Since a Roth IRA doesn't force you to ever take out money, you can dip into this last. If, however, you look to be in an abnormally high bracket for the year - say, because you took a job - you may want to withdraw from your Roth IRA first.
A Roth IRA can be a nice way of giving you more flexibility in managing your income in retirement. If, for example, withdrawals from a 401(k) combined with Social Security and other income are about to push you into a higher tax bracket in a given year, you can always dip into your Roth.
It's also important to remember that your Roth IRA can be a great means of harvesting tax losses. By selling an investment which you've lost money on and applying that loss against future capital gains, you are, in effect, reducing your tax bill.
Ready for the Roth IRA | Shawn Larsen, 47, has spent his career as a seismologist. Now he's thinking about biking and backpacking. Here's how he's saving to reach his goals. (more) Before you even think of leaving your job, be sure your family is covered. (more) Otis Braswell, 50, retired five years ago and cherishes the extra family time. But he's also learned an important lesson - golf isn't as much fun when all your friends are working. (more) |
