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Personal Finance and Investing

ret5hd

(21,320 posts)

2. But I am already in the lowest bracket...

Reply to mobeau69 (Reply #1)

Wed Feb 3, 2021, 02:42 PM

Feb 2021

Let’s assume the tax rates/brackets stay exactly the same...I deposit $1000 in an IRA today and therefore defer the taxes on that $1000, then withdraw the $1000 five years from now and pay the taxes on the money at that point...but it is the same amount of tax on the $1000...right? Or no?

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Question about IRA's: [View all] ret5hd Feb 2021 OP

Tax rates are based on income. After you retire you will mobeau69 Feb 2021 #1

But I am already in the lowest bracket... ret5hd Feb 2021 #2

With your assumptions, yes. There's not really any benefit to an IRA as far as I know. Salviati Feb 2021 #3

"a Roth IRA might have more advantages. You'd pay taxes on the $1000 now," progree Feb 2021 #7

The money you put into a Roth IRA is post tax money. Salviati Feb 2021 #8

I know. So? progree Feb 2021 #9

Not necessarily. You could withdraw it without paying any tax at all. mobeau69 Feb 2021 #5

Hides your capital gains zipplewrath Feb 2021 #4

Having some knowledge on this gibraltar72 Feb 2021 #6

Invest in a Roth while tax rates are low nt doc03 Feb 2021 #10

Or high, or in between. When one contributes to a Roth (compared to doing nothing), one is in progree Feb 2021 #12

I am 72 and have no idea where to park my RMDs from my traditional IRA. The banks and doc03 Feb 2021 #13

I'm 69, so am also not looking at a very long time frame for compounding my money! progree Feb 2021 #15

I am in 42% equites and 58% fixed income in my IRAs and Roth. I started withdrawing from my IRAs at doc03 Feb 2021 #17

The tax-deferral advantage of traditional IRAs progree Feb 2021 #11

Thank you! Exactly the kind of info l thought may be out there. ret5hd Feb 2021 #14

If you put that $1,000 in a Roth instead: progree Feb 2021 #16

If you're in a low tax bracket, the only reason I can think of to open a traditional IRA UrbScotty Feb 2021 #18