There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.