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Old 04-24-2015, 04:20 PM
 
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Quote:
Originally Posted by Ariadne22 View Post
Agree with MJ on that. Invest just as you always have. You have plenty of income. Again, do yearly Roth conversions.
Bada Bing!
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Old 04-24-2015, 05:12 PM
 
Location: Central Massachusetts
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Quote:
Originally Posted by Ariadne22 View Post
Agree with MJ on that. Invest just as you always have. You have plenty of income. Again, do yearly Roth conversions.

Just one point. You cannot put money into a Roth if you are not working.
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Old 04-24-2015, 06:53 PM
 
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Quote:
Originally Posted by mathjak107 View Post
the question is what would your allocations have been if you didn't have to take rmd's ?

that really should be the plan.

in my case my intentions are to just buy the same fidelity funds i have in my ira in my taxable account since i am comfortable with a 50/50 allocation.. if i find the volatility a bit to much i can always go more to my income and capital preservation model and less in the growth and income model since i use a mix of the two evenly split..
Bada Bing!
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Old 04-24-2015, 07:11 PM
 
Location: Wisconsin
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Quote:
Originally Posted by golfingduo View Post
Just one point. You cannot put money into a Roth if you are not working.
Not talking about earned income. Talking about existing tax-deferred IRAs - which can be converted into a Roths at any time - whether or not you are working. Doing so means you pay tax on money converted and then it continues to grow tax-free in the Roth with no RMD requirement. Lots of people do this after retirement (and even before) - read comments upthread on this issue. I began last year with 25% of one IRA, converting another 25% this month. Once that IRA is all Roth, then I'll move on to the next one - converting as much as I can each year without jumping tax brackets.

Per IRS:
Quote:
How do I convert my traditional IRA to a Roth IRA?
You can convert your traditional IRA to a Roth IRA by:
  • Rollover – You receive a distribution from a traditional IRA and contribute it to a Roth IRA within 60 days after the distribution (the distribution check is payable to you);
  • Trustee-to-trustee transfer – You tell the financial institution holding your traditional IRA assets to transfer an amount directly to the trustee of your Roth IRA at a different financial institution (the distributing trustee may achieve this by issuing you a check payable to the new trustee);
  • Same trustee transfer – If your traditional and Roth IRAs are maintained at the same financial institution, you can tell the trustee to transfer an amount from your traditional IRA to your Roth IRA.
A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA. The conversion is reported on Form 8606, Nondeductible IRAs. See Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), for more information.

http://www.irs.gov/Retirement-Plans/...th-Conversions
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Old 04-25-2015, 02:11 AM
 
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just run the numbers before converting to see if they are doing any good.

unless you can convert money in a bracket below what you will be taxed at later or able to claim perks like tax free ss then it is likely not going to accomplish much converting .

basically if you can fill the 15% bracket with a conversion that will be taxed at 25% when rmd's or ss kick in then do it.

other wise it may not be worth it.

the reality is if you have a big enough ira the conversions that you can accomplish filling the 15% are like peeing in the ocean and do not alter much in the scheme of things.

with a 20k pension , 50-60k from fidelity in taxable distributions game is over for us even without ss in the equation so no roth conversions. we already ate up the 15% bracket from the start.

Last edited by mathjak107; 04-25-2015 at 03:19 AM..
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Old 04-25-2015, 05:32 AM
 
29,791 posts, read 34,889,516 times
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Quote:
Originally Posted by mathjak107 View Post
just run the numbers before converting to see if they are doing any good.

unless you can convert money in a bracket below what you will be taxed at later or able to claim perks like tax free ss then it is likely not going to accomplish much converting .

basically if you can fill the 15% bracket with a conversion that will be taxed at 25% when rmd's or ss kick in then do it.

other wise it may not be worth it.

the reality is if you have a big enough ira the conversions that you can accomplish filling the 15% are like peeing in the ocean and do not alter much in the scheme of things.

with a 20k pension , 50-60k from fidelity in taxable distributions game is over for us even without ss in the equation so no roth conversions. we already ate up the 15% bracket from the start.
Bada Bing and the reality that to high a income is not a bad thing!
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Old 04-25-2015, 06:15 AM
 
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never a bad thing. in fact as much as we all complain , income taxes are really not all that bad today.

the effective rates can be quite low. we had a huge capital gain last year when our partner sold those commercial lease rights in nyc.

including a 17k amt tax penalty on top of the normal taxes and nyc and nys income tax we hit 31% from dollar 1. but the actual federal tax on almost 500k was only 21% including all surcharges and phase outs.

even while the rmd's look like a lot you have to remember that each year tax brackets allow more and more income through at lower rates. by the time i am ready for rmd's 125k may be the 15% bracket.
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Old 04-25-2015, 06:38 AM
 
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We sold o/g properties in 2014 for nice amount but the recapture penalty raised the amount we owed significantly--we were in the 'ouchx3' bracket...
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Old 04-25-2015, 10:49 AM
 
Location: RVA
2,172 posts, read 1,270,292 times
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Actually, that is another thing to check. Have the increases for each bracket simply been following inflation? Do the retirement calculators assume that as well?
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Old 04-25-2015, 10:52 AM
 
Location: North America
5,936 posts, read 4,672,913 times
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Is there a problem using "tax advantaged" retirement accounts exclusively for growth and "tax disadvantaged" non-retirement accounts for dividend income?
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