<p>@coolweather, I find that it’s best to track basis myself using Quicken. Until recently, most companies tracked basis assuming either FIFO (first in, first out) or average cost, but now they can also track individual lots.</p>
<p>As @notrichenough said, you’re probably fine with your 401k and IRA accounts, assuming that you made only tax-deferred contributions. I would call your taxable account owners and ask.</p>
<p>Yes. I only have tax-deferred contributions.</p>
<p>We have tax deferred and ROTH contributions. I have no basis for a few of our ROTH holdings but it doesn’t keep me up at night so far.</p>
<p>You generally don’t need a basis for Roth accounts either, because none of the distributions are taxable.</p>
<p>If you wanted to withdraw the original contributions before you are old enough to take regular distributions, then you would need to know how much you contributed.</p>
<p>There is a form to fill out for tax basis for Roth which I posted earlier. I’m too lazy to dig up again.
I’m goofing off again today, i.e. not working. It’s nice to see all green on my stock portfolio. I’m sure there will be some give back but I’m not too worry. I’m like Warren Buffet, I don’t bet against America. 
But I’m happy to short stocks that are overvalue and take up a little profit here and there.</p>
<p>H is already past the age where he could take out whatever he chose with no penalties. I am approaching that age as well! Time does march on! Guess I’ll have to get off my duff and invest our cash. ;)</p>
<p>We only have tax-deferred 401K and IRA. That may or may not be the best plan, but it does seem simpler to not have a mix. </p>
<p>One of 4 elder law attnys in our state talked to my cancer support group tonight. Very good info. I will post something in ‘parents caring for the parent support thread’</p>
<p>Dunno, we like having a mix of tax-deferred and Roth. It’s not complicated, you just have to remember the characteristics of each type of account and try to be strategic in how you choose to invest, if you want to take advantage of the tax deferral aspects.</p>
<p>It’s complicated if you have non-deductible traditional IRA and then IRA and then Roth. It’s a mess.</p>
<p>When is the roth a clear advantage over IRA? Is it when you have to take RMD that you don’t need to live on and have cash to pay the tax?</p>
<p>Roth is clear advantage if you don’t need to use it. You don’t have to take RMD at 70.5 as the law right now.</p>
<p>Yes, we like Roths because we want the funds to grow and prefer not to have to take RMDs before we need the funds. If you don’t need the funds for a few more decades, that’s a few more decades if taxfree compounding. That’s what we hope for. ;)</p>
<p>Other tax deferred accts really aren’t that complicated–all taxed as amounts are received. </p>
<p>So I was discussing with my husband regarding Roth IRA, trying to explain why it’s good idea for my daughter to put in now versus later. Assume the rules of 72 and the average rate of return of the stock market is 7%, so your money will double every 10 years. So
If you have $10 it will turn into $160 in 40 years.
If you have $100 it will turn into $1,600 in 40 years.
If you have $1,000 it will turn into $16,000 in 40 years.
If you have $10,000 it will turn into $160,000 in 40 years.
If you have $100,000 it will turn into $1,600,000 in 40 years.</p>
<p>$1.6 Million in 40 years is still a lot of money, assume no additional investments. It goes to show that it’s important to start saving early.</p>
<p>At what point paying the tax upfront becomes worth it? We have a good accumulation in the 401k. Roughly half of it will go to tax if we convert it all at the same time.</p>
<p>What do you expect your effective tax rate to be when you are retired? If you won’t be paying more in taxes then than you are now, a conversion doesn’t make much sense.</p>
<p>According to the computer programs, we will be able to support ourselves without making material inroads into our principal. Would it make more sense for us to take the RMD after retirement and move it into normal taxable brokerage accounts, so that our kids inherit without a taxable event ?</p>
<p>If we cannot put money into Roth due to stretched budget, we are converting IRA money into Roth and paying the tax - so slowly converting.</p>
<p>Easier to do in ‘baby steps’.</p>
<p>We cannot convert anything out of H’s current 401k since he is still working for firm. After company matching, we should be fully funding Roth before continuing 401k contributions, but that is too involved…</p>
<p>Having offspring fund Roth during young years helps them immensely. There were a couple of years when both H and I were working that I should have pulled back a little on 401k and fully funded Roth.</p>
<p>The key is to have enough money and try to use the tax laws as much as you can to your advantage.</p>
<p>If my current traditional 401k value is $100K and my current tax rate is 20% and I convert it to Roth 401k, which of the following is correct?</p>
<p>a. My new Roth 401k will have value of $100K and I have to find $20K in my pocket to pay tax.
b. My new Roth 401k will have value of $80K and I don’t need to pay tax.</p>
<p>And similar question for converting traditional IRA to Roth IRA.</p>
<p>^Not sure what you are asking. Both are correct but a makes more financial sense. Some experts were saying roth conversion makes sense when you can pay the tax with other cash.</p>
<p>
</p>
<p>We live thriftly and don’t need much to live on. We have enough without having to take the RMD. I am trying to avoid taking RMD that will simply increase our tax.</p>