 |
Should I move 7K to Roth IRA (last year to do so)
09-17-2023, 02:49 PM
|
#1
|
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Posts: 1,665
|
Should I move 7K to Roth IRA (last year to do so)
Retired 4/1/23 so 2023 last year I can contribute to a ROTH IRA. 22% bracket this year.
I would estimate my future bracket to be 12-22% so kind of no point except maybe slight growth in the fund over leaving it sit in savings and in reality probably I will spend it to live.
2024 income is going to be so low that I will not even need to file taxes - so that is a separate issue that just occurred to me today. But perhaps another vote in favor of not transferring the money.
|
|
|
 |
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
|
09-17-2023, 02:57 PM
|
#2
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 34,732
|
I think I would do it... it can be withdrawn at any time and will grow tax-free. For spouse as well if you are married.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
|
|
09-17-2023, 02:59 PM
|
#3
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 34,732
|
Last year that he has earned income needed to make contributions.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
|
|
09-17-2023, 03:01 PM
|
#4
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 20,279
|
 Quote:
Originally Posted by pb4uski
Last year that he has earned income needed to make contributions.
|
I misread contributions as conversions, my bad. Thanks.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 40% bonds / 10% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
|
|
|
|
09-17-2023, 03:23 PM
|
#5
|
|
Full time employment: Posting here.
Join Date: Jul 2014
Posts: 772
|
Quote:
Originally Posted by badatmath
Retired 4/1/23 so 2023 last year I can contribute to a ROTH IRA. 22% bracket this year.
...
2024 income is going to be so low that I will not even need to file taxes....
|
If you are in the part of the 22% bracket that allows deduction of traditional IRA contributions (or aren't covered by an employer's retirement plan in 2023 so there is no upper income test for deduction), then the situation described in the quote suggests a traditional IRA for 2023 would be best.
|
|
|
|
|
09-17-2023, 03:37 PM
|
#6
|
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Posts: 1,665
|
Quote:
Originally Posted by SevenUp
If you are in the part of the 22% bracket that allows deduction of traditional IRA contributions (or aren't covered by an employer's retirement plan in 2023 so there is no upper income test for deduction), then the situation described in the quote suggests a traditional IRA for 2023 would be best.
|
Can't do Traditional by reasons of income/covered by employer plan (pension and 401k). So either move it to Roth or just spend it foolishly to live.
|
|
|
|
|
09-17-2023, 10:36 PM
|
#7
|
|
Recycles dryer sheets
Join Date: Dec 2020
Posts: 178
|
Quote:
Originally Posted by badatmath
Can't do Traditional by reasons of income/covered by employer plan (pension and 401k). So either move it to Roth or just spend it foolishly to live.
|
Don't waste the tax-free space - contribute to your Roth. You are already paying taxes on that amount for this year whether you put in Roth or taxable account or even if you spend it.Of course if you need the money for expenses then leave it in your taxable account.
|
|
|
|
|
09-17-2023, 11:31 PM
|
#8
|
|
Full time employment: Posting here.
Join Date: Aug 2008
Location: The 850
Posts: 903
|
Make the contribution.
If I understood correctly, you’ll not pay any taxes this year as-is. Even if you take the same amount out in a year, the earning will be tax free. Probably not much, but still tax free.
__________________
Stay at home slacker dad since 2015
|
|
|
|
|
09-18-2023, 01:15 AM
|
#9
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 16,044
|
Who was it who said "Just do it!"?
Good advice IMHO but always remember and never forget YMMV. 
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
|
|
|
|
|
09-18-2023, 02:15 AM
|
#10
|
|
Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,394
|
It almost always makes sense to contribute the maximum to your Roth IRA each year, assuming you are also contributing a hefty amount to your employer's tax-deferred plan.
And the max Roth IRA contribution for older folks this year is $7500, not $7000. So do that if possible.
The more complicated question is what to do about Roth CONVERSIONS once you are retired and no longer have Earned Income...
|
|
|
|
|
09-18-2023, 08:42 AM
|
#11
|
|
Thinks s/he gets paid by the post
Join Date: Aug 2017
Posts: 1,665
|
Quote:
Originally Posted by TheWizard
It almost always makes sense to contribute the maximum to your Roth IRA each year, assuming you are also contributing a hefty amount to your employer's tax-deferred plan.
And the max Roth IRA contribution for older folks this year is $7500, not $7000. So do that if possible.
The more complicated question is what to do about Roth CONVERSIONS once you are retired and no longer have Earned Income...
|
I got as much shoveled into the 401k as I could manage between when I found I was getting laid off and the end date so nothing more can be done with that.
I will never know about conversions as I can't even manage my measly little finances now. . .
But I will keep trying. Thanks all.
|
|
|
|
|
09-18-2023, 08:52 AM
|
#12
|
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2004
Location: Laurel, MD
Posts: 7,889
|
I am making Roth contributions baded on DW’s income. I do it to diversify taxwise. A modest Roth account gives me more flexibility to smooth income, pay major expenses, etc. You can withdraw proncipal at any time. I say do it.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
|
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
|
| Thread Tools |
Search this Thread |
|
|
|
| Display Modes |
 Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|
