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Subject:  Re: Roth IRA Vs. 401k Date:  3/9/2007  1:27 PM
Author:  gubydala Number:  56181 of 87662


IIRC one thing you didn't consider in your post is this: What if you need a large lump sum for some purpose? If you take the money out of the 401k because that's all you have, you'll push yourself into a higher tax bracket. If on the other hand you keep the regular 401k withdrawals low and use the Roth for spikes like medical bills and so forth the calculations could work out very differently. Even just the comfort of knowing you won't throw yourself into a more complex tax scenario if you have a big expense could be worth something.

Or what if you're in a situation where you want to stay at the same company and work part-time? Maybe taking Roth money to pay off the house would make that possible. I don't think you can withdraw from a 401k until you leave the company.

If you're just looking at the 4% withdrawal then maybe the 401k wins. But life isn't always that simple and IMO it's good to have money in a lot of different pots.


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