Social Security and IRA's

jimhcom

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Jul 7, 2005
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It is clear by now that the Republicans have completly botched the issue of private accounts and that the Goverment is once again going to sack the taxpayer with higher Social Security taxes and lower benifits. While this is inevitable, there is something which could be done to make it more palatable.   There needs to be a mechanism for transfering funds from a regular IRA to a Roth IRA with a low one time tax and no penalty. (ie. $7500 per yr. @ 10%) This would allow future retirees to build their tax free accounts which would raise their actual retirement income. It would also increase present tax reciepts. While it is true this comes at the cost of future taxes I do not think that will bother Law Makers as passing problems onto future generations seems to be what they do best. If you like the idea e-mail your representitive.
 
jimhcom said:
There needs to be a mechanism for transfering funds from a regular IRA to a Roth IRA with a low one time tax and no penalty. (ie. $7500 per yr. @ 10%) This would allow future retirees to build their tax free accounts which would raise their actual retirement income. It would also increase present tax reciepts.

Why not just increase the Roth IRA max to, say, $25K pp per year?  Then you could throw all or most of your savings into a Roth, and when you retire, take out only enough from your taxable accounts to stay in the 10% bracket. 

I would not want to pay 10% up front because my game plan is to pay 10% or less later.
 
The majority of savings is in 401K/ Rollover IRA's this would be a way to balance funds between taxable and non taxable accounts.
 
What about a compromise. Let 401K capital gains be taxed at capital gains rate.

In all honesty, repayment of the SS bonds to the boomers is going to be hard enough on the future generation. They need these deferred taxes to help pay the freight. Today's workers need to decide if they are willing to pay their freight or get off the speeding train. In other words, pay the general fund bills.
 
Why make things so complicated with multiple separate accounts, all with different tax implications. Just eliminate all taxes on capital gains, dividends,and interest. Then people could have all their money in one account, and not bother with tedious tax record keeping.
 
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