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      11-26-2012, 08:33 AM   #5
gatorfast
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Quote:
Originally Posted by roastbeef View Post
i would hate to pay taxes for the conversion, and then pay taxes on the $10k as income. something like that would definitely kill the deal.
i'm 25, so i have a lot of time to let these things grow.

i'm no expert, but the 457b has just been "ok." i've only had it for about four years, but i'm not that impressed with it. i picked up my first investment property this year, and i've been thrilled with that.
i might just need to slow down and recognize that the 457b is long term, and i'm getting excited about the instant gratification of getting another rental property. i almost feel like another rental is going to bring a better return right away, as well as a long term return, but maybe i'm just looking at it a little skewed.
You would pay taxes on the conversion but not on the $10k from the Roth post conversion (as that is already post tax income). But like I said, you will be paying a "penalty" (i.e. tax) on your funds when you withdraw from the 457b with no future benefit. So if the tax rate is 20% for example, you would need to withdraw $12,500 in order to net you $10k.

You are right when you said you need to slow down and realize that your retirement accounts are long-term. Its not a get rich quick thing but rather a build over time thing.
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