quote:
Because you are going to want to eat up the fund that you will have to pay taxes on one way or another to spare the one that is tax free. I don't see how you consider killing your tax free growth to be "tax efficient."

I obviously don't have a good grip on retirement taxes but I wanna say 'seriously' to this?

Let's say I have an equal amount in my Roth which is withdrawn tax free and my 401k which is withdrawn with taxes. At 59.5 it seems best to withdraw entirely from my Roth and not touch my 401k to delay paying taxes. Why pay taxes at 59 when I can wait to pay them at say 70? Then if I pass away and pass it on my kids can delay the taxes additionally?

The benefit of a tax free account is not paying taxes, if I never put that to use then there is no inherent benefit at all.

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Posted by Teddy Ruxpin

Member since Oct 2006

39646 posts

Posted on 5/27/16 at 8:40 am to baldona

Someone stop me if I'm stupid.

Volvagia's argument is to take 401k first because you've already received the benefit by lowering your present day taxes, so keeping it in longer doesn't bestow any more benefits.

Your Roth money has already been taxed, it's benefit is the non taxing of gains, which are received as long as it stays in the account, therefore, it should stay in longer.

As for, "not getting the benefit at all" well you do receive a benefit if you die with money in your ROTH, that is, that money has grown more to be inherited by your heirs if you're into that sort of thing I suppose. But either way what benefit would you receive if the opposite were true? You're fricking dead.

This post was edited on 5/27/16 at 8:45 am

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