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Subject:  Re: Thoughts on cashing in ... Date:  7/19/2018  3:29 AM
Author:  aj485 Number:  26146 of 26342

I'm 50, and have a traditional IRA valued at $210k. The problem is, I'm 50, and I've always been working towards my own boat and sailing. I'd like to invest this in a live-aboard (and this will pay for most of the boat, assuming I lose 70k)

HAHAHA - losing only $70k when cashing in a $210k IRA and you have other income besides? You are dreaming....

You don't say if you're married or single, but from the tenor of your post and not mentioning a spouse, it sounds like you're single. That means that if you have just $50k in other income, your total income will be $260k. Take off the $12k standard deduction, and that leaves $248k in taxable income. As a single person, that puts you in the 35% bracket and will be about $62.5k in taxes. Add to that the $21k in penalties for withdrawing before you're 59 1/2, and that's $83.5k in taxes - or $13.5k more than you hoped you would lose. And if you have state income taxes and penalties, there will be additional taxes. And, as you also point out - that doesn't account for the growth that you will lose.

when I leave my job 5-9 years (for which will pay the remainder and then some) be set and do this as long as I am able to.

'as long as I am able to'? That doesn't sound very promising. Considering that 'most of the boat' will cost you $210k plus whatever else you will be paying off when you leave your job, and used boats generally depreciate at a pretty good clip, you better hope you can stay on it for the rest of your life.

I really don't know how much I'll lose, but I'm sure close to 50% of that is possible.

The fact that you have no idea how much you'll lose to taxes, much less the growth shows me that this is just a dream, not a real plan.

So I'm curious to know thoughts and recommendations.

All in all, it sounds like you don't plan well, and are looking for validation of an unplanned dream. No validation from me.

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