Time to Get Retirement Accounts Ready for 2011

The end of 2010 approaches. It is time to look at your retirement accounts and plans before the new year. Several new laws have been passed that relate to retirement accounts. This article gives an overview of the changes so you can be prepared.

IRA Funding

If you have the extra money and qualify, think about funding a traditional IRA. The income you use will not be counted as taxable income. This works best if you need to reduce your taxable reportable income. If you don't need the extra money to reduce your income than ask your accountant if you qualify for a Roth IRA under the new IRA conversion laws. A Roth IRA allows you to accumulate tax-free interest that you don't have to pay taxes on when you retire and start withdrawals.

Small Business Jobs Act

President Obama signed into law this year a provision aimed at helping small businesses. The new law allows conversions of 401(k), 403(b) and 457 accounts into Roth IRAs. Doing so could move you to a higher tax bracket since you will have to pay taxes on the converted amount. As always, work with your accountant on such a major decision.

Buy a Rental Property

A lot of people have lost their houses this year. These former home owners have to live somewhere and are renting. Housing prices have decreased and if you have the funds it could be a good time to buy a rental property.

It is possible for housing prices to go down even more, but rental rates should be moving up. These former homeowners usually make good tenants. Your money may be better off in real estate than sitting in the bank being eroded by inflation. If you lose your job, rental income is a great thing to have.

Inflation is Already Here

The government has been printing a lot of money. The possibility of high inflation is becoming more of a reality. Now may be the time to put a percentage of your income into gold and silver. Gold and silver have dramatically increased in value in 2010. In reality, the price of gold never changes, only the value of the dollars used to buy it does. This means that high inflation is already here and eroding all of your assets that are denominated in U.S. dollars.

Final Thoughts

One last consideration is the government has been talking about controlling all private 401k's and IRA's. Some politicians want to bring your retirement accounts into the failing Social Security system. If your money is in gold, silver and real estate it will be harder for the government to take your wealth away from you.