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re: IRA early withdraw to fund another. (Update)
Posted on 10/1/12 at 9:43 am to ZereauxSum
Posted on 10/1/12 at 9:43 am to ZereauxSum
quote:
So, increase wife's contribution and use the IRA distribution to cover the decrease in take home?
Thats what Im thinking. I may get his advisor to call me to see if there are any facts missing. I just dont see why he would advise against doing this.
This post was edited on 10/1/12 at 9:44 am
2
Posted on 10/1/12 at 9:47 am to SippyCup
I agree with you, but I also sit on the same side of the desk.
Interested to hear the advisor's logic to decline this option.
Interested to hear the advisor's logic to decline this option.
Posted on 10/1/12 at 9:58 am to SippyCup
Yeah, keep us updated. I'm interested to know as well. This advisor could be really smart or really dumb 
Just running through the numbers:
-15000 IRA withdrawal
-IRS steals 30% (20 withholding and 10 penalty) leaving them with 10500
-Wife increases contribution by 10500, boss matches 1 for 1
So at the end of the year, client has 21000 in 401k instead of 15000 in an IRA, excluding market gains/losses.
Maybe the advisor is concerned about missing out on market gains, but there is no way in hell the market will give him 40% over the next 12 months.
Just running through the numbers:
-15000 IRA withdrawal
-IRS steals 30% (20 withholding and 10 penalty) leaving them with 10500
-Wife increases contribution by 10500, boss matches 1 for 1
So at the end of the year, client has 21000 in 401k instead of 15000 in an IRA, excluding market gains/losses.
Maybe the advisor is concerned about missing out on market gains, but there is no way in hell the market will give him 40% over the next 12 months.
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