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jcmn: "I came across an article, which I will endeavour to find again, that argued against Traditional IRA's and even 401K's(except in the case of the rapidly disappearing company matching funds)."

But did it do it well?

"The main point of the article was that the BIG assumption with T-IRAs and 401Ks, is that we will be paying LESS taxes when we retire and start withdrawing from them, therefore, saving us from paying higher taxes overall. Yet, in view of the massive debt this country has accumulated, exacerbated by the wave of bailouts and budget deficits recently seen, can we realistically expect to pay less taxes in the future on a lump on money we have accumulated with taxes deffered on it? Many people, myself included expect to have to work to make ends meet during retriement. It is hard to see how taxes will go down in the future for anyone. Isn't it better to pay the taxes now on your retirement monies and watch it grow knowing that it will be all yours?"

But did the article note that if a consumption tax is passed (see e.g., FairTax) or a value added tax (and abolition of the federal income tax, as George Will recently editorialized) passes, then you will have paid income tax on the conversaion and will still pay the replacement tax when spent?

"For my part, I did it last late year. My gross income was a mere 27K, the net sum of my IRA+401k was just 13K after the 30%+ beatting they took in 2009. I also got married that year and expect to have significant medical expense deductions for insurance premiums and expenses and job seeking expenses. I'm only 43 so I've go a ways to go before MRDs and all that, but I wanted to see what others thought of this...If you have the article I'm refering to, please link it."

Did you pay the taxes with funds outside the the IRA? If not, then addition to the taxes generally due, you also paid 10% penalty for early withdrawal of the funds to pay the tax (unless over 59 1/2).

Application of the cliche "a bird in hand is better than two in the bush" would suggest taking current deductions.

If you read this board frequently, you will have noted that none of the regulars claim a clear crystal ball regarding future taxes (other than that they will change in some fashion) and often suggest multiple accounts with different tax obligations in order to maximize future flexibility.

Regards, JAFO
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