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Subject:  Re: Roth 401(k) & Roth IRA Date:  1/11/2011  9:38 PM
Author:  MurrayS Number:  68210 of 88541

The chances, however, that taxes will be the same in the future as they are currently are somewhere between slim and none.

It is also highly dependent on your current marginal tax rate that you are deferring and where you expect to get income during retirement.

For example, my marginal tax rate is currently 28% or 33% and I expect to take distributions from my IRAs and other investments for several years prior to taking social security. Assuming no other income and the current tiered tax system, that means that I will pay 0, 10 & 15% on large chunks of my withdrawals.

If (big IF) tax rates don't change, I don't anticipate ever paying 33% on my withdrawals unless my investment do very well and RMDs kick me over the limit. If that happens, I will be very pleased ;)

I wholeheartedly agree that having savings in different vehicles (Roth & traditional) is a good thing which you are already doing. This allows you more freedom in managing your taxes in retirement. I do believe Roths are oversold as saving large amounts of taxes over traditional IRAs when, in fact, many retirees have little to no income and therefore could withdraw from traditional IRAs at very low tax rates.

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