for governor, but he may well have his eyes on the U.S. Senate seat currently held by Sen. Mary Landrieu, a Democrat who is squarely in Republican crosshairs. Landrieu comes up for re-election next year, and Kennedy hasn't been sheepish about the possibility his candidacy. Taking a loud stance on the proposed change to the Social Security law allows him to reach out to a Democratic base that could easily be transferred if election conditions were right.

A good session for retirement sector

With the Washington Legislature winding down, retirement-industry experts were predicting last week that the industry would reap far better legislative gains than it had expected when the session began. Even those gains, though, would fall short of what the industry needs, they say. Budgets passed by both the House and Senate included about twice as much money for nursing homes and assisted-living facilities as the increases that had been proposed by Gov. Chris Gregoire in her preliminary budget. Meanwhile, a bill that would protect senior citizens from living-trust scams has passed both chambers, as has a measure that would grant guardianship services to low-income seniors. This is a good start, says Gary Weeks, executive director of the Washington Health Care Association. Still, the additional money earmarked to fund nursing homes and assisted-living facilities wont come close to covering the Medicaid reimbursement shortfall that retirement facilities suffer, says Weeks.

Think it’s time to retire? Not so fast

John Sayles has worked for Stanley Consultants in Muscatine, Iowa, for more than 40 years doing engineering and environmental planning for communities but at age 73 he's still not ready to clean out his desk and head for the golf course.

“I'm having too much fun," he says about his decision not to retire at 65.

Sayles was given the option by his company to phase into his retirement when he was ready, and that meant going to a four-day week at age 69 in 2003, then scaling back his hours in subsequent years. He now works one day a week on average, but often puts in 40-hour workweeks depending on the project.

“I would recommend it to anybody," says Sayles about his non-retirement plan. “It keeps your hands in it, keeps you young and moving."

It appears more and more of the 60-plus crowd wants to keep moving as well, with 25 percent of this population working in 2006, up from 20 percent just 10 years ago, according to the Bureau of Labor Statistics.

Retirement on the go!

In the West retirement is often viewed as a time of rest and relaxation. Still, it comes with its challenges. It is not unusual for people in their 70s and 80s to travel abroad. Recently, Elsie, age 83, from England came for a visit to see her daughter here. I was amazed with her get up and go. What's the situation in Turkey?

Have you ever wondered why there is a long line of middle-aged and elderly people in front of certain banks at a certain time of the month, whether it rains or shines? Most retirees are paid once a month. It is best to avoid going to that bank on that day.

Turkish women may retire after working for 20 years. Men must work 25 years before they can retire. Most visitors to Turkey are usually surprised by the number of middle-aged people they meet who say they are retired.