No. of Recommendations: 0
BGP,

Thanks for the clarifications in my post.

I would like to point out that while you are absolutely correct that it's very important to take into account that capital gains taxes are only on the gains, if you're investing over the long term, it is likely that a majority of your investment will be composed of gains. I agree that detailed calculations specific to an individual's circumstances would have to be made to determine what kind of investment would be best.

Also, while it is important and necessary to know about the possibility of taking qualified distributions from a 401k when you turn 55, I was making the assumption that retirement would take place before that time (although JMG did say that retirement might be as late as age 55).

Another possible thing to consider that I don't think either of us has mentioned is that if you invest in a Roth, the contributions can be withdrawn without taxes or penalties at any time... Therefore, it may be possible to completely or substantially fund a few years of retirement with only the contributions to a Roth. Assuming 25 years of contributions, that would be $50,000, which might get you by for a year. But if the contribution limit is changed, which seems likely to happen, then your contributions could be almost 5 times that amount, and may be able to last more like 5 years.
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement