Munger_Disciple Posted May 13, 2011 Share Posted May 13, 2011 http://www.businessinsider.com/will-congress-raid-your-roth-iras-2011-5 An interesting article on the possibility of government taxing Roth IRAs. There were a lot of discussions about the tax efficiency of Roth vs. regular IRA in the past on this board. Link to comment Share on other sites More sharing options...
Myth465 Posted May 13, 2011 Share Posted May 13, 2011 This would be a tough one. I guess anything can happen but this would be the ultimate bait and switch. Also want about those who converted a traditional to a roth.... Link to comment Share on other sites More sharing options...
valuecfa Posted May 13, 2011 Share Posted May 13, 2011 I could see the US possibly ending the Roth IRA (it is such a great vehicle) for new annual contributions at some point well into the future (under more dire circumstances), but not turning accounts that are already ROTH IRAs in to taxed accounts. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted May 13, 2011 Author Share Posted May 13, 2011 The article points out that Ireland just imposed a tax on personal pension plans, thus reneging on past promises. It may be unlikely in the US, but not impossible. Link to comment Share on other sites More sharing options...
Guest ValueCarl Posted May 13, 2011 Share Posted May 13, 2011 This is interesting while they don't even address the poorer amongst us who were converting traditional IRA's as a result of lower income thresholds and "paying taxes" on valuations which may or may not be higher at the point of such a change in earlier "promises" by their government. Tea parties, eh? :( Link to comment Share on other sites More sharing options...
ERICOPOLY Posted May 14, 2011 Share Posted May 14, 2011 I predict they will look at the combined balances in your 401k/IRA/RothIRA, put it through some sort of annuity calculator, and deduct that amount from your annual Social Security benefits. Link to comment Share on other sites More sharing options...
bookie71 Posted May 14, 2011 Share Posted May 14, 2011 They will tax the Roth via the VAT. That way they don't go back on their word. It will be years from now, but that is my prediction. Another possibility is the way they do social security via a sliding percentage based on gross income. Link to comment Share on other sites More sharing options...
sswan11 Posted May 14, 2011 Share Posted May 14, 2011 I think a VAT is inevitable, preceded by higher personal income taxes. Personally, I'd like to follow Michael Burry's advice and move to Canada, where at least the currency is strong and you get something for your taxes! Link to comment Share on other sites More sharing options...
matjone Posted May 14, 2011 Share Posted May 14, 2011 It's funny because I was just going to post this same question and see what the board thought. I asked my accountant about it once and she said it was possible but extremely unlikely. I decided to add some to 401k and max out the roth every year, in case my tax bracket is higher when I retire. Can someone explain in layman's terms how the VAT would work? Link to comment Share on other sites More sharing options...
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