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Hennepin, IL | You have $2M and decide to split it between a Roth IRA and traditional IRA. In the traditional, you can put the whole $1M in and will owe taxes when it is pulled out. Roth you pay taxes before it is invested so you're left with the ~$560K in his figures. He's assuming the same growth rate and the same amount of time. If you take the minimum distribution from the traditional at that point and pay the taxes you're left with the ~$180K figure. If you take the same percentage out of the Roth at the same time, you get his ~$130K figure. He used 3% as the burn rate which is the minimum distribution on a traditional, however if you use the growth figure (essentially you're eating the growth but not the principle) the spread narrows but only a little.
That's what's going on in the bottom paragraph anyways.
This was originally a reply to you, then it somehow became a reply to myself below, so I copied and pasted it into a new reply. | |
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What you cannot do if you a million in cash today
