No. of Recommendations: 8
One aspect about an IRA that I love is that you can earn as much as you are lucky enough (or smart enough) to earn in there, and pay NO capital gains on any of it. After age 59-1/2, all you pay is normal taxes on what you withdraw. Pretty good deal - no?

Actually, no.

Converting capital gains into ordinary income is generally not a good idea. Capital gains get taxed at preferential tax rates.

The benefit from an IRA is the deferral of taxation from your high earnings years - which are typically your higher tax rate years - to lower earnings, and lower tax rate, years.

And that appears to be the benefit you are enjoying. You put money into your IRAs when you were working, and now in retirement you are withdrawing that IRA money with little or no taxes. Well done!

--Peter
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