Roth IRA vs Traditional

[PatentGuy]

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.

[bob2007]

PatentGuy

I’ve heard a few people say the same thing and its an interesting idea. Have you looked into that enough to compare all the taxes, like property tax, and does it still come out to be a significant (3% or more) advantage?

From another perspective, why not relocate now? That way a person would have time to make friends and know the area, rather than hitting it at retirement, plus you wouldn’t be paying the state tax now. Only asking because I’ve considered this myself.

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Submitted by PatentGuy on April 24, 2010 – 5:49pm.

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.

[bob2007]

PatentGuy

I’ve heard a few people say the same thing and its an interesting idea. Have you looked into that enough to compare all the taxes, like property tax, and does it still come out to be a significant (3% or more) advantage?

From another perspective, why not relocate now? That way a person would have time to make friends and know the area, rather than hitting it at retirement, plus you wouldn’t be paying the state tax now. Only asking because I’ve considered this myself.

=============================
Submitted by PatentGuy on April 24, 2010 – 5:49pm.

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.

[bob2007]

PatentGuy

I’ve heard a few people say the same thing and its an interesting idea. Have you looked into that enough to compare all the taxes, like property tax, and does it still come out to be a significant (3% or more) advantage?

From another perspective, why not relocate now? That way a person would have time to make friends and know the area, rather than hitting it at retirement, plus you wouldn’t be paying the state tax now. Only asking because I’ve considered this myself.

=============================
Submitted by PatentGuy on April 24, 2010 – 5:49pm.

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.

[bob2007]

PatentGuy

I’ve heard a few people say the same thing and its an interesting idea. Have you looked into that enough to compare all the taxes, like property tax, and does it still come out to be a significant (3% or more) advantage?

From another perspective, why not relocate now? That way a person would have time to make friends and know the area, rather than hitting it at retirement, plus you wouldn’t be paying the state tax now. Only asking because I’ve considered this myself.

=============================
Submitted by PatentGuy on April 24, 2010 – 5:49pm.

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.

[bob2007]

PatentGuy

I’ve heard a few people say the same thing and its an interesting idea. Have you looked into that enough to compare all the taxes, like property tax, and does it still come out to be a significant (3% or more) advantage?

From another perspective, why not relocate now? That way a person would have time to make friends and know the area, rather than hitting it at retirement, plus you wouldn’t be paying the state tax now. Only asking because I’ve considered this myself.

=============================
Submitted by PatentGuy on April 24, 2010 – 5:49pm.

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.

[bob2007]

I’m new to state tax burden research, but found some information from the Tax Foundation that compares what they call the total tax burden rate of a state, which includes state income tax, property tax, sales tax, gas tax, etc.

http://www.taxfoundation.org/taxdata/show/335.html

California is 6 at 10.5%, New Hampshire is 46 at 7.6%. So the spread is 2.9%. So taking a lump sum of money would be subject to the income tax, so that could be 10% vs 0, but from this data it looks like living in a 0 income tax state isn’t as big a reduction as I thought it would be. Definitely interested in other comments or experience.

[bob2007]

I’m new to state tax burden research, but found some information from the Tax Foundation that compares what they call the total tax burden rate of a state, which includes state income tax, property tax, sales tax, gas tax, etc.

http://www.taxfoundation.org/taxdata/show/335.html

California is 6 at 10.5%, New Hampshire is 46 at 7.6%. So the spread is 2.9%. So taking a lump sum of money would be subject to the income tax, so that could be 10% vs 0, but from this data it looks like living in a 0 income tax state isn’t as big a reduction as I thought it would be. Definitely interested in other comments or experience.

[bob2007]

I’m new to state tax burden research, but found some information from the Tax Foundation that compares what they call the total tax burden rate of a state, which includes state income tax, property tax, sales tax, gas tax, etc.

http://www.taxfoundation.org/taxdata/show/335.html

California is 6 at 10.5%, New Hampshire is 46 at 7.6%. So the spread is 2.9%. So taking a lump sum of money would be subject to the income tax, so that could be 10% vs 0, but from this data it looks like living in a 0 income tax state isn’t as big a reduction as I thought it would be. Definitely interested in other comments or experience.

[bob2007]

I’m new to state tax burden research, but found some information from the Tax Foundation that compares what they call the total tax burden rate of a state, which includes state income tax, property tax, sales tax, gas tax, etc.

http://www.taxfoundation.org/taxdata/show/335.html

California is 6 at 10.5%, New Hampshire is 46 at 7.6%. So the spread is 2.9%. So taking a lump sum of money would be subject to the income tax, so that could be 10% vs 0, but from this data it looks like living in a 0 income tax state isn’t as big a reduction as I thought it would be. Definitely interested in other comments or experience.

[bob2007]

I’m new to state tax burden research, but found some information from the Tax Foundation that compares what they call the total tax burden rate of a state, which includes state income tax, property tax, sales tax, gas tax, etc.

http://www.taxfoundation.org/taxdata/show/335.html

California is 6 at 10.5%, New Hampshire is 46 at 7.6%. So the spread is 2.9%. So taking a lump sum of money would be subject to the income tax, so that could be 10% vs 0, but from this data it looks like living in a 0 income tax state isn’t as big a reduction as I thought it would be. Definitely interested in other comments or experience.

[Raybyrnes]

bob2007

Higher income earners are not eligible for the traditional IRA. But yes if I am Kobe Bryant for example I will make more while working and probably less later on on life. Again I think the cut off is around 70 K

[Raybyrnes]

bob2007

Higher income earners are not eligible for the traditional IRA. But yes if I am Kobe Bryant for example I will make more while working and probably less later on on life. Again I think the cut off is around 70 K

[Raybyrnes]

bob2007

Higher income earners are not eligible for the traditional IRA. But yes if I am Kobe Bryant for example I will make more while working and probably less later on on life. Again I think the cut off is around 70 K

[Raybyrnes]

bob2007

Higher income earners are not eligible for the traditional IRA. But yes if I am Kobe Bryant for example I will make more while working and probably less later on on life. Again I think the cut off is around 70 K

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