save for retirement by allowing them to regularly contribute amounts from their own pay checks to an i.r.a. the plan is simple for both employers and employees. employees would be automatically enrolled into their employers' automatic i.r.a. automatic enrollment is a process that is proven to build participation which employees like and under which employees have complete control ultimately of their own retirement savings decisions. to avoid confusion, and to keep costs low, all automatic i.r.a.s would offer three and only three investment choices. for employers the plan is also very simple. they would be asked to do the same thing they now do to withhold income and other taxes from an employee's paycheck except that the money would go into an i.r.a. instead of to the treasury. employer contributions would neither be required nor permitted. employers would not be required to comply with arisa rules or other types of regulations that apply to 401(k)s or a variety of other things. the simplifications eliminate almost all the costs associated with an automatic i.r.a. the plan also includes a

i have actually an i.r.a. that was rolled over from tsp 20-plus years ago. and i keep meaning to roll it into heritage's plan but i have yet to do that. what we see is a significant number of people who lose their accounts, especially over the years, whether employers go out of business, the providers change and the like. and there is a suggestion in my written testimony about a way to use tax information to enable people to find their lost accounts and to encourage them to combine them. >> thank you. one last question. are there incremental steps that would make it easier for employers to offer annuity options as part of a defined contribution plan? >> well, i think this is something that the -- that the irs and the treasury department are currently looking at. and i think that it's -- it has been something that policymakers are really looking to give people that ability, to address -- to use an annuity. now, i'm not speaking for the current treasury department or the irs. but i think what they've been trying to do is to -- to eliminate some of the -- some

i am 60 years old, and i thought if you cash an i.r.a.n at 59 1/2 you don't have to pay taxes on it. was my taxes done correctly since i inherited this when i was 60 years old? >> so you're a little bit confused. if you're above age 59 1/2 you don't have to pay penalties. but you're still taxed on the money that you pull out. and because you already pulled the money out, you do have to pay the taxes. for everybody else, who is inheriting an i.r.a., and this happens a lot, you can stretch the withdrawals over your life span. so that's a better way to not get hit with the taxes all at once. >> not just a little bit confused, totally confused. >> that's okay, alicia. jean skat ki, david bach and farnoosh torabi. thank you very much. still ahead from morning breath to unpleasant smelling feet we're answering some of your most embarrassing health questions. then later, no more boring days. going green gets a makeover with color house wares. man, i'm glad aflac pays cash. aflac! ha! isn't major medical enough? huh! no! who's gonna help cover th

i'd move the money from the 401(k) plan to an i.r.a. account. at way it stays tax deferred and take that money out over time. that way that money will continue to grow while you're in retirement. >> pat, hope that helps you. we have an e-mail question next. amber writes my husband and i would like to buy a house in the next two years. our credit scores are not quite 600. the debt we have is from unpaid bills that have gone to creditors. can we pay them off and have a better score? also would we get a better score if we open a line of credit? if so, what would be a better to open a credit card or a line of credit loan? >> a lot of stuff in there. first of all, amber, i would say that what you need to get the best mortgage is at least a 760 credit score. you have a long way to go. but you know that already. paying off the debt that's in collections, definitely that's the first place to start. but remember, that's still going to be a negative -- that's going to be a blemish on your credit report for some time but it's going to be less important over

direct deposit to an i.r.a. so once you open that i.r.a. next year to get a refund put that money straight into that retirement savings account. >> this way no relatives get burned. let's go to skype. what's your question? >> when my husband and i moved we were able to buy a foreclosed home we're fixing up. now that he is close to graduating we're selling the house and expect to come out with a $50,000 gain. we would like to know the widest thing to do with that money? should we use it to help pay down student loans? use it for a down payment on a future home or use it to start -- help start up a practice? >> good for them. >> it's fantastic. nearly you have a rack for real estate. you may want to continue down that vein. right now i like option number three. i think you should work on building your income. and the way that you're going to build your income which could buy you a home in the future and pay down those student loans in greater regard in the future is to get into that optometry practice and really gear up and start earning some

them to save for retirement by allowing them to regularly contribute amongst their own paychecks to an i.r.a.. the plan is simple for both employers and employees. employees would be automatically enrolled into their employers automatic i.r.a.. automatic enrollment is a process that has proven to build participation which employees like and under which employees have complete control of smedley affair own retirement savings decisions. to avoid confusion and to keep costs low, all automatic i.r.a.'s would offer three and only three investment choices. for employers the plan is also very simple. they would be asked to do the same thing they now do to withhold income and other taxes from an employee's paycheck except the money would go into an i.r.a. instead of to the treasury. employer contributions would neither be required nor permitted. employers would not be required to comply with the risser rules or other types of regulations that apply to 401(k)'s or a variety of other things. the simplifications eliminate almost all the costs associated with an automatic i.r.a.. but the plan also inclu

