More IRA Questions - This is an area of taxation that has become increasingly complicated with new types of IRAs and new rules for eligibility and amounts. It will get much worse over the next few decades as the rules change even more and people become completely confused over how much of their withdrawals qualify for tax free status. Keeping track of the cost basis is the weak link in most retirement plans.

I am also still skeptical enough of our rulers in DC to not trust them to honor their promise to allow completely tax free withdrawals from Roth IRAs. I would even be willing to bet money that they will pull the same scam as they did on Social Security recipients and tax people who they consider to be evil rich. As another reminder, our rulers in DC still define the evil rich as single persons earning over $25,000 per year and married couples earning over $32,000 per year; so it's not just people like Bill Gates who be cheated out of their tax free Roth IRAs. That is why I'm not a big advocate of choosing Roth IRAs over conventional deductible ones. Forgoing a current deduction for some promised tax break decades down the road is a fool's bet. This is especialy true for kids and younger people who often have 50 or more years before retirement.




Taxing Times for Three Stooges - Good analogy of taxation philosophy by Neil Cavuto. Comparing our rulers to the Three Stooges is right on the money.


- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 2/03/2004 09:24:00 AM Send this post: