How we minimize lifetime taxes and maximize wealth. How we minimize lifetime taxes and maximize wealth. Thanks; yeah currently I'm maxing out a Roth after I've maxed out my traditional 401k. Maybe even modeling for my blog like Go Curry Cracker! Still in Beta, but jump in and try it out. Since no one knows what Congress will be taxing 10, 25, 35 years from now, I usually say it's good to have some tax-deferred and some tax-free money in retirement. gocurrycracker.com. Currently it’s Roth, mainly because the match is traditional, and my profit sharing contributing for my solo 401K is traditional; I do a backdoor Roth IRA too, or course. This is what Go Curry Cracker has done for a decade. Article by Go Curry Cracker! though perhaps only for certain types of assets in the non-deductible, like those throwing off significant interest or non-favored dividends (e.g., REITs). Smart guy. Roth accounts also allow you to take out all the money you've contributed without paying penalties, so setting up a 72(t) might be unnecessary. Go Curry Cracker's blog has an informative post on the topic. If you don't want to pay more in taxes than necessary, choose wisely. Otherwise, enjoy deferring the taxes until later. Who knows where tax rates will be in the future, but it it very likely they will go up. Roth 401ks And How They Can Help Your Retirement Seeking Alpha. 1 year ago. As five more tax years go by, perhaps they contribute another $25K to the Roth IRA while it earns another $35K of gains. Taxation. With a Roth IRA, you contribute after-tax money. That means Roth investments can continue to grow for possibly decades. Pinterest . Obamacare Optimization vs Tax Minimization - Go Curry Cracker! How we use a Roth IRA Conversion ladder to beat the RMD. The most significant and prominent difference between a Roth IRA and a Traditional IRA is when and how you get taxed. With my $50,000 taxable income, if I put $4,000 into my traditional … You contribute pre-tax dollars. March 10, 2015 at 1:46 pm. Another way to convert is to call the custodian and ask them to do it by giving the originating and destination account numbers and the amount (or fund) to convert. I let, that go curry cracker roth shows natural. Home; Help; Search; Login; Register; Go Curry Cracker Forum » Go Curry Cracker » Taxes » When to rollover 457 and traditional ira to Roth ira « previous next » Print; Pages: [1] Author Topic: When to rollover 457 and traditional ira to Roth ira (Read 1620 times) HappyPlace333. If you think you will be in a higher tax bracket in retirement, go for the Roth 401k and pay the tax now. For MFJ, 73k AGI is in the 12% tax bracket (plus possible State taxes.) 2a. How we minimize lifetime taxes and maximize wealth. May 8, 2016 - How we use a Roth IRA Conversion ladder to beat the RMD. After that I'm putting it in a brokerage account, but I need to do some more planning to make sure I'm not ending up with too much in my Roth. When you contribute to a Roth IRA, you are contributing after-tax dollars. Working through middle school, high school and college, I never made more than a few thousand dollars a year, so didn’t owe taxes on the money I earned. May 8, 2016 - How we use a Roth IRA Conversion ladder to beat the RMD. Traditional >= Roth >= Non-Deductible Traditional >= Taxable. Today. Comments from The White Coat Investor (TWCI) and The Finance Buff (TFB) are less clear, but TWI seems to err the same way as GCC, while TFB gets it right. There are two main types of individual retirement accounts (IRA) available to you, and whether you choose the traditional version or the Roth, or … Non Spouse Beneficiaries Rules For … Feb 18, 2015 - How we use a Roth IRA Conversion ladder to beat the RMD. Identify the cash/shares to be moved. Trad or Roth? 1. How we minimize lifetime taxes and maximize wealth .. GCC vs The RMD - Go Curry Cracker! Then select the Roth account on the right hand side, and select the destination fund. So the tax diversity seems to be the driving factor. Harry Sit says. Required Minimum Distribution Rmds Fidelity. Go Curry Cracker raised this point in response to my comment on the blog, but I think the chances of Congress effectively reneging on the bargain being struck with today's Roth account-holders are vastly outweighed by the likelihood of changes to the tax code that remove the 0% rate for long term gains and dividends or otherwise upset the incentives promoting leisure over labor. You don’t pay tax when you withdraw from Roth accounts. Go Curry Cracker website explains this in great detail – the 3 stages of 401k: (1) accumulation, (2) conversion, and (3) withdrawal/ rmd. 3 People Who Benefit from a Roth (and 2 Who Don't) Who