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Author: cfdunton One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Re: 401k...IRA? Date: 2/20/2001 1:58 PM
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You can get "killed by taxes" because of the Minimum Distributions you must take starting at age 70 1/2. We are in relatively modest circumstances with just his social security, a small pension and interest income. I have a few years before the MRDs kick in but my husband has only 2 and now I'm scrambling to move money into Roth IRAs to minimize the future tax bite and keep today's taxes at lowest possible rate. Part of the problem is that we won't need the MRDs to live on so the distributions will have to go into taxable accounts that will add interest/dividend income. And assuming that the 401k is growing at even a modest rate each year, the MRDs get larger each year since you have a shorter life expectancy.

Of course everyone's situation is different so what works for us is not necessarily the best for you but I would vote for maximum Roth contribution and whatever you can afford in your 401k.

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