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Subject:  Re: Roth IRA's (cont.) Date:  1/31/1998  2:00 AM
Author:  xtraFool Number:  1549 of 88775

<< That's a generality that will get too many folks into trouble. Surprisingly, many folks will stay in the same tax bracket they are in right now (i.e., 28% where most taxpayers are today). >>

ack........ i have a long long long way to go to reach a tax rate of 28%, where most taxpayers are today??? i can only hope to reach the kind of agi, let alone taxable income. :(

anyway, looked a some quick numbers from the 1997 tax schedules.......... single taxable income of $124,650 will results in a 27% tax rate, $24,650 is the maximum for 15%. for married filing jointly, a income of $151,750 results in a 26% tax rate and $41,200 for 15%. so in both of these cases you would have to drop your income by over $100,000, or over 70% to fall into the 15% tax bracket. you would need a severe lifestyle change to be able to handle this loss of income. not the kind of retirement i would look forward to. a better plan would be to try and remain near the same tax rate. those marginal tax brackets are deceiving.

btw, the smartmoney interactive site has a quick IRA calculator to compare Roth, tax-deductible and nondeductible IRA's. it takes into account investing the tax savings each year for the tax-deductible IRA and taxes those returns annually as income.

searching for foolishness,

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