What the experts say

The back door to a Roth IRA; Divorce without lawyers; A lovable loser?

The back door to a Roth IRA

An apparent oversight by Congress has given the well-off an opportunity for tax-free savings, said Janice Revell in Fortune. Big earners have always been barred from opening Roth IRAs, which are funded by after-tax dollars but allow untaxed post-retirement withdrawals. Those with taxable income greater than $122,000 (or $169,000 for married couples filing jointly) have had to make do with conventional IRAs, where savings are deposited tax-free but taxed when they’re taken out. Last year, though, Congress changed the law to allow anyone, regardless of income, to convert conventional IRAs to Roth IRAs, as long as taxes are paid on tax-deferred savings. But “inexplicably,” the legislators also allowed all taxpayers to open new conventional IRAs and convert them immediately to Roths. If you’re looking to save through an account “that’s tax-free for life,” act before Congress closes that loophole.

Divorce without lawyers

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Even amicable divorces are painful, said Elizabeth Alterman in CNBC.com. But what many divorcing couples don’t realize until too late is that divorce “could wind up costing a lot more than just heartbreak.” Couples who hire lawyers to negotiate (and possibly litigate) the split can easily burn through $50,000. Hiring a mediator can shave that tab to around $7,000. Spouses who work out as many financial and practical details as possible between themselves can save even more, says Victoria Di Santo of Berkeley Heights, N.J., who used a mediator to handle her divorce. “Try to think of it as a business transaction,” she advises. “You’ll save a lot of time, energy, and money.”

A lovable loser?

By most measures, Dean Foods is an underperformer in a low-profit industry, said Jack Hough in SmartMoney. But some analysts see “promising signs” of better days ahead for America’s largest milk producer, with $12 billion in annual sales. The stock market values Dean at only $2 billion, largely because profit margins on milk are so small—a mere 4 percent. But margins are likely to widen in the coming months, because “grocers are becoming less willing to discount it to customers,” while dairy farmers are becoming “more willing to sacrifice volumes to preserve profits.”

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