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Subject:  Re: Roth vs SS Date:  3/30/1998  11:01 AM
Author:  TMFPixy Number:  2506 of 98940

Greetings, Joe Varga, and welcome.

<<Does anyone know whether when the time comes to make tax free withdrawals from your Roth IRA (after 59.5 yrs etc), the Roth gains will be added back into your taxable income when determining the taxable portion of Social Security benefits. As it stands now all pensions, tax free bonds, regular (deductible ) IRA amounts are added back for the social security calculation. It seems inevitable that that will be the case for gains on Roth IRAs as well and if that is the case, then Roth IRAs will be taxed after all (via the SS calculation). And it adds another level of complexity to the Roth vs non-Roth question.>>

I don't know for sure how it will be brought back in, but it almost certainly will be because the earnings will be unearned income. The IRS will have to develop some formula to separate the return of contributions (already taxed) from a withdrawal of earnings (untaxed and "unearned"). And, yes, it is another consideration albeit IMHO a minor one.


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