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Old 08-22-2009, 01:34 AM
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Question Taking Distribution & Increasing Contribution?

I am working FT, age 62, and plan to work until 66. I have a Roth IRA, a Rollover IRA and a small 401K. My 401K is 100% invested in PTTRX, a 5-star bond fund that I really like.

Since I have about 50% of my Roth and Rollover in cash, I would like to take some of that cash and add it to this bond fund. But, I cannot do that unless I funnel it through the 401K, since this fund has a minimum investment of $250K - (which is more than the total of all my retirements accounts).

So, I want to increase my current 6% 401K contribution to 20%, and take distributions each month from my Rollover cash position to make up for the smaller take-home paycheck.

Is this a clean deal?

I know I will be taxed on the distribution, but I will also at the same time be deferring wages.

Does this make sense? Or are my distributions going to increase my total federal or state tax bite this year

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