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Old 02-08-2015, 07:14 PM
 
18,848 posts, read 13,597,069 times
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Quote:
Originally Posted by Bradmilano View Post
not necessarily. He has liquidity to put in 6500 to a roth. He also wants to use roth funds as opposed to a taxable portfolio to fund other expenses. It's a nice situation to be in.


If you have 6500 available to fund your roth where is the advantage of taking anything out of the roth before exhausting the 6500? If you are going to put any funds back in the roth it would make part if not all of the distribution irrelevant
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Old 02-08-2015, 07:29 PM
 
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he has the ability to put in 6500 into a roth each year but no more than that. So he can still take advantage of that while he still can because he has earned income. That's the whole point even if he wants to pull money out to deal with other expenses. You need to look at the bigger picture. It's the same reason why people fund an HSA but don't use it to pay medical expenses.
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Old 02-08-2015, 07:35 PM
 
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Quote:
Originally Posted by Bradmilano View Post
he has the ability to put in 6500 into a roth each year but no more than that. So he can still take advantage of that while he still can because he has earned income. That's the whole point even if he wants to pull money out to deal with other expenses. You need to look at the bigger picture. It's the same reason why people fund an HSA but don't use it to pay medical expenses.


If I take 6500 to pay for a new bed and the contribute 6500 nothing changed and I didn't take advantage of anything. You either haven't explained the bigger picture well enough or you're clueless
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Old 02-08-2015, 07:54 PM
 
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Let's assume You have enough cash to pay for all of your daily expenses. In addition every month you put $500 into a Roth IRA because you have earned income and have the ability to do so. You want to continue funding this roth for as many years as you are able to do so. Because one day you won't have the unearned income any more and you will have lost the ability to do so. Roth contributions make you happy because you are an above par active trader who can make substantial gains in the market and the roth allows you to do this and never get taxed on the gains. In addition you have a decent taxable account that has some modest unrealized gains. The Roth has $2million and the taxable account has $1 million. You want to buy a condo for $200,000. In order to pay for the condo you either have to sell some stock In your portfolio (and pay tax on the profit) or you can take the money from your roth which has grown substantially in a tax free environment. What do you do?

Forget about the ability to borrow on margin. That's outside of this scenario even though it may be a better play than a roth distribution. What I am asking is faced with only those two choices, what do you do?


The OP is just asking if he can take a distribution out of the roth and make a contribution in the same year.
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Old 02-08-2015, 08:01 PM
 
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I'm not understanding how you don't understand the net effect. If you take 200k out of your roth and then put 6500 back in, there is no difference than just taking out 193,500
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Old 02-08-2015, 08:13 PM
 
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I understand the net effect. Assume the 6500 has already been put into the account. He just wants to know if its ok to take a distribution in the same year. Why is this so hard to understand?

Let's say you have your thought in your head on January 2nd and say I am only going to take out $193,500 from the roth and then use the $6,500 of the liquid money I was going to put into the roth this year and instead use it to make up the balance of the $200k. Since you still have the ability afterwards to put $6500 into a roth because you have earned income and you want to be to invest it tax free, why wouldn't you choose to do that instead of putting it into a taxable account where the gains will be taxed?
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Old 02-08-2015, 08:28 PM
 
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If you're selling shares of equities and then reinvesting, aren't you selling and buying at pretty much the same price? I don't see where the benefit is.

Last edited by arrieros81; 02-08-2015 at 08:48 PM..
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Old 02-08-2015, 09:38 PM
 
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None of you are really understanding why I'm asking the question. And there's some complicated reasons behind it. I just wanted an answer ...not financial advice. Let's move on. I'll find it elsewhere.
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Old 02-08-2015, 09:46 PM
 
2,294 posts, read 1,559,623 times
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Quote:
Originally Posted by Bradmilano View Post
he has the ability to put in 6500 into a roth each year but no more than that. So he can still take advantage of that while he still can because he has earned income. That's the whole point even if he wants to pull money out to deal with other expenses. You need to look at the bigger picture. It's the same reason why people fund an HSA but don't use it to pay medical expenses.
You are the only one who gets why I might be asking this. Bunch of folks who like to belittle on here without
considering that there might be a larger picture and a reason for asking. Maybe I make a lot in my Roth through trading and just want to take some oit periodically...maybe there are other reasons. Maybe I like to take out money out of my Roth on Tuesdays because I like the Account number better than my personal Account number.
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Old 02-08-2015, 10:02 PM
 
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Quote:
Originally Posted by Burkmere View Post
You are the only one who gets why I might be asking this. Bunch of folks who like to belittle on here without
considering that there might be a larger picture and a reason for asking. Maybe I make a lot in my Roth through trading and just want to take some oit periodically...maybe there are other reasons. Maybe I like to take out money out of my Roth on Tuesdays because I like the Account number better than my personal Account number.
I deal with this situation often with my clients. Bottom line...if you take a distribution from a roth, as long as meet all of the eligibility requirements you can still make the maximum contribution.
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