UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: 4play Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: Taxes on IRA withdrawals Date: 10/25/1997 10:16 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Scott, any money in an IRA will remain tax free, (Including dividends and all capital gains) until the day that you withdraw the funds. On that day you will pay taxes at your ordinary income tax rate on all profits. If you put your money into a non IRA account you must pay your taxes on all income, (dividends, capital gains, etc.) in the year in which they occur. This would in effect lower the value of those accounts by the amount of your tax bill assuming that you are withdrawing the money to pay your taxes. You could pay the taxes out of your pocket, but that would reduce your liquid spending money accordingly. Also as your investment grows your additional tax liability could well be into the tens or even hundreds of thousands of dollars.Your investment decisions on which account to place your money in should be made taking all factors into consideration, including what your tax bracket will be at retirement. As a general rule a regular IRA will probably only benefit you if you will be in a lower tax bracket at retirement. I plan on being in the highest bracket and not even blinking an eye at tax time. Good luck
John
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
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.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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 "#1 Media Company to Work For" (BusinessInsider 2011)! 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