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Old 12-15-2014, 09:08 PM   #41
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One can receive payments from a 401k without the 10% penalty if you are over 55 and have had a separation of service.
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Old 12-15-2014, 09:15 PM   #42
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My company provides 100% matching, up to 9%, and allows after tax contributions up to the IRS annual limit ($53K for 2015).
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Old 12-15-2014, 10:14 PM   #43
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Originally Posted by Alan View Post
No restrictions at all as far as I am aware, on any of the types of IRA you mention. The more you convert in any given tax year the more tax you pay. It is the tax bands that cause folks to self limit what they convert.
I know you can convert money from tIRA to Roth IRA. Can you covert money from 401(k) directly to Roth IRA (without roll over to tIRA first)?
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Old 12-15-2014, 10:58 PM   #44
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I know you can convert money from tIRA to Roth IRA. Can you covert money from 401(k) directly to Roth IRA (without roll over to tIRA first)?
No, I pretty sure you can't.
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Old 12-15-2014, 10:59 PM   #45
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One can receive payments from a 401k without the 10% penalty if you are over 55 and have had a separation of service.
If your plan allows it. Many do, but some do not so be sure to check if you are relying on this strategy.
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Old 12-16-2014, 04:48 AM   #46
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When I originally read this a few days ago, I thought this question was a retirement time bomb question... the tax trap at RMD time. With the availability of provision 72T, there is a way to access the tax deferred funds somewhat early.

I see my investments as one entity... not divided by goal. I've believed that some diversification in tax treatment of assets. Presently I have 1%/44%/55% roth/ira-401k/after tax. ok, a bit light on the roth, but ER will give me the opportunity to roll some over at relatively low tax rates.

One has to remember when counting the pennies you've saved in IRA/401k... it is not all yours. The government still has a tax interest in it. So don't count your pennies before they're taxed. But with some planning you may have some control on how that happens.

ER provides more options than for those who choose... or have to work until RMD time.
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Old 12-16-2014, 05:16 AM   #47
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I know you can convert money from tIRA to Roth IRA. Can you covert money from 401(k) directly to Roth IRA (without roll over to tIRA first)?
Yes -- I have done it before.

In the past this was prohibited, but the Pension Protection Act of 2006 reformed this. Here is an article that discusses this.

-gauss
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Old 12-16-2014, 08:24 AM   #48
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Yes -- I have done it before.

In the past this was prohibited, but the Pension Protection Act of 2006 reformed this. Here is an article that discusses this.

-gauss
Interesting. Learn something new every day. I guess the real benefit is avoiding the pro-rata rule.
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Old 12-16-2014, 08:56 AM   #49
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So don't count your pennies before they're taxed.
Is this a new retirement planning aphorism. Love it.
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Old 12-16-2014, 09:19 AM   #50
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When I originally read this a few days ago, I thought this question was a retirement time bomb question... the tax trap at RMD time. With the availability of provision 72T, there is a way to access the tax deferred funds somewhat early.
As an early retiree, I consider the 72T withdrawal process as a very last resort due to it's requirement to continue until 59 (~20 years for me). I suppose as I get closer to this age I will have less reservations about being locked in.

However another drawback of 72t is that you can't easily vary the withdrawal size on a yearly basis (set according to life expectancy). This may be an issue if you are managing income for various ACA subsidy thresholds.

This overall lack of flexibility is scary to me. Therefore I prefer to spend down taxable or use withdrawals of Roth contributions.

Quote:
I see my investments as one entity... not divided by goal. I've believed that some diversification in tax treatment of assets. Presently I have 1%/44%/55% roth/ira-401k/after tax. ok, a bit light on the roth, but ER will give me the opportunity to roll some over at relatively low tax rates.
I have a similar distribution with very low percentage in roth (never met income limits while working and didn't want to use conversions). However now that i'm fired, will definitely convert more IRA assets to roth.
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