---""Personally, I dont think it is smart financial planning to have your entire life savings in your retirement account." Why not?"" I'd like to clarify the above response. The only exception that I can think of is an emergency account.--- Assuming you are funding your retirement account appropriately to provide adequate retirement income, why would you put additional savings into retirement accounts? Once there, you can't use them easily and without penalty until you are retirement age. No, tax savings from tax-deferred accounts are not inconsequential, but neither is the freedom that comes with having money available to use how when for what you want. I am putting money into a combination of 401k and Roth retirement accounts at a rate which will conservatively provide me with adequate retirement income. This is less than the max--(although well over employer-match). Every thing else goes into ordinary ol' non-tax-deferred investment accounts. It's not really "emergency" money--- i also have 6-month living expense emergency funds in my bank account. But I am in my 30s. Why would I put any money above and beyond what I will need for retirement somewhere that I can't easily reach it for the next 15-20 years? Maybe I'll want to go to grad school and want to use it for tuition. Maybe I'll get married and want to put my husband through school. Or my husband's kids. Maybe I'll want to buy a bigger more expensive house and want to use it for down payment. Or a second vacation and/or investment home. I might want to take a year off work and travel. I might want to take a year off work and be a mommy to a new baby. I might not *want* to take a year off work but be forced to when I'm fired from my current job and it takes me a year to find a new one. I might want start-up money for my own business. I might have a sudden desire for one of those convertible Mercedes two-seaters (is it the SL i think).... I might I might I might. Freedom (and security) is "why not?" (which are the same reasons btw that I'm saving it in the first place rather than simply spending everything above and beyond what I've decided I need to save for retirement)

. I also have about 13,000 in my 401K account that I will either have to rollover to an IRA or take the distribution from my old job. I 'think' it would be best that you roll it over, and totally avoid distribution. From the link below: "Your 401k withdrawal options are as follows if you are under 59 � -Take a lump sum distribution, in which case your 401k plan provider will write you a check for the value of your account less a 20% withholding tax mandated by the IRS, and a 10% withdrawal penalty. The 20% tax that is withheld, but NOT the 10% penalty, will be counted against your income tax payable or will be counted towards any refund due for the tax year when you file your tax return. Some 401k penalty free withdrawal exceptions are here. -You can do nothing and leave it with your previous employer as long as the amount is greater than $5,000. Amounts less than $5,000 will usually be distributed to you, less a 20% withholding tax, regardless of you age. (Check with your plan sponsor) -Do 401k rollover into an IRA or a solo 401k (if you are planning to open your own one person business) Here is a link that might be useful: 401k Withdrawal Options

I'll be happy to help you with this. First of all, there are two different reduction calculations: one for the basic insurance and one for the option B insurance. It sounds like your question pertains to the basic insurance. As I stated in an earlier post, it appeared that your husband had calculated the basic insurance premium based on a 50% reduction at age 65. What this means is that starting with the 2nd month following his 65th birthday, the amount of his basic insurance will decrease 1% per month for 50 months until the amount of the insurance is only 50% of what it was when he retired. So, if he started with $150,000 of basic life insurance, it would end up being $75,000 when he is 69. The amount that he pays will change from .925 per thousand to .325 per thousand at age 65 and will continue for as long as he lives. He could also choose the "no reduction" option, in which case the basic insurance would never be reduced and the full $150,000 would be payable upon his death. However, instead of paying .925 per $1000, his premium would start off at more than double that amount. He would be paying $2.155 per $1000. Finally, he also could choose the 75% reduction which of course is the cheapest. He would start off paying only .325 per $1000, but at age 65 the amount of basic life insurance would begin reducing at the rate of 2% per month until only 25% was left. So, if he started with 150,000 worth of basic insurance, he would be left with only 37,500 by age 68. However, he would stop paying premiums at age 65 and the 37,500 worth of insurance would be free for the rest of his life. Similar choices must be made with regard to the optional insurance, but I believe that those choices don't have to be made until he is 65. Let me know if you want me to go into detail about the optional insurance (which represents about $300,000 of his coverage). I hope that this explanation has helped somewhat.

A basic principle of taxation in the USA is every dollar is taxed once and only once. (Qualifying Roth IRA withdrawals can be an exception.) Your contributions to the Roth IRA should not be taxed again by the IRS because you already paid taxes on those contributions when you put them into the Roth IRA. The earnings on the Roth IRA may or may not be taxable depending on your circumstances. For example, how old are you, how long were the funds in the IRA, were there any circumstances that existed in your life that would qualify you for an exception to the 10% penalty for early withdrawal? Page 58 of the pub linked to below should help you answer your questions. In my 12 years of preparing taxes, one of my favorite things to do is prove the IRS wrong when they assess additional taxes. Good luck. Here is a link that might be useful: IRS Pub 590