Traditional or Roth IRA?

[basstracker89]

The only way to avoid the tax man is to do a Roth. My Wife's mother has both Roth and conventional. And we do too. So I've seen both sides. Taxes will never go down. It's a sales pitch. It takes a lifetime to build anything. Pennies at a time. But it's never too late to start.
The only down side is you can't touch that money till you're 59 1/2. Or 5yrs to vest. After that you're free and clear. See if you a conventional, then you have required distributions at 70 and beyond. That's where they get you on the tail end, taxes. It's a cash cow for the government. You do a Roth, never again. I always expected they'd change the laws on that. But so far no. Just think what you'd saved up if you started when you got your first job

 

[dcline9163]

The only way to avoid the tax man is to do a Roth. My Wife's mother has both Roth and conventional. And we do too. So I've seen both sides. Taxes will never go down. It's a sales pitch. It takes a lifetime to build anything. Pennies at a time. But it's never too late to start

Wrong if you’re talking while you’re still working Traditional IRA’s brings your taxable income down when you file your taxes. And yes when you retire if you’re not working then you none off SSI and retire is much less as opposed to when you are working. Now we’re talking 65 and older, you don’t even have to file State taxes, if you’re not working.
For Instance
Still working yearly income is $100k federal taxes are $33000.00 get an IRA on both you and your wife at say$6500.00 each brings your taxable income down to $87000.00 and if you hit your 401k hard enough it like 25% going into it then it will bring it down another $25000.00 so that $100k drops to $62000.00. There your taxes will be substantially lower and possibly pay for one IRA back in a return to you from the IRS. You got to remember if the IRS gets it you won’t get it back. I rather pay the taxes on and get the benefits of some of my money than none of it. Yes Roth’s are after taxes money put in but with no benefits and you will pay the taxes on money earned.

 

[TheGman]

roth after you max out 401k

 

[dcline9163]

roth after you max out 401k

That’s an option, I just know in my scenario, I would pay $13,00.00 for 2 Traditional IRA’s and I would get back on my tax return between $6,000 and $7000,00 each year. When I cashed in some each year I only had 15% in federal taxes taken out and payed no state taxes.

 

[basstracker89]

Wrong if you’re talking while you’re still working Traditional IRA’s brings your taxable income down when you file your taxes. And yes when you retire if you’re not working then you none off SSI and retire is much less as opposed to when you are working. Now we’re talking 65 and older, you don’t even have to file State taxes, if you’re not working.
For Instance
Still working yearly income is $100k federal taxes are $33000.00 get an IRA on both you and your wife at say$6500.00 each brings your taxable income down to $87000.00 and if you hit your 401k hard enough it like 25% going into it then it will bring it down another $25000.00 so that $100k drops to $62000.00. There your taxes will be substantially lower and possibly pay for one IRA back in a return to you from the IRS. You got to remember if the IRS gets it you won’t get it back. I rather pay the taxes on and get the benefits of some of my money than none of it. Yes Roth’s are after taxes money put in but with no benefits and you will pay the taxes on money earned.

That's the get it now approach. You're not getting the big picture. You do it right, you'll have more income retired than when you were working. And yes, your taxes will be higher. Trust me. And not only that, Medicare will penalize you too

 

[TheGman]

I max out mt 401K and get employer match

Income limit so I cannot get a roth (which is bull****)

My advisor suggest converting some to roth in retirement (some funds)

 

[dcline9163]

That's the get it now approach. You're not getting the big picture. You do it right, you'll have more income retired than when you were working. And yes, your taxes will be higher. Trust me. And not only that, Medicare will penalize you too

Well I know what I have and I haven’t been penalized yet. Yes my bing is very well.

 

[basstracker89]

I max out mt 401K and get employer match

Income limit so I cannot get a roth (which is bull****)

My advisor suggest converting some to roth in retirement (some funds)

Absolutely!! These days you can have a Roth 401k. If you have that option, do it!!

 

[BillsCamino]

I wish I could have done more Roths....wasn't an option.

I turned 73 this week. I haven't touched my 401K since I retired nearly 13 yrs ago.
Now I'm faced with RMD.
What makes things worse...my wife will be 73 next year, effecting her 401K too.

 

[fast306stang]

when you retire then your income is much lower so less taxes will be taken out when you withdraw.

This is not necessarily true. I'm expecting my retirement income to be much higher than my income is now.