From: acheng@ncsa.uiuc.edu (Albert Cheng)
Subject: Re: IRA info needed.
Originator: acheng@shalom.ncsa.uiuc.edu
Organization: Nat'l Ctr for Supercomp App (NCSA) @ University of Illinois
Distribution: na
Date: Mon, 23 Nov 1992 16:50:13 GMT


In article <1992Nov19.025222.28271@netcom.com>, sbale@netcom.com (Swamy S. Bale) writes:
>Hi everybody,
>
>I have some questions on IRA. I am working in a company which doesn't have 401k
>benefits. I know that I can open an IRA account. My questions are:
>
>Do I need to open an account in a bank or brokerage firm?

No restrictions at all.  But IRA's in regular banks accounts (e.g. CD's)
are insured by FDIC.  Non-banks types does not have that type of insurance.

>Is this mandatory that I should have someone manage my IRA account rather than
>myself?

Nop!  You can manage your own if you feel like to.

>How much of my money I can put in IRA each year?

At most $2000 a year for new deposit.  (You can transfer/rollover some
other pension-type account into IRA's.  That is a different story.)
BUT, if you have retirement plans (pension) at your employer, the
IRA contribution may not be tax-deductible.  (Even if it is, you still
have to pay tax when you withdraw it later.)  The tax-deferring part (i.e.
not paying tax this year) is a major consideration of having IRA.

>Can I open IRA account any time of the year?

Yes.  And for tax purpose, you have up to April 15th to make a contribution
to your IRA accounts but have it deducted from the previous years taxable
income.  E.g. if you do nothing 1992 but deposit $2000 into your IRA
April 15, 1993; you can still deduct $2000 from your gross income of
1992 when you file your income tax for 1992.
[I just started an IRA with Janus Group Funds but they don't allow
contribution such extension.  I.e. all contributions in a year are
grouped the same year.]

>I would like to maintain my money by myself rather than paying fees/commission
>to somebody else, to maintain my account. Also any information on other tax
>shelters is also appreciated.

It sounds like you have no IRA yet.  So, you are talking $2000 at most
for now.  Your options are bank IRA CD's (horrible rates now) or mutual
funds options (higher risks with potential higher return.)  There are
other more complicated options.  But my advice (just my opinion):

	1) Call IRS (1-800-525-1040) for a publication booklet on IRA's.
	   Read it.  Make sure you are qualify for the tax-deduction part.
	   Check with your Personnel office.  They should know.

	2) Start an IRA accounts with a bank CD because it is something you
	   understand now.  Take the tax-defer advantage this year.  This
	   is rather late for tax year 1992 and it is not safe to rush
	   into the mutual fund option before you can understand it.

	3) Study more about mutual funds, understand how they work and the
	   potential gains and risks.  Call them for prospectus (information)
	   and study them.  Ask for IRA information too.
	   When you feel you know what you are getting into, open an
	   IRA with one.  You may then transfer some of your bank
	   IRA to it or deposite some in it.  (You are not limited
	   to ONE IRA.  You can have as many as you want provided
	   the TOTAL contributions each year do not exceed the $2000 limit.)

	4) Hang around this news group.  You may learn much more.
	   
Good luck.
Newsgroups: misc.invest