02-15-2014, 09:02 AM
Traditional IRAs for both my wife and I. We're both self-employed and the tax reduction helps especially since we pay both employer and employee portions of Social Security and Medicare taxes.
I'm thinking of transferring a little at a time into a Roth just because of the no RMD requirement when the extra cash for the taxes are available. According to my calculations, dividend income will not cover the RMD and I don't want to have to sell my capital just to make the RMD. Recharacterization can be done with in-kind transfers but it's going to be more of a hassle picking in choosing at the time. Plus, everything that comes of out the Roth will be tax free.
I'm thinking of transferring a little at a time into a Roth just because of the no RMD requirement when the extra cash for the taxes are available. According to my calculations, dividend income will not cover the RMD and I don't want to have to sell my capital just to make the RMD. Recharacterization can be done with in-kind transfers but it's going to be more of a hassle picking in choosing at the time. Plus, everything that comes of out the Roth will be tax free.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan