No. of Recommendations: 0
John Doe appears to like paperwork. If John had a hypothetical wife named Jane who, like me, hates paperwork, I believe this is what she would recommend:

1) Keep the Traditional IRA money where it is.

2) Contribute maximum allowed to 401k for immediate tax savings, assume 15% max. contribution.

3) Open a Roth IRA in the new year and contribute $2000 annually.

In this case, John would have $79,500 of taxable income (assuming only job income & the annuity, no other sources of income).

John would still have the $20,000 tax-deferred in the Traditional IRA, would be contributing $10,500 annually into the tax-deferred 401k, and would also be contributing $2000 into the tax-benefitted Roth IRA.

And, John would only have had to fill out the paperwork to open a 401k and the Roth IRA. Much less of a headache.

Best of Luck,

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.