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you don't need all your $ in a ROTH
Old 01-11-2010, 04:07 PM   #1
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you don't need all your $ in a ROTH

In my opinion,
due to standard deductions and or self dependant status (did I say that right?), the first bit of income is in essence tax free. I think for a single person that would be about 8k, married 16k. So pull that much from regular IRA, rest from ROTH. No need to pay taxes putting all your $ into ROTH.
just my tax free 2 cents
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Old 01-11-2010, 04:12 PM   #2
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This would be in keeping with the conventional wisdom here about the order of withdrawing for retirement income: Take it first from your IRAs and 401Ks as long as you remain in a low tax bracket, and then draw from Roths and taxable accounts when additional income would kick you into the next tax bracket.

I'm trying to build all three piles myself (conventional 401K/IRA, Roths and taxable brokerages), because I want the maximum flexibility in drawing income and because I'm hedging my bets on what tax policy will be in 15-20 years or more.
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Old 01-11-2010, 04:23 PM   #3
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If you go over to the Optimal retirement calculator and put in your details they will generate a tax-optimal withdrawal scheme for you.

here's a link: Optimal Retirement Calculator and Retirement Decision Support System
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Old 01-11-2010, 04:43 PM   #4
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Another thought for some folks is to do some coversion of monies from regular IRAs to Roth. YMMV, and you have to look at state and federal taxes that may come into play, but pretty much everyone thinks that taxes will be quite a bit higher in the future.
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Old 01-12-2010, 12:14 PM   #5
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I'll be doing something similar, filling a low tax bracket with 401k/IRA withdrawals and pulling the rest from a Roth. Also a bunch of Roth conversions before SS/pension income kicks in, again filling the tax bracket. Won't be tax free, but it will minimize taxes during retirement and looks like my optimum withdrawal strategy.
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Old 01-12-2010, 12:34 PM   #6
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Quote:
Originally Posted by MasterBlaster View Post
If you go over to the Optimal retirement calculator and put in your details they will generate a tax-optimal withdrawal scheme for you.

here's a link: Optimal Retirement Calculator and Retirement Decision Support System

The ORP calculator also shows you a tax-optimal amount of IRA to convert for your individual situation.
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Old 01-12-2010, 06:49 PM   #7
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So pull that much from regular IRA, rest from ROTH. No need to pay taxes putting all your $ into ROTH.
just my tax free 2 cents
That is a good point to keep in mind.
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