Your overall plan looks great. To the extent you can, tell your worry-wart side to chill out.New Contributions
$8000 – 403b pre-tax, employer contribution to RC
$15,000 – 403b Roth, employee contribution to RCP**
$8000 – my Roth
$8000 – spouse’s Roth
I realize this is not one of your stated primary concerns, but I think you should reconsider your tax planning. These new contributions to Roth accounts, for example, are forcing you to pay 22% federal tax on 31k ($6,820, and current law says that 22% rate reverts to 25% in 2026 IIRC, so the cost could be even more). When you retire, with the oldest of you at 62.5 on your current plan, you could have several or many years of lower/managed income (i.e., lower than your current income), leaving you in a 12-15% marginal bracket, during which you could convert more to Roth accounts, if you desire. Many people consider this as a way to also minimize their future forced withdrawals of RMDs, when controlling one's taxable income is harder to do. On the surface, it seems to make far more sense to me for you to contribute NOW to traditional accounts, and then plan on Roth conversions once your income is lower.
Perhaps you've already thought through all of this, but if not, start by reading the wiki on Roth Conversions, and specifically the timing of doing so in retirement before collecting Social Security.
Best,
BP
Statistics: Posted by BPnWhiskey — Sun Dec 08, 2024 10:35 am — Replies 18 — Views 1752