If you need $75 after taxes and your tax rate is 25% then $75/0.75 = $100 will provide it for you.Let me fix my math, which I now realize is wrong.
Your $100 in a tax deferred account with a 25% tax rate is only worth $75 post tax (after withdrawal) not $100. To me you need a $103 pre tax, not post tax, which is exactly what you have. You need to compare pre tax numbers to pre tax numbers and post tax numbers to post tax numbers. Pretty obvious I am not following your point and it is possible I am an idiot.
In original $100, you’re down to $75 regardless. You get $3 for the inflation adjustment but after taxes that’s only worth $2.25. You need a high enough real yield to cover the other $0.75.
If you need of $75 after taxes goes up by 3% than you now need $75 *1.03 = $77.25. If your tax rate is still 25% than you need $77.25/0.75 = $103
Statistics: Posted by IDpilot — Fri Oct 11, 2024 11:12 pm — Replies 92 — Views 4514