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Retire March 2020
Old 10-30-2013, 08:23 AM   #1
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Retire March 2020

This is a site I've great admiration for, having visited this often over the past couple of years as I was contemplating early retirement myself. Thanks to all those who contribute here!

Bit about myself: 54 years old, wife, 2 kids, one enters college in 2014, other in 2016; Have saved a lot for retirement consistently, followed value investing methods; Have over a million in retirement and growing. Do not have too much outside of retirement, for ex, have not saved enough for putting kids thru college, maybe 1 year of college each.

I have a couple of questions:
1) Having large retirement distributions coming, should I borrow most of the college bill for the kids, knowing that I can pay it off later? Thinking of keeping the non-retirement cushion. Is this a good approach?
2) I'm a little concerned about my tax rate actually being higher in retirement, because of things like minimum required distributions from a sizeable IRA acct when I turn 70. Is there anyone who has/had to deal with a similar situation? Any suggestions.

Thanks for any thoughts around this. This is a great forum and I'd like to learn from others.
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Old 10-30-2013, 10:32 AM   #2
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Welcome to the forum! You sound like you are in great shape to retire on schedule, so congratulations for that!

I suspect others will have more to contribute relative to your two questions, but for question #2, I know a lot of people are converting to Roth IRAs because of a concern that taxes will be higher down the road than at present. For me, most of my savings are after tax, so I believe I will be in a lower tax bracket once I stop generating earned income, so I don't think it's a good strategy for me.

However, if most of your income is likely to be from RMD in retirement funds, you may want to convert part of your holdings to a Roth and pay the taxes now, and then let them grow tax deferred moving forward.

I'll let others with more experience go from here.
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college bills, large ira, mrd

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