Comments on: 5 Things You Need to Know About The Traditional IRA 2013

By: Jeff Rose

Jeff Rose — Mon, 29 Apr 2013 15:05:26 +0000

@ Ted Unfortunately, yes. Even if you don’t get the tax deduction, you still get tax deferred growth.

By: Ted Nix

Ted Nix — Wed, 20 Feb 2013 04:22:38 +0000

If I contribute to a traditional ira with after tax money am I still taxed when I withdraw?

By: Brian

Brian — Wed, 30 Jan 2013 19:14:39 +0000

@Integrator:

If you were wanting to live off of dividends, you would probably be better using a taxable account (or a ROTH) since withdrawls from a Traditional IRA are at your normal tax rate versus the much more favorable dividend rates. Of course I am not an advisor, but that is something to consider.

By: Integrator

Integrator — Wed, 30 Jan 2013 00:51:28 +0000

Great post. I didn’t realize there was an option to withdraw funds from an IRA early with no penalty providing you commit to an equal withdrawal schedule for 5 years. One of my main reluctance with an ira was that I wold get slugged a withdrawal tax when I wanted to retire and live off my dividends early (say by 40-45 or so). I didn’t realize there was an option to take this out in equal payments.

By: Jeff Rose

Jeff Rose — Wed, 08 Feb 2012 04:05:42 +0000

You actually qualify for both. What the comment was alluding to is if both you and your spouse are covered by 401k plans at your work. If so, then can still contribute to a traditional IRA; you just won’t get any tax deduction.

That’s why most people will generally lean towards a Roth IRA. Remember that the Roth IRA also has phaseout limits. You can find more on the Roth IRA rules here: http://www.goodfinancialcents.com/roth-ira-rules-contribution-limits/

By: jeffrose

jeffrose — Wed, 08 Feb 2012 04:02:44 +0000

@scs00 You actually qualify for both. What the comment was alluding to is if both you and your spouse are covered by 401k plans at your work. If so, then can still contribute to a traditional IRA; you just won’t get any tax deduction.

That’s why most people will generally lean towards a Roth IRA. Remember that the Roth IRA also has phaseout limits. You can find more on the Roth IRA rules here:

By: scs00

scs00 — Tue, 07 Feb 2012 17:59:15 +0000

I’m wondering what you meant by the following sentence. My wife and I (married, filing jointly) make more than $112k. Are you saying that we are instead eligible for the Roth IRA since we make more than the highest threshold number? Thanks for the clarification!

“If you find you are just beyond these ranges, you’ll qualify to put money you can’t deduct into a Roth, instead of just putting after-tax money into the traditional IRA.”