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One Last IRA before FIRE?
Old 06-09-2007, 09:33 AM   #1
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One Last IRA before FIRE?

I retired in March, so I had two months of earned income for 2007, about $30K including vacation time paid. I was not able to max out my 401(k) due to monthly limits on contributions by my employer.

Since my income is lower this year, I can contribute to a Roth IRA ILO a regular nondeductible IRA. I feel a little silly still saving as I'm retired, but it seems like a last opportunity to shield some earnings from taxes.

Is there any reason not to go for one last IRA and if so, a Roth?

Thanks in advance for your advice and my apologies if this was recently covered elsewhere.
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Old 06-09-2007, 09:55 AM   #2
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Is there any reason not to go for one last IRA and if so, a Roth?

Absolutely NONE!...unless you're one of the few who really think that Uncle Sam really does know how to handle your $$$ better than you do
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Old 06-09-2007, 11:42 AM   #3
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Yes, do the Roth. Can't lose on that one.It grows tax free and you can take it out whenever you want.
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Old 06-09-2007, 08:47 PM   #4
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Even before I saw your post I had already thought about this as I plan to retire 2 months into a year and I will max as much as I can into 401(k) and IRA, and it will be the first year ever that I can put into a Roth so I'm looking forward to doing it. I can see no downsides at all
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Old 06-09-2007, 09:49 PM   #5
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I FIRE'd in early April, and am making the max contribution to my Roth IRA before the end of this tax year. I figure I might as well let it grow tax free! No good reason not to. IMHO
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Old 06-10-2007, 09:08 AM   #6
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Quote:
Originally Posted by Alan View Post
Even before I saw your post I had already thought about this as I plan to retire 2 months into a year and I will max as much as I can into 401(k) and IRA, and it will be the first year ever that I can put into a Roth so I'm looking forward to doing it. I can see no downsides at all
Will you be rolling over any IRA money into a Roth while your tax bracket is low ?
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Old 06-10-2007, 09:57 AM   #7
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Will you be rolling over any IRA money into a Roth while your tax bracket is low ?
Absolutely, both DW and I have regular IRA's which we plan on converting to Roth's while we are in a lower bracket.
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Old 06-10-2007, 10:09 AM   #8
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Will you be rolling over any IRA money into a Roth while your tax bracket is low ?
Just noticed this bit of advice on VG website, confirmong the advice to convert to Roth, and also pointing out that you need to do so before age 70 to avoid early withdrawals.

Q: I am already retired but not yet drawing on my IRA. I have three years before reaching age 70 and have pensions that fulfill my and my wife's needs. When I do start drawing on the IRA, can I roll the distributions into a Roth?
John Ameriks: If you don't need the assets from the IRA, you might consider converting them to a Roth as soon as possible in order to avoid required minimum distributions, which must start by April of the year after the year you turn age 70.
You can't really roll IRA distributions into a Roth once the minimum distributions start, though you can still convert a traditional IRA to a Roth.
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Old 06-10-2007, 08:51 PM   #9
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OK, thanks to all that responded,I'm gonna do a Roth. Now to go to the stock picking forum to find a hot stock....just kidding.
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Old 06-11-2007, 07:32 AM   #10
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If you put money in a Roth, it will need to be there 5 years before you take it out... I think. The contributions can be taken out anytime, but I think there is a 5 year rule on earnings.
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