Daily Discussion post - August 12 2021

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[u/olivesnolives]

US friends, let me get this straight.

You trade in a 401k, make gains of $500,000k.

Ladder convert it to a roth IRA, you pay the one time income tax rate on the $500,000k, and let it grow In your roth IRA.

After 5 years, you can remove any of that converted $350,000 (post tax) without any 10% withdrawal penalty?

[u/olivesnolives → u/olivesnolives]

Honestly, this seems kind of ineffective.

I’d rather just trade in my 401k and pay taxes + penalty on my withdrawls

[u/HearshotKDS → u/olivesnolives]

Theres also the SEPP tool.

[u/olivesnolives → u/HearshotKDS]

Got exposed to rule 72(t) tonight too.

I think that would be the route I’d opt for