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|Subject: Re: Poll: 401K Roll it? Take it?||Date: 4/3/2007 10:50 PM|
|Author: ptheland||Number: 56576 of 76384|
I think we can agree that age 57 it is better to have a Roth IRA worth $30,590 vs a traditional IRA of $34,487.
No, I don't think we can agree on that.
Granted, it would only take a tax rate of about 12% to equalize the traditional and Roth IRAs with those numbers. But with small amounts of retirement income, it's not too difficult to get under - well under - that tax rate.
In 2007, a single person can have $8750 of income and pay no taxes at all. That would be on top of their social security. And the next $7825 is taxed at 10%. So that's $16,575 of income taxed at less than our target rate. For a married couple, you can double those figures.
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