John Critchlow: “One IRA conversion question that seems to come up a lot is about the tax implications down the road as you start taking out funds. The opinion of the moment seems to be that taxes are going up in the future. But as you pointed out yesterday, our ever more creative politicians will come up with other ways to change things. So what to do? I think the most pragmatic advice I have seen is to try end up with roughly equivalent amounts in both the traditional and Roth categories. That way you can choose which IRA to draw from depending on what is happening at the time. At the very worst, you will have been only half wrong. Many companies are providing Roth 401Ks that you can contribute to. You could simply leave what is in the traditional 401K alone and start new contributions into the Roth category, thus providing both types down the road and no tax hit in the short term.”
☞ Good point. In my example yesterday I imagined you were 40. So if you just maxed out to a Roth IRA each year going forward, that could make a lot of sense. But if you’re about to retire (which I am, if I can ever sell enough banner ads on this site), you’d have to convert at least a portion of your traditional IRA, as I just have, if you wanted the flexibility you describe.
David Morrison: “Everyone should open a Roth IRA account by the age of 54 1/2, even if it is minimally funded. That way, you’ll start the clock, so that when you reach 59 1/2, you can qualify to distribute money tax-free from the account. Even if the assets haven’t been in that account for 5 years, the tax-free scenario works if the account has been open that long.”
☞ Fair enough – although I’d guess most people would not be in a rush to make withdrawals when they are so young, especially from an IRA that was minimally funded. Still, it makes sense.
CHEER THE MARINES
Yesterday, we cheered the Navy for its green-energy initiatives. Today, with this statement, we have reason to cheer the Marines:
Fidelity is the essence of the United States Marine Corps. Above all else, we are loyal to the Constitution, our Commander in Chief, Congress, our Chain of Command, and the American people. The House of Representatives and the Senate have voted to repeal Title 10, US Code 654 ‘Policy Concerning Homosexuality in the United States Armed Forces.’ As stated during my testimony before Congress in September and again during hearings before the Senate Armed Services Committee earlier this month, the Marine Corps will step out smartly to faithfully implement this new policy. I, and the Sergeant Major of the Marine Corps, will personally lead this effort, thus ensuring the respect and dignity due all Marines.
On this matter, we look forward to further demonstrating to the American people the discipline and loyalty that have been the hallmark of the United States Marine Corps for over 235 years.
— Marine Corps Commandant General James Amos
I meant to run this months ago, when it was hot. But print it out and tape it to your dryer, for Spring:
Piet Bach: “Regarding your tale of the electric meter and the sudden furious forward spinning of the wheel when Charles turned on the dryer, I’ve been drying my towels on the line on clear days for years and here’s a little tip. Usually, they dry rather stiff — not fluffy, not gentle on our aging (well, my aging) skin. But. If you run them in the dryer on ‘air fluff’ or ‘no heat’ for a few minutes (say, five) before you hang them out, you get much nicer, more comfortable results without paying for the heat in the dryer, which is what spins the meter forward fastest. They fluff up well, and actually seem to dry faster since the fibers have been opened up to let the air move around. I think. If they’re still a bit stiff, I just put them back in the dryer for another five minutes without heat and that seems to do the trick.”
According to Gallup, 40% of Americans believe God created humans 10,000 years ago. I would expect this puts us first among developed nations in this belief. So now we have gold medals in obesity, energy inefficiency, and whatever is the scientific equivalent of innumeracy (and we are almost surely first in that, too). It’s a good thing God is on our side, or we might be in for a rough competitive ride.