1. Or IRAs Independent Retirement Accounts

2.  Capital Gains are taxes on earnings from investments  This is considered income

3.  This includes:  Interest on bonds  Dividend payments  Capital gain when you sell a stock for a profit  Even the interest you earn on a saving account

4.  This means you put-off paying taxes until later.  When you do this, you end up with more.

6.  2 Big Benefits:  You end up with more  You benefit now because your contribution is a tax deduction.

7.  An IRA is not an investment. It is just a signal to the IRS (Internal Revenue Service) not to tax until later.  You can invest in stocks, bonds, or mutual funds THROUGH an IRA.

8.  When you give a 1,000 dollars to charity or contribute 1,000 dollars to an IRA, the government considers your salary 1,000 dollars lower when it computes your tax.

9.  Your Salary – 10,000  The tax-rate - 10%  Your tax bill – 1,000 BUT You contribute 1,000 dollars to an IRA Your salary – 9,000 Tax-rate – 10% Your tax bill - 900

11.  Pro  Pay less taxes now  End up with more when you pay taxes later  Con  Cannot get to the money until you are 60-years-old

12.  Enter Senator William Roth and the ROTH IRA.  In 1998, the government created a new IRA that is very attractive

13.  Pro  NO CAPITAL GAINS taxes at the end  This means you will end up with more than a traditional IRA  You can take out the principal at any time for 1 st time home purchase  Con  No current tax deduction

14.  If your parents are saving money for you.  They could create a Roth IRA and then give you the money tax-free when THEY turn 60!!!!!!!