Date: Fri, 3 Feb 2006 16:02:07 -0600
From: "Ron Peterson" 
Newsgroups: misc.invest.financial-plan
Subject: Re: Wisdom of Retirement planning with 401ks and IRAs
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Dave Dodson wrote:
> Will Trice wrote:
> >But given that you don't pay taxes upon withdrawal from a Roth, is it better
> >to save the Roth for later in retirement?

> Not necessarily. I started collecting Social Security last year. If
> your taxable income plus your tax-free bond income plus half of your
> Social Security exceeds $24,000 for a single filer or $32,000 for a
> married couple filing jointly, then an additional dollar of taxable
> income plus tax-free bond income exposes either $0.50 or $0.85 of your
> Social Security benefits to income taxation. This effectively
> multiplies your marginal tax rates by 1.5 or 1.85 on each additional
> dollar of IRA distributions you take. Distributions from ordinary IRAs
> affect the amount of Social Security that is subject to federal income
> tax, but distributions from Roth IRAs don't. Therefore, I take as much
> from my ordinary IRA as I can without subjecting any of my Social
> Security benefits to taxation, and then top out the income I need from
> my Roth.

Why not liquidate some of your bonds instead?

-- 
   Ron