The Year of the Roth

As most of you know, 2010 is a special year for taxes. It is the last year covered by the Bush tax cuts which, as you may remember, were engineered as a package of temporary adjustments and deals rather than permanent 1040 changes. Most of it goes poof on December 31st of this year.

In the meantime, 2010 is a special year for converting traditional IRAs into Roths. When the Bush cuts were being constructed there was a need to find more government revenue, particularly at the end of the period covered by the law, i.e. 2010. IRA conversions fit the bill because, in the short run, they generate additional income tax revenue. (In the long run they do not, since conversions reduce income taxes paid in the future.)

So as of a few days ago, the income limitation on conversion to a Roth is gone. And just to get things started with a bang, for 2010 only, you have the option to defer the income tax bill on the conversion to 2011 and 2012. (That is, it is split between those two tax years.)

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Dangerous Books Recalled

Back on the web now. My apologies to everybody who missed me. Living  without broadband for two days was quite an experience. It would make a good reality show, maybe for PBS: 1980s House.

Speaking of being wired up and of decades past, when I sat down to catch Bad Wiring Bookup on what I had missed I came across a wonderful item. The U.S. Consumer Product Safety Commission announced the voluntary recall of nine books on home improvement. Printed in China with lead-based ink? Not exactly.

The books contain errors in the technical diagrams and wiring instructions that could lead consumers to incorrectly install or repair electrical wiring, posing an electrical shock or fire hazard to consumers.

Several aspects of this story amuse and/or fascinate me. And there are implications for that other great and dangerous DIY area, personal finance.

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We Are Experiencing Technical Difficulties

The Internet connection at the Curmudgeon household is down, and I am way too old to blog from Starbucks. Please stay tuned.

Watching Less TV Will Not Make You Rich

I like television. I don’t love it. Outside of baseball season I’m not a daily watcher. But it’s a nice thing to have in the house. I even think of it as a relatively cheap form of entertainment.Televison Takkk Much cheaper, for example, than its  closest analogue, going to the movies.

Apparently, I was wrong. Turns out, each hour of TV watched costs me $4 in increased spending. This from Juliet Schor, currently a Boston College sociologist:

"Television viewing results in an upscaling of desire. And that in turn leads people to buy." Her study found that every additional hour of TV viewing per week boosts spending by roughly $200 a year.

(This from Money Magazine at via Consciously Frugal via Fiscal Fizzle via ABDPBT. The opportunity to run a fourth generation link was  not the only reason I picked this topic, BTW.)

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Long Run House Prices Revisited

The start of a new year is a great time to pause, consider the big picture, and predict the future. So it’s time for me to update a chart I first ran a while back on house prices.




This is adopted from Robert Shiller’s work. He chained together a collection of house price indexes covering different periods, ending with the Case-Shiller Index Composite from 1987 onwards, and then adjusted for inflation.

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