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Old 06-04-2019, 11:02 AM
 
71,463 posts, read 71,629,249 times
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Quote:
Originally Posted by Lizap View Post
Federal taxes are likely to go up in the intermediate to long-term.
no one knows, 40 years ago when i started working who ever thought our tax rates would be so much lower today .....they have been targeting certain ranges to make them lower. in fact i can't believe how little i paid on a 6 figure income in retirement in state and local taxes here in not only new york but nyc where we have a local tax too ....

i paid so little i could not even use the 1600 tax credit i get from new york state for my long term care partnership plan . ss is not taxed in ny , my wifes pension is not taxed , my treasuries were not taxed and the first 20k of retirement money isn't taxed ... a far cry from what i deducted my retirement contributions at while working .

for someone who does some tax planning and is delaying ss until 70 , just using the standard federal deduction , a couple can pull 192k of deferred ira money out tax free and 384k at less then 5% in taxes ,. that can be a gift from the tax gods compared to what you may have deducted it at while working .... that can make a big difference alone compared to converting at higher rates. so there is a lot to consider here on an individual basis .

Last edited by mathjak107; 06-04-2019 at 11:10 AM..
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Old 06-04-2019, 11:19 AM
 
Location: Over yonder a piece
3,908 posts, read 4,642,846 times
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I only just started a Roth a few years ago and plan on sinking as much as I can into it over the next 17 years before I retire. My regret is not starting one when I started in the workforce at age 21.

As such, I've consistently messaged to my children (now teenagers) that upon getting their very first job that offers benefits, they should put the full 15% into 401K and max out the Roth contributions every year of their working life. My daughter is on board with that plan, but my son still needs convincing.
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Old 06-04-2019, 11:55 AM
 
Location: Squirrel Tree
1,185 posts, read 257,615 times
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Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
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Old 06-04-2019, 12:10 PM
 
71,463 posts, read 71,629,249 times
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Quote:
Originally Posted by fatsquirrel View Post
Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
most of us hover somewhere around our final working years as usually the life we built is based on those years ...

also roths shine in other areas because of all the things linked to taxable income ..everything from getting ss taxed , any aca subsidies , to what you pay for medicare is linked to your income ...those rmd's can be very high later on , especially if one spouse has to file single .
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Old 06-04-2019, 12:28 PM
 
Location: Omaha, Nebraska
7,291 posts, read 4,145,583 times
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Quote:
Originally Posted by fatsquirrel View Post
Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
As mathjak said, RMDs on a large IRA or 401k balance can force you into a much higher tax bracket than you anticipated. And RMDs go up every year, so this problem gets worse, not better, as you grow older. A Roth avoids that particular pitfall.
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Old 06-04-2019, 12:43 PM
 
Location: Squirrel Tree
1,185 posts, read 257,615 times
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Quote:
Originally Posted by Aredhel View Post
As mathjak said, RMDs on a large IRA or 401k balance can force you into a much higher tax bracket than you anticipated. And RMDs go up every year, so this problem gets worse, not better, as you grow older. A Roth avoids that particular pitfall.
That sucks that RMD's keep increasing. I didn't know that.
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Old 06-04-2019, 12:57 PM
 
71,463 posts, read 71,629,249 times
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Quote:
Originally Posted by fatsquirrel View Post
That sucks that RMD's keep increasing. I didn't know that.
they are designed to look at your balance each year and to get everything out by a certain age ...
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Old 06-04-2019, 12:59 PM
 
Location: The South
5,214 posts, read 3,627,108 times
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Quote:
Originally Posted by fatsquirrel View Post
Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
You need to do a search on RMD withdrawels. You may be surprised.
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Old 06-04-2019, 01:06 PM
 
Location: Central IL
15,201 posts, read 8,504,300 times
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Quote:
Originally Posted by fatsquirrel View Post
Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
Quote:
Originally Posted by mathjak107 View Post
most of us hover somewhere around our final working years as usually the life we built is based on those years ...

also roths shine in other areas because of all the things linked to taxable income ..everything from getting ss taxed , any aca subsidies , to what you pay for medicare is linked to your income ...those rmd's can be very high later on , especially if one spouse has to file single .
Quote:
Originally Posted by Aredhel View Post
As mathjak said, RMDs on a large IRA or 401k balance can force you into a much higher tax bracket than you anticipated. And RMDs go up every year, so this problem gets worse, not better, as you grow older. A Roth avoids that particular pitfall.
Yeah....ya know there has to be SOME reason people are in Roths...we're not ALL stupid.
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Old 06-04-2019, 01:37 PM
 
5,392 posts, read 6,527,506 times
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Quote:
Originally Posted by fatsquirrel View Post
Roth IRAs are only worth it if you make chit wages because you pay the tax now. Why not get a normal IRA that will tax your much lower old man salary when you're old.
my old man tax rates based are so much higher than what I thought they would be when I set up mutual funds, IRAs in the 1980s.

We just don't know what the future will bring or changes in rates and laws. SO it makes sense to spread it out among all good options.
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