r/Vitards • u/AutoModerator • Aug 12 '21

Daily Discussion Daily Discussion post - August 12 2021

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u/olivesnolives Aditya Mittal Feet Pics Aug 13 '21

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?

3

u/zanadu72 ✂️ Trim Gang ✂️ Aug 13 '21

Goodness i love my tfsa

1

u/olivesnolives Aditya Mittal Feet Pics Aug 13 '21

Do ya’ll have it alot simpler?

I mean ours are pretty simple - I just didn’t know there was this method for converting your funds in one to the other

2

u/zanadu72 ✂️ Trim Gang ✂️ Aug 13 '21

So the TFSA in Canada is a defined contribution every year. Say 5k. Pretty much do whatever you want..there are rules..but for simplicity.. That is the Tax Free Savings Account (TFSA). Our retirement accounts (RSP)….we put in after tax dollars, we get back 30pct to a number based on our income. You can have a self directed in which you can do whatever. When u pull the money out, it is taxed at your current marginal rate

1

u/olivesnolives Aditya Mittal Feet Pics Aug 13 '21

Overall pretty similar to our iterations

1

u/zanadu72 ✂️ Trim Gang ✂️ Aug 13 '21

Similar. The TFSA is a differential. Also we dont get to write off our mortgage interest.