Money - Where To Put It

The question lies, if you have any extra money available each month, where should you put it? While it is nice to have some extra cash sitting around the house, shoebox, safe, the ice box or under the bed (believe it people still do this) that is short term cash but really doesn't do much good for the long term.

We all get older in life. There is no way out of it. The amount of money you receive and have to spend when you get older and are no longer in the work force greatly depends on how much you save, and where and how you save or invest it while you are still working.

Before 1974 (the year IRAs were invented) people only had a certain amount of avenues to try and save for their retirements years. Traditional investments were limited to savings accounts, stocks and bonds, real estate and such.

A rather bleak picture for the working man and women. Traditionally, you worked your butt off for 40 to 60 years, tried to save a bit of money than hope that when you got too old to continue working that you could live off of social security the rest of your life.

Amazing how many people are swimming in that boat today. Most people before 1974 just didn't have the resources or knowledge to invest in stocks, bonds, and real estate and are financially struggling to this very day.

The world changes, money changes, taxes change and also the world of savings and investments change. The Employee Retirement Income Security Act Of 1974 introduced the IRA, making it possible for the common people to invest tax deductible money into an Individual Retirement Account (IRA) each year that would multiply with interest over time while you were still working.

Then when you reached retirement age you could simply set up a monthly withdrawal check to add to your monthly social security check to fund your life while not working anymore. Sounds rather simple but it does get quite a bit more complicated as time and tax laws continue to change. Although this was a good start, there were still flaws and bugs to be worked out before it would benefit all people. In the beginning the only people that could contribute to an IRA were people that did not have any type of pension or retirement plan through their employment or job.

Then in 1981 came along the Economic Recovery Tax Act, which allowed anyone under the age of 70 and ½ years to be able to contribute to an IRA. However with each of these Acts there were limits on how much each year one could contribute. In 1974 the limit was $1,500, 1981 increased the limit to $2,000 and you were able to deduct that amount from your taxable income.

In a nutshell this was the starting point of people having the power to try and do something more in their working lives to help them out financially as they reached their retirement years. As the years have gone by, the government has enacted many changes and tax laws so that they can try and maximize how much more money they can get out of us all.

People need to make and save money and the government still needs all that they can get --

However, at least it was a start!

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