Q for those of you over 59.5 YO and a Roth IRA

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HenryPorter
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Q for those of you over 59.5 YO and a Roth IRA

Post by HenryPorter » Sat Sep 06, 2014 4:58 pm

Anybody here who has a Roth IRA and is older than 59.5 years old? Do you have the dividends and/or interest payments sent to another account that is non-IRA?

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Peter Foley
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by Peter Foley » Sat Sep 06, 2014 5:02 pm

I have a Roth and am 63.5. I retired at age 61. I have capital gains and dividends reinvested within the Roth. Most of our money is in tax deferred (401k and 403b) so we will not tap our Roths for at least 20 years. Our Roths are relatively small as we were not able to contribute to them for many years.

HenryPorter
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by HenryPorter » Sat Sep 06, 2014 5:14 pm

Peter Foley wrote:Most of our money is in tax deferred (401k and 403b) so we will not tap our Roths for at least 20 years.
I have envision when I am in my 60's I will probably still be working. Contingent plan will be to draw off my traditional IRAs to fund a Roth if tax laws are favorable still then. Flaws in my plan versus just converting them outright now? Nobody knows, I guess, if Roth IRAs will have the same advantages decades from now.

The Wizard
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by The Wizard » Sat Sep 06, 2014 5:16 pm

HenryPorter wrote:Anybody here who has a Roth IRA and is older than 59.5 years old? Do you have the dividends and/or interest payments sent to another account that is non-IRA?
No, definitely not.
Goal right now is to get higher percentage of assets INTO my Roth account...
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Toons
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by Toons » Sat Sep 06, 2014 6:13 pm

I am 63 and am continuing to have dividends and capital gains revinvested in Mutual funds that are held in All retirement accounts,,,Roth,Regular Ira,401k
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Alan S.
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by Alan S. » Sat Sep 06, 2014 7:59 pm

Taking a distribution from a Roth IRA will most likely be tax free, but those dollars will generate tax free earnings if they are reinvested within the Roth IRA, but future earnings on these dollars outside the Roth IRA will be taxable. So this is generally a very bad idea.

That said, there could be some unique situations where such a distribution could benefit you. For example, if you are in a very high bracket at present and still working but cannot afford to max out your pre tax 401k contributions, a Roth withdrawal could be used to subsidize maxing out your pre tax 401k contributions and will lower your taxes because the Roth withdrawal will be tax free in most all cases. This would function as sort of reverse or recharacterized conversion. If you later on find it beneficial to increase your Roth, you can always convert incremental amounts from your pre tax retirement vehicles in a year where your marginal rates are lower.

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cheese_breath
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by cheese_breath » Sat Sep 06, 2014 8:09 pm

Age 73 with two Roths . I have everything reinvested. If I need any money I can withdraw it myself. Otherwise I see no reason not to let the dividends and interest continue to earn more tax free.
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GerryL
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by GerryL » Sat Sep 06, 2014 10:43 pm

The Wizard wrote:
HenryPorter wrote:Anybody here who has a Roth IRA and is older than 59.5 years old? Do you have the dividends and/or interest payments sent to another account that is non-IRA?
No, definitely not.
Goal right now is to get higher percentage of assets INTO my Roth account...
Ditto. I see no reason to divert earnings from my Roth IRA into a non-IRA account. If you're worried about having to pull money out when the market is down, I suppose you could divert investment earnings into a MM Roth account. At least the minimal interest the MM might throw off would still be in the Roth, and you could always decide to move funds from the MM back into the higher earning Roth account.

mhalley
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by mhalley » Sun Sep 07, 2014 12:11 am

I am retiring next month, and plan to convert my 401ks gradually to roth iras, so I want my Roths to grow for now. Thus I reinvest within the ROTHS.
Mike

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cowboyinasia
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by cowboyinasia » Sun Sep 07, 2014 5:33 pm

mhalley wrote:I am retiring next month, and plan to convert my 401ks gradually to roth iras, so I want my Roths to grow for now. Thus I reinvest within the ROTHS.
Mike

Convert 401k to Roth?? I do this to the tune of a few percent of my salary every year - a post tax 401k contribution converted to a Roth (after maxing out pretax 401k and IRA contributions) but didn't realize people do this to established 401k accounts. Is this only when in retirement? Is this concept in the wiki?

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Ged
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by Ged » Sun Sep 07, 2014 6:43 pm

Definitely not. I am planning to pass my Roth accounts to my children.

HenryPorter
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Re: Q for those of you over 59.5 YO and a Roth IRA

Post by HenryPorter » Tue Sep 09, 2014 11:54 am

Ged wrote:Definitely not. I am planning to pass my Roth accounts to my children.
Just saw this:

http://online.wsj.com/articles/should-i ... =yahoo_itp

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