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Your Financial Priority  -  Life is filled with temptations which require money. For many, paychecks seem to miraculously vanish on living expenses, car loans, and the mortgage. But the most valuable thing you can do for yourself and your family is to start saving money immediately so compound interest can work for you

What is a FICO score? It is an acronym that stands for Fair Isaac Corporation. It is a rating system that tracks the clues left by you in your credit history.

* Your payment history accounts for about 35 percent of your final grade (the more recent the late payment, the more damaging to your score); how close you are to your credit limit weighs in at about 30 percent (owing a little on a couple of different cards is better than taking one card to the max); credit history counts for about 15 percent (so it is important to establish a credit history early on since no credit is the same as bad credit); and, new credit accounts for about 20 percent (so don’t apply for credit indiscriminately since it may backfire). (By Julie Stav*).

What is a 529 savings plan?  -  529 Savings Plans are tax-deferred qualified tuition program. It is designed specifically to create savings for higher education. It can used at any eligible college, university or graduate school in the U.S. Tax-deferred growth on earnings and federal income tax-free withdrawals set 529 savings plans apart from other college savings investments.

What Is an Traditional IRA?  -  An Individual Retirement Account (IRA) is a brokerage account that allows earnings to compound over time on either a federally tax-free or tax-deferred basis.

Investments in tax-advantaged accounts can compound more quickly than those in taxable accounts. Beyond an employer-sponsored retirement plan such as a 401(k), a Roth or Traditional IRA is widely considered the most advantageous retirement savings vehicle available.

About Roth IRAs  -  Your tax filing status: single with an Adjusted Gross Income (AGI) up to $95,000 ($110,000 for partial contributions); married filing jointly with an AGI up to $150,000 ($160,000 for partial contributions).

- Federal tax-free growth
- Contributions to your Roth IRA may be withdrawn at any time without penalty or taxation.
- No mandatory distributions   -   - No age limit for getting started*

Traditional IRA - If you don't qualify for a Roth IRA, a Traditional IRA is a terrific retirement savings option.

- No income limits   -   Assets grow tax deferred   -   Contributions may be tax-deductible

The New Roth 401K IRA   -   Effective January 2006, a new retirement fund will be a hybrid of a traditional 401(k) and a traditional Roth IRA called the Roth 401(k).

The new Roth 401(k) works almost the same way as traditional 401(k) plans. Workers can invest a portion of their income into a fund along with contributions from their employer. The difference is that the traditional 401(k) is funded with “pre-tax” dollars and the Roth 401(k) plan uses “after-tax” dollars. However, with the Roth 401(k), withdrawal of your money at retirement will be tax free like a Roth IRA. The traditional 401(k) plan defers the tax owed during your career until retirement.

It is important to note that no employer is required to offer this new Roth 401(k) plan.

Employees should begin to inquire as to whether their employer will be offering the new retirement plan in 2006. Contribution limits for the retirement plans are: in 2005, $14,000 for a 401(k) and $4,000 for an IRA, whether Roth or traditional. In 2006, this amount will increase to $15,000 for both 401(k) and IRAs.