The Capital Gains Blog

Posts Tagged ‘Capital Gains Rates’

Question: How are Capital Gains treated in a Traditional IRA if one waits until age 59.5 (or later) to make withdrawls?

Imagine two people starting starting with 2,000 pre-tax dollars to invest at age twenty-five. The tax rate is a constant 25 %, and the capital gains rate is constantly 15 %.One person invests in the ROTH IRA (for 1,500 dollars because of the tax), and one invests in the Traditional IRA. If the annual rate of return for each investor is 8%, who does better in the end if retirement is age 70, exactly 45 years later?

Answer: That’s an interesting scenario. Using my retirement calculator, the traditional IRA would have the largest absolute value at retirement. But the annual payout would be the same either way. The specific amount varies depending on assumed life expectancy, but it stays the same for both IRAs.

Note that Capital Gains Tax is irrelevant. The Roth payout is tax free and the traditional payout is taxed at ordinary income rates.

Greenspan: Rising Treasury yields may signal interest-rate gains

Former Federal Reserve Chairman Alan Greenspan said the recent rise in Treasury yields represents a “canary in the mine” that may signal further gains in interest rates.

Budget 2010 predictions: Is there a future for pensions as we know them?

A Look at 2010 and Beyond

Consumers cut back on a lot of things during an economic downturn, but they can only reduce their consumption of food and household products so much.

ONC Panel: Insite Into Emerging Policy