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Subject:  Re: Backdoor Roth IRA - Anything need to know? Date:  2/2/2013  7:38 AM
Author:  2gifts Number:  71332 of 96162

if someone wants to retire before 59 1/2, when the Roth becomes fully distributable, one would have to bridge the gap between the age of retirement and age 59 1/2. So, a regular brokerage account will likely be one of the best vehicles to bridge the gap.

Maybe it's just that I tend to be conservative around my financial planning, but I have never considered the amount you can put into an IRA (Traditional or Roth) or 401k to be sufficient to fund retirement, and so have always also saved in a taxable brokerage account as well.

This has done a couple of things. It has given me the flexibility to do whatever I want with the money such as funding the kids' college, although I was also saving for that, or have money available to buy our retirement home, which we are looking for now, or even just pay for a child's wedding at some point which is probably sooner than I would like, but they are getting to be that age. It has let me save quite a bit more than what is allowed in the "retirement" accounts so that I can have more income in my retirement, which I calculate that I need anyhow if I want to maintain our current standard of living. And it has allowed me to be able to retire at the point I want which may or may not be when I can start taking money out of a retirement account, so age has been removed from my planning.

I'm sure there are other advantages, but these are the ones that were driving me with the flexibility being the top reason and the ability to save as much as I want coming in a close second.

I think people get hung up on thinking retirement money has to be in an account that is labelled as such, but that really just has to do with some tax advantages, and those can be outweighed by other factors or just secondary to other factors, depending on each person's particular situation.
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