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Subject:  Re: IRA for post 65 yr olds Date:  12/6/2010  11:42 AM
Author:  Watty56 Number:  67794 of 96125

Moving to a taxable account is wrong on so many levels it is hard to know where to start.

A few points not mentioned so far;

A huge advantage of either the traditional IRA or the Roth is that you get to defer the taxes until you actually withdraw it. This means that if you sell stock "A" to buy stock "B" in one of these account that you don't have to pay any taxes then. Eventually you might sell stock "B" to buy "C", then sell it to buy "D" and so on. If you will be doing this a lot then the tax deferral would eventually be worth more than getting the lower tax rate on future sales.

You also have to look at your future tax rates to see what the best deal choice is. Many people find that as they are retired longer that either they spend down their money and end up in a lower tax bracket, or they have a pension that is not inflation adjusted so it becomes worth less and puts them into a lower tax bracket. With the standard deduction, exemptions, and the low tax rate on the first chunk of taxable income, you really want to have around $40K or so in taxable income(possibly more if you are married) to take advantage of these low rate on the first part of you income each year.

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