70% of workers earning 30,000 to 50,000 participate in a plan at work but less than 5% go save on an i.r.a. on their own. bureau of labor statistics data shows 78% of workers have access to workplace retirement plan with 84% participating. almost 80% coverage is a success story. more needs to be done but the committee should build on the success of the system. we support the auto ira proposal. mr. neillsville for example is a way to expand work place savings by building on the current structure. recent tax reform proposals include dramatic cuts in maximum contribution limits, cap on the value of the current year's exclusion for households making over a certain dollar amount, or conversion of the current year's income exclusion to a credit. all of these proposals would reduce the incentive for small business owners to

have to pay for that anyway. >> you mess with the tax break that i and you get when we put into an i.r.aess around with that and you'll have far less money going into the i.r.a.'s and 401k's. >> i feel like you were yelling at us. >> listen -- >> who's they? who wants it? >> the government. that would be the obama administration. which desperately needs revenue and they really want income redistribution. 1/2 that pays tax would pay more tax to the half that doesn't. >> unfortunately, you'd be paying the tax when you're at the zenith of making money as opposed to when you retired, drawing it out and getting a lower rate to get it coming and going. >> my golden years. >> zenith doesn't even make televisions anymore. >> they don't? >> they don't, sorry. >> luckily your magnavox. >> we'll watch you at 9:20 on the fox business network. have a great week. caught on camera, dramatic moments when a driver loses control of her drag racer. goes flying! whoa, right towards fans. wait until you see how it does. >> and between the g.s.a. and the secret service scandal, does the white house have a ser

contribute to an i.r.a. it count toward your 2011 taxes. if you're under 50 years old you can contribute up to $5,000 to an i.r.a. $6,000 if you're 50 or older. here's an example for you. line if you're rushing to do your taxes, cox says try not to take the standard deduction. if you have the time, itemize your deductions. it can save you hundreds or thousands on your tax bill. kyra? >> what if you still can't pay the full amount that you owe? >> okay. if you can't pay the full amount, the i.r.a. says still file your return by april 17th. pay as much as you can to avoid any penalties and interest. if you've been unemployed for any 30-day period or more beginning on january 1st, 2011 or if you're self-employed and your income dropped 25% or more in 2011 because of the economy, the irs has their fresh start initiative relief program. that's what it's called. that's where you can sign up for an installment payment plan with the irs and avoid penalties. there are income limits to this program. so go to irs.gov t

they think an i.r.a. left it there. >>> and escaping house arrest under american friction today. he was convicted several years ago of leading protests again the chinese government. he went missing last weekend. a fellow activist says chen is now safe at u.s. embassy in beijing. no comment from american diplomats or chinese officials. >>> the u.s. marine presence in -- on okinawa is about to be cut in half. the 9,000 marines and familied therefore off the japanese island. most of them to guam or hawaii. a drawdown plan agreed on by both the u.s. and japanese militaries. >>> an enormous volcano not far from mexico city is awake, smoke, ash and rocks began flying out of the mountain this month right in the middle of where 25 million people live. the volcano erupts a little every few years and is usually minor. people can't help but wonder if this could be the big one. cnn reports. >> reporter: in the fertile highlands of central mexico a menacing giant has awakened. the volcano has been spewing ash and smok

john, you talked about simplifying things, but also having an automatic i.r.a. so kind of my question to you, does the simplification come first, or do you do the automatic i.r.a.s and then simplification after that? >> i anticipate that given the direction of things, that the auto i.r.a. comes first. the auto i.r.a. is crucial, because if people don't save, if they don't get started early on, it doesn't matter if you simplify or not. >> okay. thank you. i just had one kind of out of the box question. and it seems like, you know, so many people are going through a lot of different jobs today. and so kind of the new normal is several different careers, several different jobs. and a lot of younger people that i know have been to two or three different employers in a very short period of time. and so each time you're trying to analyze what's the best retirement program, here's what the employer is offering, has there been anything done kind of out of the box and kind of looking at a plan that would just be a individual's plan, and this plan would follow the individ

