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Old 01-24-2016, 08:10 AM
 
427 posts, read 189,413 times
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I am planning to retire in one or two years.
Although I understand the benefits of Roth IRA, it seems to me it should be established earlier in life.
Is that correct?
Thank you.
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Old 01-24-2016, 08:21 AM
 
Location: MMU->ABE->ATL->ASH
9,130 posts, read 17,167,980 times
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You can shelter your Growth from taxes, so you "save" paying taxes on the growth.

If you don't need the money to live on for 5 years.

So It can make sense to fund a Roth close to retirement age, depending on when you will need the money.
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Old 01-24-2016, 11:04 AM
 
Location: Florida
4,376 posts, read 3,714,793 times
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Depends on how you want to use the money and how much money you are putting into the ROTH
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Old 01-24-2016, 11:15 AM
 
Location: Eastern UP of Michigan
1,202 posts, read 683,612 times
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We are 1 retired and 1 going semi in 2016 but we opened a ROTH for both of us thru Myra.com. We are using it as a stash spot for misc. expenses in the next 3ish years.


The positives are it functions like any other online savings account.
The biggie is that it invests in the "G" fund security as found in the TSP for federal employees. The G fund is paying 2.13% at this time and there is no market risk or rate risk.


Only negative I can see for our needs is the 15K max. balance for each.
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Old 01-24-2016, 11:59 AM
 
Location: SoCal
13,294 posts, read 6,362,704 times
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I have been contributing either through the back door or this year because our income will be low, we only work one month. It's where I put my most risky assets. You might want to open one just in case you might want to convert some IRA to Roth IRA. I will do some conversion until both of my husband and I turn 70.5 years old.
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Old 01-24-2016, 02:56 PM
 
Location: Central Massachusetts
4,800 posts, read 4,856,396 times
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Quote:
Originally Posted by Maple47 View Post
I am planning to retire in one or two years.
Although I understand the benefits of Roth IRA, it seems to me it should be established earlier in life.
Is that correct?
Thank you.
Lots of discussion is going to arise from this. It is going to depend on your combined retirement income. Combined in two ways. Spouse and you and all 401k, and IRA's that you are withdrawing from. Are you planning on taking lump sum? Will you continue to work? Will your spouse? What do you plan for the income? Just asking if a Roth is for you with almost no other information will not give you any good answers.

Here is my take. I have been back and forth on whether or not to convert my 401k to Roth. I have at this point figured it is not worth it. First I would be changing from an account that I think has done very well and the fees are very low to something unknown. Two I would still have to pay taxes on that income as it comes out so if I have any extra that I do not think I will use I will gift it to my daughter in the form of a retirement account for her. I will use that savings to enjoy my remaining years. I want to buy a boat and do some travel. But all of that is me. I have retirement income above and beyond all my savings. In fact my income will allow DW and I to travel to visit family in Korea any number of times at any time we want. Or we can visit golf courses around the world. No not in 5 star luxury but neither do we need to rent a canoe to go across the Atlantic.
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Old 01-24-2016, 03:18 PM
 
Location: SoCal
13,294 posts, read 6,362,704 times
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Use Taxcaster to estimate what you will paying in tax when you retire, I won't tell you what I will pay, I'm sure HRC will pass a law to do away with it if I mention it here, but let's say it's low and it makes a lot of sense to convert as long as it's low. In 10-15 years, between RMD and my SS it will be worst. Yes I want a boat too! We'll see how it goes when I retire.
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Old 01-24-2016, 05:27 PM
 
Location: Northern panhandle WV
3,007 posts, read 2,177,266 times
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Another thing to consider though I hope it never affects you, is if you are sued for something etc. qualified retirement funds can not be attached so the more of your assets you can have in such funds be better off you are, they can be attached by the government for taxes etc. but no one else, UNLESS and UNtil you remove them from the sheltered account and place in your regular accounts.
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Old 01-24-2016, 06:59 PM
 
Location: SoCal
13,294 posts, read 6,362,704 times
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What about embrella insurance? It's pretty cheap, you can get up to $5 million coverage, the lawyers will go to bat to save the $5 million.
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Old 01-25-2016, 05:06 AM
 
Location: Central Massachusetts
4,800 posts, read 4,856,396 times
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Quote:
Originally Posted by JIMANDTHOM View Post
We are 1 retired and 1 going semi in 2016 but we opened a ROTH for both of us thru Myra.com. We are using it as a stash spot for misc. expenses in the next 3ish years.


The positives are it functions like any other online savings account.
The biggie is that it invests in the "G" fund security as found in the TSP for federal employees. The G fund is paying 2.13% at this time and there is no market risk or rate risk.


Only negative I can see for our needs is the 15K max. balance for each.

JIMANDTHOM as easy as that fund is to begin to start it is limited. You will be able to transfer it to another manager like TD/Ameritrade or Charles Schwabb or Fidelity. It gives you the needed balance to pass the required minimum deposits. I do not think you will be able to open more than two. One for each of you and as soon as you reach that 15k level in each you will be required to move it.


Newbiehere I am not sure I follow the reason you say for umbrella insurance. It seems a waste to do something seperate in addition to home owners or property owners insurance and car insurance. Many of us kind of already do that bundling with insurances already.

If your retirement fund stays in a retirement fund the only entity that can attach it is the government. If you don't make mortgage payments the bank can lien on your house. If you don't make your car payments the bank can tow your car away.
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