problems restructuring under difficult economic conditions.”
In particular, Clark recommends that Beale add the $2,000 prize money to his Roth IRA. “Within that account,” he says, “I would recommend investing the money in small- and mid-cap growth funds. The Roth IRA allows tax-free growth and tax-free withdrawals of earnings.” Tax-free earnings can’t be withdrawn from a Roth IRA until after age 591/2. By that time, if all goes according to plan, Beale will have had a prosperous executive career and need even more tax shelter.
|
Financial Snapshot: Edwin Beale |
|
|
HOUSEHOLD INCOME |
|
| Base salary | $53,000 |
| Total* | $53,000 |
|
ASSETS |
|
| Market value of home | $107,000 |
| 401(k | 22,000 |
| Brokerage account | 4,800 |
| Roth IRA | 1,250 |
| Savings | 1,100 |
| Total | $136,150 |
|
LIABILITIES |
|
| Mortgage balance | $69,000 |
| Credit card debt | 2,000 |
| Other debt | 1,100 |
| Total | $72,100 |
| Net Worth* | $64,050 |
| *Does not include possible bonuses | |
