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I tend to prefer the Traditional IRA over the Roth but everyone's financial situation is different.
Vanguard Star is a decent fund, but not their best. Vanguard Wellington is a better performer with a similar investment mix and lower expenses than Star. But Star is good for those who don't have the $3000 minimum for other Vanguard Funds. Technically, Star is better diversified than Wellington, but Wellington has consistently better performance and it's diversification is good enough.
I have heard great things about the Wellington but I could only afford the Star. I made $200 bucks.
i always figure if even one person gets something out of my sometime lengthy posts and if it even makes them research things , then it is worth my time .
Keep preaching Rev. Jak! I have learned immeasurably since discovering C-D a few years ago & retiring 3 years ago, plus I keep having to be reminded of some details that slipped by me the first time...
Why did you say that? It is not a matter of listening. It is a matter of understanding.
In your case, yes. But many of us have had multiple conversations in the past with people who just don't want to listen and learn, and so we get burned out. Watching people commit financial seppuku because they simply refuse to learn any better even though you've been trying your best to help them is maddening.
I appreciate all of your posts. Unfortunately, I am still not getting it. My retirement income will consist of the following:
Social Security
Pension
Roth or Traditional IRA (I cannot do both)
Employment- Low level job ( I have no desire to stop working)
I will start collecting my pension at 65 and the rest of the accounts at 67. All of the accounts are taxable except the Roth. It would be beneficial to get a traditional IRA so I could get a deduction now. At the present moment, I do not have any deductions. That will change when I buy my condo.
My current tax rate is 25%. ($37,650- $91,150) I do not think it is likely my income will be less than $37,650 when I retire. I am already close to that with my anticipated social security and pension. Social Security is skewed because I have been underemployed for the past couple of years. So I have already reached $37,650 without factoring in my IRA and income from working.
I do not understand what is meant by drawing tax free on a traditional IRA if I withdraw a certain amount. Do you draw lump sums of money or do you draw a monthly income? I plan to draw a monthly income. Is that wrong?
each one of us gets standard deductions and exemptions to reduce the amount of our taxable income each year .
plus a 65 year old gets additional perks .\
so if you tax plan correctly , a couple can take up to 22k any way you like out of your ira money and the standard deductions and exemptions leave you with no taxes do .
if you have roths too you can take money out of the roths tax free , combine it with the 22k ira money and have a very nice income with zero taxes due.
but if you have pensions and taxable ss then that will eat up the deductions and exemptions and that plan will not work unless you can delay ss and your pension and let it grow bigger while getting out the tax free money from the ira for a few years ....
I appreciate all of your posts. Unfortunately, I am still not getting it. My retirement income will consist of the following....
The 2016 Standard deduction + personal exemption (over 65) $11,900: subtract from pension + wages + retirement account withdrawals total
Add 1/2 (probably) SS total = this is your combined income that Fed taxes will be due on
So you can vary your tax burden by using a Roth (tax free) retirement account for withdrawals with a trad IRA (taxable) & moving to a state with lower taxes on SS
at age 70 1/2 you will have to take mandatory minimum IRA withdrawals, iirc it starts about 3.75% & increases yearly
(.... also isn't there a financial effect of working while drawing SS? Doesn't apply to me so I never researched details.)
I think this is basically it, any corrections please feel free to add folks.
The 2016 Standard deduction + personal exemption (over 65) $11,900: subtract from pension + wages + retirement account withdrawals total
Add 1/2 (probably) SS total = this is your combined income that Fed taxes will be due on
So you can vary your tax burden by using a Roth (tax free) retirement account for withdrawals with a trad IRA (taxable) & moving to a state with lower taxes on SS
at age 70 1/2 you will have to take mandatory minimum IRA withdrawals, iirc it starts about 3.75% & increases yearly
(.... also isn't there a financial effect of working while drawing SS? Doesn't apply to me so I never researched details.)
I think this is basically it, any corrections please feel free to add folks.
Once you reach full retirement age social security will not penalize you if you work.
each one of us gets standard deductions and exemptions to reduce the amount of our taxable income each year .
plus a 65 year old gets additional perks .\
so if you tax plan correctly , a couple can take up to 22k any way you like out of your ira money and the standard deductions and exemptions leave you with no taxes do .
if you have roths too you can take money out of the roths tax free , combine it with the 22k ira money and have a very nice income with zero taxes due.
but if you have pensions and taxable ss then that will eat up the deductions and exemptions and that plan will not work unless you can delay ss and your pension and let it grow bigger while getting out the tax free money from the ira for a few years ....
I think I get it now. I am single and most of my income will be taxable. I will not likely have two retirement accounts. It will be either be the Roth or traditional IRA. I will take the pension at 65 and the rest at 67.
I think the Roth is best.
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