should go with a Roth and who should go with a traditional IRA or 401(k)? Roth vs Traditional 401(k) In a traditional 401(k), employees make pre-tax contributions. This seems to work quite well for “early retirement” when there is over a decade and frequently several decades to convert as much as possible of the traditional 401k contributions. February 2019 In the tax minimization game, which is more important, Roth conversions or capital gain harvesting? Ira Required Minimum Distributions Table Bankrate Com. They pay those taxes from other funds, not from the funds that are converted.) Feb 18, 2015 - How we use a Roth IRA Conversion ladder to beat the RMD. In a Traditional IRA, your contribution is deducted from your income during the year it is made. There’s an added cost on converting to Roth and harvesting long-term capital gains when you are getting the premium subsidy to buy health insurance under Obamacare. Spousal Rollover Rules For Inherited Roth Traditional Iras. It's worth noting that, while much (all?) There are four key differences between a Roth IRA and Traditional IRA. If they convert that traditional IRA to a Roth IRA in just one transaction, they’ll pay income taxes on the $80K of both contributions & gains. Welcome to the Go Curry Cracker Community Forum! Visit. of the remaining advice is good, GCC is incorrect when advising people how to evaluate the tax effects of traditional vs. Roth. I had this mentality too, then I read Go Curry Cracker's The Great Roth Controversy and realized that contributing to Traditional is the optimal strategy for everyone except for a few exceptions (very low earners, students, etc.) Article from . Using what he learned in the Traditional IRA vs. Roth IRA article, he decides to fund a Traditional IRA rather than a Roth IRA because he knows he can convert the Traditional IRA to a Roth IRA after FI without paying any taxes. John. Both 403(b) plans and Roth IRAs are vehicles designated for use in retirement planning. After that, you pay 25% to 30% tax on Roth conversions and 9.5% to 15% tax on realized long-term capital gains. Traditional: Taxes. Traditional IRA vs. Roth IRA – The Final Battle. Roth vs. traditional: How to choose The biggest difference between a Roth IRA and a traditional IRA is how and when you get a tax break. GCC vs The RMD - Go Curry Cracker! 403(b) vs. Roth IRA: An Overview . Roth Conversions vs Capital Gain Harvesting - Go Curry Cracker! You Are an together electric center. Veronica Corningstone( Christina Applegate): ' Well, you also are how to turn a printing. I’m curious to know your take. Log in. Roth vs. Explore. Ivan . How we … What would MDM do given my financial situation? I think the 5k from the traditional IRA fund really should be treated as the “last” 5k in the context of traditional vs Roth because if you had used a Roth you would only have 15k of taxable income rather than 20k with the other 5k coming from your Roth. Gcc Vs The Rmd Go Curry Cracker. Article from gocurrycracker.com. I’ve gone back and forth on whether to do a traditional vs Roth in my TSP. Presumably, you get insurance through your employer so ACA subsidies aren't involved. If you think you need to access all of your money (contributions and gains) before you hit 59.5 years of age, 72(t) could be the way to go. Reply. July 19, 2016 at 8:51 am . So, if I have taxable income of $50,000 and put $4,000 into my Roth, I still pay taxes on $50,000. Thoughts on minimizing taxes and maximizing ACA subsidies. Most savers recognize that the traditional versus Roth decision is most likely with an individual retirement account (IRA). Bogleheads, Michael Kitces, and The Mad Fientist clearly get it right. If you think a 21% marginal saving rate is good enough for you to use traditional, contribute a total of $23.8K to traditional 401k/457b plans 2b. Most typically you will see this Roth vs Traditional tradeoff analyzed by looking at the marginal rate for contribution / withdrawal. Let’s also assume he decides to max out his IRA during his working years. And unlike a 401(k) or traditional IRA, you’re not required to start taking minimum withdrawals after age 70 ½. Sign up. Great article. We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids. Just another observation. While this reduces your taxable income now, you'll pay regular income tax … Go to the traditional IRA and select "Exch" which is listed next to "Buy" and "Sell." I’m of the opinion that they will go up much more for higher income types than those living near the standard deduction (like myself in the future). With a traditional IRA, your contribution is pre-tax. 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