Just found out that the maximum amount allowed for IRA contribution is up

[question everything]

by $500. For both the younger crowd - $5,500 now - and the over 50 - $6,500. This is true for both the wage earners and the spousal IRA.

I can use all the breaks available.

[elleng]

1. Good.

[SheilaT]

2. That's nice.

That does include the Roth IRA, yes?

Also, I believe that one nice thing about the IRA is that there's no mandatory requirement to take out the money, if you don't want to or need to. So, if you want (and can afford to) you could just keep on contributing until you die, and then your heirs get the money, right?

[question everything]

3. Yes does include Roth IRA

As for mandatory requirements, yes for traditional IRA no for Roth.

We have only traditional IRAs. We will be at a lower tax rate once fully retired so it was not worth it for us to convert and to pay all taxes up front. We did not have the funds, anyway. And we will start withdrawing as soon as fully retired. Social Security and savings in IRA will be our source of income.

[SheilaT]

4. I have only a Roth,

not a traditional IRA. And other savings outside that. I also have a very small 403b (a nonprofit version of a 401k) from my current job at a hospital. I am already in the lowest tax bracket there is, so I don't pay much attention to the various tax issues.

[Common Sense Party]

5. How do you know you will be in a lower tax rate in retirement?

I don't know what my tax rate will be in one year. I definitely don't know what it might be in 20 years.

[question everything]

6. I will not be drawing a salary.

Only Social Security and withdrawing from IRAs which will have to be conservative so that we don't outlive it.

We were fortunate to earn a comfortable salary and our Social Security and savings withdrawal will be a lot less. This has always been my assumption but now, that this is going to happen within the next two years - we are old baby boomers - I do know.

[Common Sense Party]

7. If only two years, you're right, your rate may not rise much anytime soon.

But since withdrawals from IRAs are taxed at ordinary income tax rates, it definitely will impact your income if tax rates go up in ten or fifteen years (which they must if we're ever going to pay some of our massive debt).