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|Subject: Re: Diff between 401K,regular IRA, brokerage acc||Date: 4/1/2008 10:05 AM|
|Author: dond261||Number: 62086 of 81569|
A couple of additional points on Roth IRA's & Traditional IRA's:
After the 5 year and 59 1/2 limits are reached, withdrawals are tax free from Roth's. Traditional IRA withdrawals(after 59 1/2) are taxed as ordinary income at the then current tax rate.
Traditional IRA has minimum required distributions after 70 1/2. Roth's have no required minimum distributions.
Any part or all of a Traditional IRA can be converted to Roth status without penalty at any age. Any converted amounted is taxed as ordinary income at the time of conversion.
I have set up my retirement accounts so I can withdraw part from traditional and part from Roth to keep in a lower tax bracket during retirement. Having both Roth and Traditional IRA's keeps the minimum required distribution down also.
Again refer to IRS Pub 590
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