I was in that boat and ended up with 90% tax deferred. I retired as soon as I had enough and in the go-go years of retirement am spending happily from it. At much lower tax rates year after year than what it was deferred at. Exactly like it was described to me in the 1980's seminars on this new 401-K thing.It's easy to forget now but for many years when we were contributing to retirement accounts, individual or employer, the Roth hadn't been invented yet. And the overwhelming thinking for many decades was that deferring would be more favorable than paying taxes at current rates, which were in some cases in fact higher then than now. Some of us don't always shift our thinking as fast as we should, and just as significantly, it was a very long time before any sort of Roth options were available at many employers.... it begs the question as to why they saved those sums in the first place. And why didn't they do any tax planning when accumulating those funds?
I won't be "forced" to withdraw at a higher rate than we are withdrawing now for another 20 years and 26 years after retirement at age 81.
What are tax brackets looking like then? Am I dead or alive? In medically qualified LTC? Have I done charitable tax planning by then? What are my heirs tax brackets? It's a mystery.
And six years into retirement I haven't budged from where we are in the lower tax brackets in retirement (still mid-22%) because I'm actually utilizing the funds we saved for retirement for income and enjoyment in retirement. And hence no real growth. THE HORROR!
Statistics: Posted by MnD — Mon Sep 30, 2024 8:54 pm — Replies 45 — Views 4494