I suppose you are just lucky to be so rich. Who would have guessed back when you were in the 10% tax bracket.I don't understand why the cap gains is a red herring, but I also won't try very hard to because it's been a long time since I had to make any decisions related to deferral. What I do understand is that I deferred at as little as 10-15% marginal income tax (and what would have been <= 15% capital gains) and ended up paying tax at up to 40% (actually 42% on a few dollars) marginal and (if applicable of course) 28% capital gains. If you can explain to me why that was a good idea I'd feel a lot better.
Tax deferred is better or equal to taxable, assuming the same tax rate before and after, equality occurring for 100% qualified dividends and 0% LTCG. The turning cap gains into income is a red herring.
See the Example table at
https://www.bogleheads.org/wiki/Non-ded ... tional_IRA
With 100% QD, the ND-tIRA column would equal taxable up to row 30. With everything withdrawn at 0% LTCG, the After Tax would be the same as row 30. That equals the After Tax for the tIRA in column 1.
Statistics: Posted by rkhusky — Wed Jan 29, 2025 9:50 pm — Replies 24 — Views 2586