Reply to Explain like I'm 5... maxing out retirement

Forum Index » Money and Finances

Reply to "Explain like I'm 5... maxing out retirement"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]I started using the Roth 401k late and regret it.  I now put everything into the Roth and have done a conversion. Here are my reasons, which I do not believe are universally applicable but rather things that are part of the considerations:

1. In no way did I factor RMDs into my post retirement income. Once I did, I found that they are high enough to push me into a higher tax bracket than I am today.
2. The above is compounded as DH's health is poor, and my chances of many years of having to pay at high single rates rather than married filing jointly rates are quite high.
3. One of my savings goals is to leave money behind for me kids subject to as little tax as possible.  Both a 401k and 401k Roth are factored into estates for tax purposes.  I live in a state with a low threshold.  All things being equal, the untaxed 401k amounts will be higher than the taxed Roth 401k amount, making the estate smaller and, thus, less subject to estate taxes.

It all comes down to a personal choice about one's particular circumstances and risk appetite, particularly with respect to where tax rates might go. [/quote]

May I ask what your marginal tax rate is now?  Ours is 35% and I just can't make the math work in choosing Roth v. Trad'l.[/quote]

Marginal rate is 35%.  Rate in retirement with RMDs would be 37%.  If my spouse died, income would be less but I would still be in the 37% bracket filing as single.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics