jIMOh
Thinks s/he gets paid by the post
Some questions about 72t when you have 4 different pools of tax deferred monies, plus 2 more Roth IRAs.
This is a 15 year plan (meaning the information collected now will be used for a possible FIRE date in 15-18 years). I have time to correct imbalances-maybe or take other actions which could make decision better if there is a problem brewing.
I have a 401k and a rollover IRA with tax deferred monies.
My wife has a 401k and a rollover IRA with tax deferred monies.
I have a Roth IRA and wife has a Roth IRA too.
Most of our retirement savings is in one of these 6 accounts.
The money in my name is about 8X what is in my wife's name. I have been saving more for longer.
Balances (estimates)
401k-me 50k
Rollover-me 60k
Roth-me 40k
401k-wife 20k
rollover-wife 4k
Roth-wife 3k
Both Roths for 2008 are maxed for first time, 401k contribution is 11% for me and 6% for wife.
Questions:
1) when 72t is applied, is it applied to one account, all tax deferred accounts or something else? Meaning my Rollover and Roth are with T Rowe Price, if I roll the 401k over to Fidelity or Vanguard, is the 72t calculation supposed to include balances from both custodians?
2) when 72t is applied, would it make sense to raid the smaller balances (wife's accounts) and leave the larger balances intact? The amount of money needed the first few years is minimal because I think one of us (me) will retire before the other spouse.
3) as opposed to using (relying on/ planning) for 72t, would it make more sense to stash away money in a taxable account and let all money grow tax deferred or tax free? Each account is invested with a very similar allocation (45% large cap, 15% mid cap, 15% small cap, 25% international or 15% foreign large cap and 10% foreign small cap or 15% foreign established markets and 10% emerging markets).
4) 18 years from now I am age 53 and wife is 52. 72t is designed to last 5 years (58 yo) or until age 59.5 (6 years) whichever is greater- so 72t is a 6 year withdraw, correct?
5) Part of the ER period will be used to convert monies to a Roth if possible- if that affects the 72t withdraw, can someone please comment how? For example if Rollover IRA is 300k and we need 50k taken each year for 72t, could I withdraw 50k, convert 10k to Roth, then next year withdraw 50k and convert 10k to Roth... might run out of money in year 5 or year 6 to satisfy 72t rules... what are the consequences of this? (obviously I could raid another account for the income, but the original 72t provision might not be met).
This is a 15 year plan (meaning the information collected now will be used for a possible FIRE date in 15-18 years). I have time to correct imbalances-maybe or take other actions which could make decision better if there is a problem brewing.
I have a 401k and a rollover IRA with tax deferred monies.
My wife has a 401k and a rollover IRA with tax deferred monies.
I have a Roth IRA and wife has a Roth IRA too.
Most of our retirement savings is in one of these 6 accounts.
The money in my name is about 8X what is in my wife's name. I have been saving more for longer.
Balances (estimates)
401k-me 50k
Rollover-me 60k
Roth-me 40k
401k-wife 20k
rollover-wife 4k
Roth-wife 3k
Both Roths for 2008 are maxed for first time, 401k contribution is 11% for me and 6% for wife.
Questions:
1) when 72t is applied, is it applied to one account, all tax deferred accounts or something else? Meaning my Rollover and Roth are with T Rowe Price, if I roll the 401k over to Fidelity or Vanguard, is the 72t calculation supposed to include balances from both custodians?
2) when 72t is applied, would it make sense to raid the smaller balances (wife's accounts) and leave the larger balances intact? The amount of money needed the first few years is minimal because I think one of us (me) will retire before the other spouse.
3) as opposed to using (relying on/ planning) for 72t, would it make more sense to stash away money in a taxable account and let all money grow tax deferred or tax free? Each account is invested with a very similar allocation (45% large cap, 15% mid cap, 15% small cap, 25% international or 15% foreign large cap and 10% foreign small cap or 15% foreign established markets and 10% emerging markets).
4) 18 years from now I am age 53 and wife is 52. 72t is designed to last 5 years (58 yo) or until age 59.5 (6 years) whichever is greater- so 72t is a 6 year withdraw, correct?
5) Part of the ER period will be used to convert monies to a Roth if possible- if that affects the 72t withdraw, can someone please comment how? For example if Rollover IRA is 300k and we need 50k taken each year for 72t, could I withdraw 50k, convert 10k to Roth, then next year withdraw 50k and convert 10k to Roth... might run out of money in year 5 or year 6 to satisfy 72t rules... what are the consequences of this? (obviously I could raid another account for the income, but the original 72t provision might not be met).