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URL:  http://boards.fool.com/just-a-followup-to-my-previous-post-i-wanted-to-30909185.aspx

Subject:  Re: Before or after tax Dollars Date:  10/6/2013  6:03 PM
Author:  MurrayS Number:  73463 of 74759

Just a followup to my previous post, I wanted to factor in Social Security. Let's assume you take $40k in SS benefits in a year and $50k in Roth distributions. In this scenario, you would owe $0 in taxes. Great deal, eh?

The alternate scenario would be to take $40k in SS benefits and $60k out of a traditional IRA. In that case, you would owe a total tax bill of $8,500. The effective tax rate on the $60k of IRA withdrawals is 8500/60,000 = 14.2%, still a heck of a lot less than 25% deferred when taken out of your paycheck.

Tax estimates taken from: http://www.foxbusiness.com/personal-finance/tools/how-much-o...

-murray
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