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Future Roth IRA Q?

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    Future Roth IRA Q?

    I have an interesting situation here that I'm not quite sure how to deal with. I will be retiring in about 5 to 8 years at age 53 to 56. I have a Roth IRA that I established several years ago as a supplement to my main retirement plan. I have about 40k in it currently and expect it to grow a bit by the time I am retired.

    I likely will not need this money at retirement or for many years down the road. I know the withdrawl age for these plans is 59 1/2. This leaves me with a large window between retirement and being able to withdraw this money. As stated, I won't need this money at retirement. My question to those who are in a similar situation or have knowledge in these matters is, What should/can I do with this account once I'm retired?

    I would like to try to grow this somewhat after I retire as it will not be needed to live on for quite a while. What's the correct course to take here?
    "Those who can't remember the past are condemmed to repeat it".- George Santayana.

    #2
    If as you said you do not need to use the funds in retirement, then just keep the money in the Roth and let it continue to grow. With a Roth, you are not required to take money out of it at all, so just let it grow until you need to take money out. A Traditional IRA is the one where you have to take money out at least by age 70 1/2, but you are allowed to take it out at 59 1/2 without penalty.

    The age 59 1/2 rule for a Roth that you mentioned is the age you could take all money out of a Roth without penalty (note that regardless of when you take your prior contributions out, they wouldn't be subject to tax or penalty). This rule just helps you avoid any tax or penalty on earnings within the account. But again, once you are passed 59 1/2, you don't have to start take money out of the Roth.

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      #3
      I'd let it keep growing until you need it. Once you decide to tap it shift your investments into something that will throw a monthly dividend. You can take a tax free monthly draw from it to supplement your income without having to touch the principal.
      Brian

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        #4
        As I understand it, contributions (currently 6k) can be made into these accounts in retirement. Is there a possibilty and/or advantage to doing any kind of conversion (in retirement) or is keeping it in a roth the best strategy?
        "Those who can't remember the past are condemmed to repeat it".- George Santayana.

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          #5
          As the others have said, just keep it invested. The great thing about Roths is that there is no required withdrawal. You can leave the money in there until you die and then have it pass to your heirs if you wish. In the meantime, it continues to grow tax free and if you do need money at any point, you get to take it out tax free.
          Steve

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            #6
            Originally posted by GREENBACK View Post
            What should/can I do with this account once I'm retired?
            Not only should you let it keep growing if you don't need it, if your income will be low enough in those years (like 15% bracket type), I'd really consider converting other 401k/IRA type assets into it, a little each year. At some point, you'll have to take the money out of the 401k, may as well convert into a low bracket. But don't convert too much, or it will start being taxed at a higher rate.

            Where will your income come from once you retire?

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              #7
              Originally posted by jpg7n16 View Post
              Where will your income come from once you retire?
              My income will be from my pension and 457. Combined, I should have plenty of income. I should be in the 25% bracket or whatever the equivalent is at that time. I started the roth to put extra retirement investment income to use. It has grown quite a bit in the last few years which is why I'm beginning to look at the future of it.

              I'm looking at possibly becoming a little more aggressive with it as well. I'm probably overthinking it but I'm curious about what to do or what I can do with money sitting there for possibly many years. It's sounding more like the roth is the way to go.
              "Those who can't remember the past are condemmed to repeat it".- George Santayana.

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