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5 Reasons to Open a ROTH IRA

The news continues to be dominated by Greece’s possible bankruptcy and the question of whether it will stay in the European Union. In the midst of their struggle we’ve learned, once again, that when a country is fighting for financial survival, taxes go up, and the ability of those in retirement to make ends meet can be compromised. The Bible encourages us to save. Proverbs 21:20 says, “The wise man [and woman] saves for the future, the foolish one spends whatever he gets” (TLB).

Our country’s most popular retirement options are the 401(k), traditional IRA and Roth IRA. I recommend contributing to a 401(k) up to the amount of your employer’s match because it is free money, but not one penny more because of the five advantages of the Roth IRA.

  1. Although contributions to a Roth are not tax deductible, it grows tax free and after age 59½, anything you take out of it is tax free. This is a huge benefit when you are in retirement!
  2. If you are married, each year you and your spouse can both contribute $5,500 of earned income to your individual Roth’s regardless of who earned the money. The amount you can contribute annually is increased to $6,500 once you reach age 50.
  3. If you are experiencing a financial emergency, you can take out what you’ve contributed to a Roth penalty free and income tax free.
  4. Unlike a 401(k) or traditional IRA, when you reach age 70½ you are not subject to the taxable Required Minimum Distribution (RMD). In other words, you can choose to leave the assets in your Roth where they grow tax free.
  5. A Roth generally has the most favorable tax treatment when you pass your estate to your heirs.

The good news is that it is easy to open a Roth IRA. Most banks and online brokers can help you.


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A Day in The Life

Dear Friends,

We’re new to our neighborhood and soon after moving I met our next door neighbor. As we were getting to know each other, he said something that caught me off guard: “When I saw you playing with your granddaughter one morning, I just assumed that you were retired.” Retired? I have the amazing privilege of serving Christ by working 50-hour weeks as a volunteer for Compass. . . and love it!

Think About it.

Just what does the Bible say about retirement and ceasing all labor to pursue a life filled with leisure? Not much and nothing good! Numbers 8:24-26 contains the only reference to retirement in the Bible and applied specifically to the Levites working in the tabernacle. So, if you’re a Levite working on the tabernacle the rest of this section doesn’t apply to you. But if you’re not, read on…lol.

While people are physically and mentally capable, there is no scriptural basis for retiring and becoming unproductive. Don’t let age stop you from finishing the work God has called
you to accomplish. He’ll provide you with the necessary strength and mental clarity. Remember Moses. He was 80 years old when he began his 40-year adventure of leading the children of Israel.

The Bible does imply, however, that the type or intensity of work may change as we grow older—shifting gears to a less demanding pace to become more of an “elder seated at the gate.” During this season of life we can use the experience and wisdom gained over a lifetime.

When I counsel young adults, I routinely encourage them to begin praying for the Lord to place on their hearts the work that He has for them after finishing their careers. And I want to encourage you to do the same.

Typical week.

So, what’s a typical week look like for me? Let me break it down into time with Lord, time with family, time with friends, time staying in shape, and time working on Compass.

Time with Lord: I’m an early to bed and early to rise guy (unlike my bride of 40 years). To bed by 9-10 and up by 4-5. The first part of the day is spent in God’s word and praying. I try to walk an hour 6 days a week and also use that as a time of prayer.

Time with Bev and family: I love hanging out with Bev and our family. Our son Matt, his wife Michelle and grand baby Taliyah live about 5 minutes from us so we often spend time with them. Daughter Danielle and her husband Kyle live 90 minutes away and we treasure our times with them.

Time with friends: On average, I’ll have a couple of meals a week with friends getting caught up and connecting with others by phone.

Time getting in shape: In addition to walking, I work out a gym three times a week. It’s one of those places used by serious weight lifters . . . . and then there’s me. Their arms are bigger than my chest!

Time with Compass: My week is filled with calls with the Compass team Monday mornings, radio recording Tuesdays, writing, interfacing with our team, and traveling for Compass. I wake up every day with more to do than I can do. It can only get done well if Jesus Christ shows up and does it. Isn’t that what life is all about? Walking with Jesus, enjoying His presence and completing the work He’s called us to do. Jesus Himself said, “I glorified you [God the Father] on the earth, having accomplished the work which you gave me to do” (John 17:4).

Warmly in Christ,


Howard Dayton is the Founder and CEO, Compass – finances God’s way. For more information about Howard, please click HERE.