[tcxr750]

I have been drawing on my IRA for about eight years along with other resources. One topic that I think is very important is the IRA vs. the Roth IRA. I just started the year of the RMD. I discovered that while I am satisfied with the dollar amounts I've been withdrawing for the past several years in the next few years I will have to take out larger dollar amounts whether I want to or not. The Required Minimum Distribution consequences seem to outweigh the small savings in taxes. Any thoughts on the RMD?

[rubicon]

What would you suggest?

[tcxr750]

I would suggest everyone should consider a Roth Ira from day one of investing for retirement. My retirement money has been managed by advisers on the Barron's "Top 100 List". I have asked about rolling money to a Roth when it seemed like a viable option. Of course there is a calculation that shows the consequences of such a decision in terms of dollars lost for investing vs dollars growing in the conventional IRA. I think the downside is that money withdrawn from a conventional IRA is taxed on principal invested and growth. On a Roth you are only taxed on the money going in.
My suggestion would be talk to with several investment advisers before retiring.
I retired in 1999 and had conversations with five or six advisers. Not one of them presented a strong case for the Roth. Another suggestion would be to do a lot of homework on investing early on in working and saving years. It would probably be best if you knew as much as your adviser. They are driven by fees and commissions, you should be driven by the growth of your retirement "nest egg" and the tax consequences of your investments in the long term.

[TomW]

If one is self employed there MAY be an advantage to funding the traditional IRA first and then the Roth. If you work for W-2 wages, you need to figure where you want to place the tax burden. If your income will be substantially lower in retirement then you will want to pay the tax then on the lower income and opt for a regular IRA funded first. If you calculate your income will be the same or higher in retirement, then pay the tax up front by fully funding the Roth first.