Grat, IRA, etc.

1. God and all that helps me get through a day, especially everyone involved
2. Thinking about retirement options

A story I recently read about the first Roth IRA customer 10 years ago (Marcia Lewis with Fidelity) got me thinking more about ways to set up an income stream during retirement.

The Roth IRA provides tax-free investment growth. But, is it a good idea to tap into that early in your retirement (as Lewis did)? Earnings and withdrawals are tax-free so tapping into the IRA early is what a lot of people do.

The Roth IRA lets earnings grow tax-free, giving the option of withdrawing contributions at any time penalty- and tax-free. There are also no minimum required distributions.

Of course the minimum required distributions I would have to take out first during retirement, if I live that long of course. :-)

With Roth IRA money not taxed upon withdrawal, Lewis figured that if she is in a high tax bracket during early retirement she would benefit by tapping into her Roth IRA money first. Her traditional IRA or 401K could continue to grow tax-deferred (not tax free upon withdrawing). If she were not in a high tax bracket at early retirement she could tap into non-Roth-IRA investments.

The traditional IRA requires minimum required distributions at age 70-1/2.