A viatical settlement is the sale of a life insurance policy by the policy owner before the policy matures. Such a sale, at a price discounted from the face amount of the policy but usually in excess of the premiums paid or current cash surrender value, provides the seller an immediate cash settlement. Similar to reverse mortgages, viatical settlements involve insured individuals with a life expectancy of less than five years. In countries with high health care costs (such as the United States), this is a practical way to pay extremely high health insurance premiums and other senior care expenses that severely ill people face. Some people are also familiar with life settlements, which are similar transactions but involve insureds with longer life expectancies (two to fifteen years). - From Wikipedia and other sources 5/2007Save For Retirement With An Individual Retirement Account
Everybody wants their economic future to be safe and secure. We are bound to stop earning some day. Once that happens, we can either become dependent on our children or chose to live on whatever we had saved for this post-retirement phase of life. We can maximize our savings by timely investing them in good retirement plans. Individual Retirement Accounts (IRA) is one such government authored retirement plan which scores high on tax and retirement benefits.
There are two main types of individual retirement accounts: traditional IRA account and the Roth IRA. There are some restrictions over who can and who cannot open these accounts. Any earning individual can open the traditional IRA account whereas only those individuals can open a Roth IRA whose annual income falls below the notified limit. The two plans are discussed below:
Traditional IRA: The traditional IRA allows us to save and invest money while deferring taxes. This should be one's option if an individual expects to be in a lower tax bracket at the time of retirement. At the time of making contributions, the contributions to a traditional IRA are tax free.
Roth IRA: Roth IRA, like traditional IRA, is a retirement plan. It is different from traditional IRA as the Roth contributions are not tax free at the time of contribution. But the withdrawals become tax free with the time and become completely tax free at the time of maturity. This helps a candidate to begin contributing at a much younger age in order to get the best out of Roth IRA account without the burden of the additional tax to be paid.
There are certain rules in place when it to comes to withdrawal of money for both the types of accounts. Some rules are listed below:
* Any one below the age of 59 1/2 years can access his tax deferred IRA distributions without worrying about the 10% penalty.
* Any one between the age group of 59 1/2 years to 70 1/2 years can withdraw his money completely or a fraction of it without paying the 10 % penalty. However his withdrawal will be counted as his/her annual income and will be taxed accordingly.
* Distributions need to start at the age of 70 1/2 years in a traditional IRA. One, who turns 70 1/2 years of age and has a beneficiary, will receive maximum annual payments based on the joint life expectancy. If there is no beneficiary then the payments will be based on single life expectancy.
These above rules are some of the rules that are followed at the time of withdrawal. They appear complicated and therefore, there is a need for a financial advisor to guide one through. They can explain theses rules in a simplified manner to the IRA individuals and thus help them with these.
Michael Warner owns and operates http://www.iracontributionexpert.com IRA Contribution