Congress Is Coming for Your IRA

The Wall Street Journal ^ | July 9, 2019 7:06 pm ET | By Philip DeMuth

[Rurudyne]

Remember, the advantage is relative to Congress up and deciding to take the money.

With a traditional IRA they can decide it was improper in the first place to have not taxed the principal,which the greedy bastards will be able to fix ... with penalties and interest on the principal not taxed and the interest earned too, presumably..

But with a Roth they’re left with trying to collect penalties and interest on the interest earned.

[sparklite2]

Given the likelihood of their doing that,
I’d say paying money up front is a
losing bet.

[Rurudyne]

So you’re betting against Congress being full of greedy social justice scum desperate for more cash to piss off at some point when they’ve already pissed away other easy to grab sources?

[Political Junkie Too]

in retirement, you will be in a much lower income bracket with a very real possibility of not paying income tax on your draw-down at all. I just don’t get it.

That was the expectation when 401(k)s and IRAs were set up. However, many people (like me) will retire with enough savings to maintain the current working lifestyle.

For people like me, I will remain in the same tax bracket that I've always been in.

Roth IRAs are a bet against future tax increases. When converting pre-tax savings to Roth IRAs, one pays ordinary income tax on the amount converted at current rates, and then the appreciation is tax free when withdrawn.

Also, paying the taxes today to convert to Roth IRAs will reduce the amount of pre-tax savings that will be subject required minimum distributions (RMDs) at age 70 1/2.

Right now, the Trump tax cuts are schedule to expire in 2025. Taxes are "cheap" right now. Converting to Roth IRAs at today's rate assumes that the rates will be higher when the funds would otherwise be withdrawn from traditional IRAs. In fact, the current tax rates may be lower than the rates were when the money was saved.

-PJ

[sparklite2]

The amount of invective in your reply is an indication
of the emotion level, and suggests you might need
to bank the fires of your premises. Just sayin’.

[Rurudyne]

No, that’s just how I refer the the Left on a good day. In particular those for whom there remains nothing of the old far Left that’s too far Left for them, who see folks who were McGovernites and are unrepentant Alinskyites as right of center,

They are the enemy. Plain and simple. Lovers of Arbitrary government who undermine what remains of governance by constitutional means like it was their passion. They deserve to be steamrollered by some proverbial HUAC.

Then there’s the even worse to flatly insane intersectional crowd.

The great pity is that McCarthy was such a grandstanding clown because had he been a milder man with an even temper a lot more harm could have been done to the then far Left than was done and benefitted the country immensely.