Roth IRA

[(former)FormerSanDiegan]

[quote=waiting for bottom]Starting in 2010, everyone is basically eligible for the Roth. You have to contribute to a traditional, but can transfer to Roth at any time.[/quote]

Sort of…

While you can convert traditional IRA contributions to a ROTH with no income limits you will have to pay taxes if you have other existing IRAs. The conversion from a traditional to a Roth requires that you consider ALL of your IRAs in computing any tax that might be due.

So, if you have 95K in a rollover IRA for example and you want to contribute $5K to a traditional IRA in 2010 and convert to a ROTH, you pay tax on 95% of your conversion.

This is not exactly the same as being eligible to contribute to a Roth.

[edna_mode]

Soooo…does anyone else here think that retirement accounts (especially the Roth), which have very well documented custodian agreements, i.e. all transactions are reported to the IRS — would represent an convenient logistical opportunity to tax upon disbursement?

Yes, you paid taxes upon converting to the Roth…on the promise (cross my heart!) that the government would NOT tax it again upon disbursement. Decades from now. Under a different administration. And a different Congress. That’s about like expecting, I dunno, Social Security to pay for me 30 years from now?

I’m considering that there are substantial voting demographics who are not incentivized to contribute (high tax bracket, pension-plan workers) who might be swayed by a demogogue railing against the “tax haven” that Roths represent.

After all, I got taxed when I earned my income…and then taxed again when I spend it (on most things)…there’s certainly precedent for tax-favored treatments to change over time (cc and student interest used to be tax deductible). I mitigated this taxation risk by not keeping all my retirement funds in a Roth, but some as a “regular” IRA or 401k, and some to not put in at all.

My overall point is that in this investing environment, an enormous hidden risk is not knowing what regulatory, taxation and judicial (think of whether or not courts will uphold the right of MERS to foreclose — what does that mean for the value of holding a mortgage-backed security in one’s portfolio if it’s not liquid?) responses are likely to be for any given form of investment. And those can easily wipe out any comparative advantage of any particular class of asset.

[edna_mode]

Soooo…does anyone else here think that retirement accounts (especially the Roth), which have very well documented custodian agreements, i.e. all transactions are reported to the IRS — would represent an convenient logistical opportunity to tax upon disbursement?

Yes, you paid taxes upon converting to the Roth…on the promise (cross my heart!) that the government would NOT tax it again upon disbursement. Decades from now. Under a different administration. And a different Congress. That’s about like expecting, I dunno, Social Security to pay for me 30 years from now?

I’m considering that there are substantial voting demographics who are not incentivized to contribute (high tax bracket, pension-plan workers) who might be swayed by a demogogue railing against the “tax haven” that Roths represent.

After all, I got taxed when I earned my income…and then taxed again when I spend it (on most things)…there’s certainly precedent for tax-favored treatments to change over time (cc and student interest used to be tax deductible). I mitigated this taxation risk by not keeping all my retirement funds in a Roth, but some as a “regular” IRA or 401k, and some to not put in at all.

My overall point is that in this investing environment, an enormous hidden risk is not knowing what regulatory, taxation and judicial (think of whether or not courts will uphold the right of MERS to foreclose — what does that mean for the value of holding a mortgage-backed security in one’s portfolio if it’s not liquid?) responses are likely to be for any given form of investment. And those can easily wipe out any comparative advantage of any particular class of asset.

[edna_mode]

Soooo…does anyone else here think that retirement accounts (especially the Roth), which have very well documented custodian agreements, i.e. all transactions are reported to the IRS — would represent an convenient logistical opportunity to tax upon disbursement?

Yes, you paid taxes upon converting to the Roth…on the promise (cross my heart!) that the government would NOT tax it again upon disbursement. Decades from now. Under a different administration. And a different Congress. That’s about like expecting, I dunno, Social Security to pay for me 30 years from now?

I’m considering that there are substantial voting demographics who are not incentivized to contribute (high tax bracket, pension-plan workers) who might be swayed by a demogogue railing against the “tax haven” that Roths represent.

