The value of a 401k is actually something I have tried to illustrate to my kid (a teenager). I tried to quantify, in a simple and easy to understand manner, the benefit of 2 main elements of my 401k - the tax saved upfront and the value (including growth) of employer contributions. Essentially I looked at both as "free money" - taxes that I didn't need to pay and could put away as well as matching contributions that we just got. Between my wife and I, that added up to $600K. Not bad imoI am retiring later this year. I'll be 64. Like many of my peers, I dutifully saved for retirement using traditional (tax deferred) IRA and 401K. In recent years, I have (strategically) converted a fair amount to Roths. Because debts are paid off, I have also accumulated a good amount in taxable (which I now realize can be tax managed). So, after learning about asset location and tax strategies, it got me wondering... what is the value of tax deferred compared to Roth and taxable? About the only things I can think of - is having enough tax deferred saved to withdrawal a yearly amount equal to the tax deduction and kicking the tax can down the road if current taxes are high. I'd like to have a better understanding, so I can tell my 30-something children how much tax deferred to have. Is there a rule of thumb for young people?
Statistics: Posted by vrr106 — Mon Mar 04, 2024 3:47 pm — Replies 85 — Views 8364