smitcat wrote: ↑Thu Jun 17, 2021 8:24 am
Another post with many words which do not appear very helpful for others, or clear, or even accurate.
For those wanting or needing to know some insights and methods for Roth accounts please read this article by Kitces...
https://www.kitces.com/blog/understandi ... nversions/
Don’t understand because- don’t want to understand/describe Roth’s complications, may be !?
Kitces is pretty good — but don’t even waste anyone’s time - looking at that 2014 article as source of reference for “many things” about Roth, or it’s Gotcha’s !!
* Roth Contributions
* Roth option availability in 401k, or 457 type accounts (nearly 1/3 rd plans - even recently. Even less popular/available amongst Self-Employed-401k/SEP-IRA type providers/plans
* MBR availability is much rare - let alone the Wiki not even built on this topic
* Roth Conversions & ProRata rules — worse yet, how conversions affect progressive tax brackets, affect eligibility of some tax credits, FAFSA, IRMAA, and NIIT - among other things
* Backdoor Roth IRA and ProRata rules
* Mega Backdoor Roth (MBR) in 401k - after tax contributions (time of conversion into Roth 401k Vs. Roth IRAs)
* 5-year clock reset on Roth 401k to a Roth IRA transfer.
* Unlimited asset protection for ERISA type plans such as 401k, or protection extended to Rollover IRAs (do NOT commingle Rollover IRAs with contributory IRAs!). Additional clarity may be needed for multiple types or Roth monies out there once you step out of ERISA protection umbrella.
* Permanent loss of pre-tax dollars for QCD, charity, 7.5% or higher medical costs
* Permanent loss of - Federal taxes paid, temporal (time/years), and state/locality taxes incurred/paid — and never be able to recover those taxes already paid - not even able to Geo-Tax-Arbirage !!
* IRS notices, CP2000 about Roths that folks here on BH receive/dread on threads
* Some additional points with Inherited Roth’s
These are in-addition to my above description about multiple chunks/Rothlets .. and managing each Rothlets basis, as well as Its origin/age time stamps. Market crashes and Sequence of Returns Risk — how they decimate Roth’s especially during retirement withdrawal phase.
Then again - “Roth only/mainly” retirement portfolios May be suited but only for ‘select” few ..
Roth’s (or Roth only) are being sold as antidote to RMDs - soooo false in many ways and not suitable for most people. Besides not a whole lot is wrong with RMDs ..
Care to share — rather than strawman anti-RMD arguments.