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High-Earning Retirement Savers Are Losing Some of Their 401(k) Tax Break
Catch-up contributions will have to be done after taxes for those who make more than $145,000
A lot of "high earners" are likely better off putting some retirement money in a Roth. As already mentioned, IRMAA comes into play once a person goes on Medicare. Then there's the issue of surviving spouse filing single after the other passes, putting them into a higher set of tax brackets.
Guessing one's actual tax liability in retirement is not so easy.
We didn't have the benefit of Roth investment vehicles during most of my working career, but we did have the opportunity to contribute after-tax monies to our IRA accounts and 401(k) plans.
People are surprised when I mention that I have a cost basis in my RMD distributions because of these after-tax contributions.
Probably be OK for me. I will retire before my wife and probably need to delay SS for a few years (probably 3 years). Thus I can draw from a Roth without adding taxable income and tide me over until SS kicks in.
Does anyone know whether working part time here and there will restrict what I can withdraw from a Roth?
Lets say I am 63 at the time and make $65,000 doing occasional contract work. Would there be a limit on what I can withdraw from a Roth each year?
My employer just switched our 401k plan to Fidelity, which offers both a traditional and a Roth option, and employees can split their contribution between the two options. As long as I can put 100% of the catchup contribution into the Roth option (in order to keep things simple from an accounting standpoint), I am fine with this. I NEED more money in Roth space!
Probably be OK for me. I will retire before my wife and probably need to delay SS for a few years (probably 3 years). Thus I can draw from a Roth without adding taxable income and tide me over until SS kicks in.
Does anyone know whether working part time here and there will restrict what I can withdraw from a Roth?
Lets say I am 63 at the time and make $65,000 doing occasional contract work. Would there be a limit on what I can withdraw from a Roth each year?
Thanks
There are no income rules related to Roth withdrawals. There is, however, the 5-year rule on withdrawals. This explains it pretty well.
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