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I'm 36 and concerned about excess distributions penalties when I start withdrawing money from my 403(b). My forecast distribution if I start taking money out at age 59 1/2, with a 10.5% return on a pure-stock portfolio, is well over $150k per year even if indexed for 3% inflation. What little there is about the Roth seems to say that the profits on any money moved into a Roth will not count toward the excess distributions threshold. Does anyone know yet if this is correct? I know I have to change jobs to move money to the Roth, but that is already part of my plans. Any other suggestions for reducing this penalty, besides investing poorly?
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