After all, I got taxed when I earned my income…and then taxed again when I spend it (on most things)…there’s certainly precedent for tax-favored treatments to change over time (cc and student interest used to be tax deductible). I mitigated this taxation risk by not keeping all my retirement funds in a Roth, but some as a “regular” IRA or 401k, and some to not put in at all.

My overall point is that in this investing environment, an enormous hidden risk is not knowing what regulatory, taxation and judicial (think of whether or not courts will uphold the right of MERS to foreclose — what does that mean for the value of holding a mortgage-backed security in one’s portfolio if it’s not liquid?) responses are likely to be for any given form of investment. And those can easily wipe out any comparative advantage of any particular class of asset.

[edna_mode]

Soooo…does anyone else here think that retirement accounts (especially the Roth), which have very well documented custodian agreements, i.e. all transactions are reported to the IRS — would represent an convenient logistical opportunity to tax upon disbursement?

Yes, you paid taxes upon converting to the Roth…on the promise (cross my heart!) that the government would NOT tax it again upon disbursement. Decades from now. Under a different administration. And a different Congress. That’s about like expecting, I dunno, Social Security to pay for me 30 years from now?

I’m considering that there are substantial voting demographics who are not incentivized to contribute (high tax bracket, pension-plan workers) who might be swayed by a demogogue railing against the “tax haven” that Roths represent.

After all, I got taxed when I earned my income…and then taxed again when I spend it (on most things)…there’s certainly precedent for tax-favored treatments to change over time (cc and student interest used to be tax deductible). I mitigated this taxation risk by not keeping all my retirement funds in a Roth, but some as a “regular” IRA or 401k, and some to not put in at all.

My overall point is that in this investing environment, an enormous hidden risk is not knowing what regulatory, taxation and judicial (think of whether or not courts will uphold the right of MERS to foreclose — what does that mean for the value of holding a mortgage-backed security in one’s portfolio if it’s not liquid?) responses are likely to be for any given form of investment. And those can easily wipe out any comparative advantage of any particular class of asset.

[edna_mode]

Soooo…does anyone else here think that retirement accounts (especially the Roth), which have very well documented custodian agreements, i.e. all transactions are reported to the IRS — would represent an convenient logistical opportunity to tax upon disbursement?

Yes, you paid taxes upon converting to the Roth…on the promise (cross my heart!) that the government would NOT tax it again upon disbursement. Decades from now. Under a different administration. And a different Congress. That’s about like expecting, I dunno, Social Security to pay for me 30 years from now?

I’m considering that there are substantial voting demographics who are not incentivized to contribute (high tax bracket, pension-plan workers) who might be swayed by a demogogue railing against the “tax haven” that Roths represent.

After all, I got taxed when I earned my income…and then taxed again when I spend it (on most things)…there’s certainly precedent for tax-favored treatments to change over time (cc and student interest used to be tax deductible). I mitigated this taxation risk by not keeping all my retirement funds in a Roth, but some as a “regular” IRA or 401k, and some to not put in at all.

My overall point is that in this investing environment, an enormous hidden risk is not knowing what regulatory, taxation and judicial (think of whether or not courts will uphold the right of MERS to foreclose — what does that mean for the value of holding a mortgage-backed security in one’s portfolio if it’s not liquid?) responses are likely to be for any given form of investment. And those can easily wipe out any comparative advantage of any particular class of asset.

[waiting for bottom]

Not sort of. Yes. Convert the 95K too.

[waiting for bottom]

Not sort of. Yes. Convert the 95K too.

[waiting for bottom]

Not sort of. Yes. Convert the 95K too.

[waiting for bottom]

Not sort of. Yes. Convert the 95K too.

[waiting for bottom]

Not sort of. Yes. Convert the 95K too.

[waiting for bottom]

Yes Edna, the gov’t will probably tax Roth distributions in the future. Sad but true.

[waiting for bottom]

Yes Edna, the gov’t will probably tax Roth distributions in the future. Sad but true.

[waiting for bottom]

Yes Edna, the gov’t will probably tax Roth distributions in the future. Sad but true.

[waiting for bottom]

Yes Edna, the gov’t will probably tax Roth distributions in the future. Sad but true.

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