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Subject:  Roth IRA Date:  1/10/2001  5:29 PM
Author:  numike Number:  6012 of 19741

Pixy helped me out so I thought that I would post my email for all to see :-( .

"I was under the impression that we do not pay income tax on the earnings of a Roth IRA once we are 59 1/2 and over. Your most recent Fools & Retirement did not seem to take that into consideration. Did I miss something?"

Yes I did! a little math...

"" That's correct, and the tables in the piece were computed that way. Taxes on the Roth are paid at the time of conversion only.

As an example, in the first table, and after conversion, $41,677 is left in the Roth earning 9% per year. In five years, that grows to $64,110 as the
table shows under the 15% column. It all may be taken free of tax. If left in the traditional IRA, the entire $50K grows to $76,931. Taxed at 15%, that leaves a net of $65,392 after taxes as shown in the table.

Regards..Pixy ""