can we put money into an i.r.a. today to avert any taxes we have to pay? our tax bill is $3,000.tax bill is not too much. the maximum contribution limits for tax season 2011 are $5,000 in their case because they're 50 and older, they can do $6,000 into an i.r.a. today is the deadline for that and today is the deadline to take money out of the retirement accounts if you overfunded them. my accountant said i have to take money out of my s.e.p. because i had put too much money in there. >> too much money in retirement? >> i hadn't heard of that. he said i need to spend more. >> he's frugal. >> that's on page like 3,423 of the tax code. >> yeah, of the tax code which is, what, 70,000 pages plus? >> it's ridiculous. here's an e-mail from deborah in albuquerque, new mexico. i refinanced my home. what part of the closing costs that i paid can i deduct this year? >> well, as you very well know, there's a laundry lists of costs that go into the closing. appraisal fees, and title fees, and closing costs have been on the rise because of the regulation, up 9% this year than last year. they'r

but i would take that 40 1 k money and do an i.r.a. rollover. 401 kf 0 01(k) plan t i.r.a. and take that money overtime. that honey will continue to grow while you're retirement. >> and an e-mail question next. amber writes, my husband and i would like to buy a house in the next fwoo two years, our credit scores are not quite 600678 the debt we have is from unpaid bills that we have from creditors. if we pay them off, would be get a better score? also, would we get a better score if we own open a line of credit? >> first of all what you need to get the best mortgage is at least a 760 credit score. a long way to if you know that already and you will plan for that. paying off the debt in collections definitely, that's the first place to start. but, remember, that still will be a negative -- a blemish on your credit report for some time, but less important over time. the key things to do when are you trying to raise your credit score, we always talk about it. pay your bills on time and use less than 10% of all of our available credit. they want to s

i have an i.r.a. with a value of $230,000. withdrawal will be so i can m3 e n- esparati adjusts iith taxes. i have an annuity in addition to sct sprc13 e. i rilou id ominst >> w annl, the rule is, you hav to start taking these minemb13 re peee, be ens so since this person already retired, she has to soffip u t3 ing her minemb13 concomeibutions by 2014. base on lg she could go to her c.p.a. and they could tell her how to tmpust hly csmngs or h that e taken out ahead of time. the value will not be detery fod before d- be ber banswors it out. you can't know that now. i cane. going to be. she has until 2014 to take oof that monlti. >> this could be complicated. my two sons whether adopted 7 o+ t 8 years ago. they came back to live with me, their biological mom and fathetr they sjus they have the rig thi to claim them as dependents. who has that rig thi? >> the rputas pary to claemb a person as a dependent there are five tess one of which is a support. have you to provide more than 50% of the persoighs s by pop u. the adoptive -- t

i.r.a. will not offset your income. it's not tax deductible this year. it's an after tax investment. his year is the traditional i.r.a. and in spite of that, i'm going to say hey, pay a little more in taxes now and do the roth i.r.a. for most everyone. unless you're a little bit older in your 60's or something, the map on the roth works out beautifully because most of what is in your account at retirement is growth and with the roth, the growth is all tax free so i would give up the tax break this year. >> can anyone get a roth? i thought if you made a certain amount of money, you're not eligible for a roth. >> you're right, if you make over $154,000 married filing jointly you can't do a roth or $95,000 as a single, can't do roth. those of us who make more than that we're evil and must be punished because of buffet's secretary. >> dave, we're trying to pay down our debts but we have little in savings. my wife wants to put all our tax return money in savings about $8,000. i would like to pay off a couple of credit cards. how should we use this refund? i know what's coming. go ahead. >>

if you are not already maxed out make an additional contribution to your rare -- i.r.a.eadline and it can be counted as a deduction by last year's taxes. you save mitt romney toward retirement but it can save money on your tax bill, as well. and speaking of savings if you get a tax refund do not let that distract you from your financial goals if the money is meant for savings make sure that is where it goes. the i.r.s. giving you a refund is not them giving you your money it is you giving you your money, back, like you would never blow a whole paycheck don't employee this payday, either, if your filing dead lone -- deadline is april 17. >> the time is now 26 minutes after the hour and we will cover the breaking news in texas with tornadoes tearing homing down, and travel nightmare in store later today and we have a live report after the break. >> remember the mcdonald's employee would claimed to win the mega millions jackpot but could not show anyone the ticket? she is about to reveal her secret. >> announcer: meet mary. she loves to shop online with her debit card, and

