Ravensthorpe
Confused about dryer sheets
- Joined
- Mar 11, 2007
- Messages
- 1
Some people are weighing the pros and cons of a Roth versus a regular IRA, and believing that they will be in a lower tax bracket after they retire, they might avoid investing in a Roth IRA.
However, consider this: even people on a modest income during retirement will have to pay taxes on an increasingly larger portion of their social security benefit for every dollar withrawn from taxable accounts (up to 85% of the SS benefit).
This may result in their "effective" federal income rate being 85% higher than what they might expect. In other words, that 15% rate might effectively be more like 27.75%!!!
However, consider this: even people on a modest income during retirement will have to pay taxes on an increasingly larger portion of their social security benefit for every dollar withrawn from taxable accounts (up to 85% of the SS benefit).
This may result in their "effective" federal income rate being 85% higher than what they might expect. In other words, that 15% rate might effectively be more like 27.75%!!!