| Every year about this time, people start talking | | | | may be a reasonable way toaccumulate wealth. |
| about and considering things like | | | | And the deferred taxes on your investment |
| IRA contributions. Most of the time, tax-sheltered | | | | income do makeyour savings grow much more |
| investments make great sense. | | | | quickly. Nevertheless, if you've already saved |
| The federal and state governments have | | | | enoughmoney for retirement, it's possible that |
| designed their tax laws to encourage suchsavings. | | | | you should consider other investmentoptions as |
| However, that said, there are three situations in | | | | well as estate planning issues. This special case is |
| which it may be a poor ideato use tax-sheltered | | | | beyond the scope ofthis book, but if it applies to |
| investments: | | | | you, I encourage you to consult a good |
| You know you'll need the money early | | | | personalfinancial planner--preferably one who |
| In this case, it may not be a good idea to lock | | | | charges you an hourly fee, not one who earnsa |
| away money you may need beforeretirement | | | | commission by selling you financial products you |
| because there is usually a 10 percent | | | | may not need. |
| early-withdrawal penalty paid onmoney retrieved | | | | Your tax rate will rise in retirement |
| from a retirement account before age 59 1/2. | | | | The calculations get tricky, but if you're only a |
| But you will alsoneed money after you retire, so | | | | few years away from retirement andyou believe |
| the "What if I need the money?" argument is | | | | income tax rates will be going up (perhaps to deal |
| morethan a little weak. Yes, you may need the | | | | with the hugefederal-budget deficit or because |
| money before you retire, but you willabsolutely | | | | you'll be paying a new state income tax), it |
| need money after you retire. | | | | maynot make sense for you to save, say, 15 |
| You don't need to save any more for retirement | | | | percent now but pay 45 percent later. |
| Using retirement planning vehicles, such as IRAs, | | | | |