i.r.a. savings into an annuity. and it would relax current rules to allow the creation of a longevity annuity within the 401(k) or i.r.a. so how does it work? when you reach 65, you take 15% to 20% of and use to buy an annuity that defers benefits. it doesn't begin to pay out for 20 years. it then tens paying you benefits for the rest of your life. the white house council for economic advisers reports treasury data shows that a $20,000 annuity would cost a 65-year-old more than $277,000 about it pays out immediately. if the payouts are delayed until age 85, that 65-year-old would pay a little over $35,000 for the annuity. so a huge savings. a conversion like this could prevent many retirees from outliving their retirement. we'll have a lot more about the return on your rear irementirem in "power lunch." and there's much more on cnbc.com in terms of retirement. we have return on your retirement stories there. they'll be up all day. >> we were just talking about with a would happen if the tax benefits from 401(k)s and

back as a refund, you're more likely to make an intelligence decision on what to do with it such as making extra payments on your student loan or start a roth i.r.art and parcel to that, you say pay attention to what you call your reference group. now, what is that? >> there's this real interesting study out of boston university that found that we're social creatures, right? the financial lives of the people around us influence the way that we behave. so if your reference group, that is the people whose financial lives you compare yours to, if those are people who are higher on the socioeconomic scale than you, you're more likely to have more debt and more likely to have less in savings. a lot of time especially now young people, unfortunately, the reference can be reality tv stars. and if your social reference group is those people, you're going to have a lot of trouble making intelligent decisions about money. >> or to overbuy. >> exactly. so the key is to hajj out with people who have maybe less money. or if you're going to watch tv, at least watch it consciously. >> let's get a question directly from a young person who is worried about money.

i.r.a. and tax-advantaged accounts. if you have an early withdrawal from your retirement plan, you have had a 10% plan. well, that's been doubled. so obamacare has limited the use of health savings accounts, but at the same time, made the penalties even steeper for using it. and i can tell you in my own case, apart from my own medical practice, we have used them to tremendous benefit to employees because it has lowered their costs and taken a lot of anxiety in being caught of some sort of illness. excise tax on charitable hospitals, $50,000 to hospitals if they fail to meet community assessment needs. so this provision will increase the employee's portion from $1.45% to 2.35% to families making more than $250,000 a year. the rate will increase by $3.% on income over $ 50,000. i realize i don't make $250,000. but because of inflation and trust me, with the monetary easing in the monetary policies that are coming out of this administration, inflation gets going again, which it will quite soon, you will be driven up, but the buying pour

an accident, right next to another document talking about how she's having marital problems. it's stunning to me. put it together with the blood evidence and the fact that he drained their i.r.an't he drive 800 miles and nobody noknows where he went? >> that's right. when you put it together, i can't explai authorities didn't arrest him. >> nancy, what do you think is the most damning piece of evidence? how surprised are you that there was not an arrest in the case? >> i've been surprised for a long time. i spoke in depth with susan's parents and her sister. they told me they begged the judge not to give visitation to josh powell. and that's really what this is all about. it's not just the murder of susan. she's dead. she was murdered. and the fact that the west valley police say they don't want to disturb the integrity of the investigation, what integrity, they're calling it a missing person. hey, she's dead. she was murdered. it's not a missing person. to hear dan say he didn't want to attack the police, i never heard that before. >> oh, here we go. >> that aside. that aside, i think the strongest piece of evidence, twofold. number one, the children, we haven't talked about

an intelligent show. i watch it every day. gentlemen, i go to the bank, i take out the minimum amount. the bank charges me $40 to take out the minimal amount from i.r.a. is that legal for a bank to do that? >> gee, a bank does something people don't like? >> arlene, are you still with me? >> i'm with you. >> when you say you take out the minimum amount, what's the minimum? >> this time i took out, i think, it was $1,300, something like that. they are holding my money. >> and every time you take the money out, they charge you $40. >> and this is before you get hit with the tax bill. >> that's correct. >> what is your situation? >> i would switch banks right now. that's crazy. >> it is not illegal. this is american free enterprise. they can charge you anything they want just by doing this. i am stunned, but no it is not illegal. i would switch to another bank, a credit union. i have never heard of anybody charging to do the required minimum distribution. that's what she's talking about, the amount she has to take out because she's over 7.5. most firms are happy to figure out how much they have to incur, or send you a check or move it to a taxable accou