This is true, I was speaking more towards the generic advice of "if you think your tax rate will be higher in retirement

Apr 8, 2021
3:19:30pm

molodyets Mortgage guy in all 50 states

then ROTH away!" is bad because it doesn't compare marginal to effective tax rates. Most people will have a hard time creating an effective tax rate in retirement higher than their current marginal tax rate.

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molodyets

Previous username: patches1391
Bio page: molodyets
Joined: Mar 26, 2006
Last login: Apr 25, 2024
Total posts: 43,167 (19,256 FO)

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Messages

Author

Time

Here's a periodic reminder that for most people, Roth accounts are overrated and people don't look at the big picture

molodyets Mortgage guy in all 50 states

4/8/21 3:02pm

What do you think about living from a Roth IRA/401k while replenishing...

OPINIONS

4/8/21 3:08pm

A backdoor is usually good when you can do it. The issue with talk on Roths is people compare marginal to marginal

molodyets

4/8/21 3:16pm

<< Deleted >>

OPINIONS

4/8/21 3:24pm

I’ve always felt the employer match along with earning % over 30+ years

USMCdad

4/8/21 3:11pm

My understanding is this sentence is incorrect:

JuicyJam

4/8/21 3:12pm

(often/some)times, you're disqualified from ROTH contributions too.

grosven

4/8/21 3:17pm

I argued this same thing with multiple people, for years. I only contributed to

grosven

4/8/21 3:14pm

Roths are incredibly important for the purposes of being able to access retirement funds before 59 1/2.

TheLoneCougar

4/8/21 3:16pm

This is true, I was speaking more towards the generic advice of "if you think your tax rate will be higher in retirement

molodyets

4/8/21 3:19pm

I take advantage of both in the sense of traditional 401k but use Roth IRAs for my wife and I.

TheLoneCougar

4/8/21 3:37pm

Actually tax rates are definitely going to be higher in the future. Demographics

Nat Gas Man

4/8/21 4:32pm

You can access your retirement money before 59 1/2 without penalty

Acorn

4/8/21 4:59pm

What are those requirements?

TheLoneCougar

4/8/21 5:19pm

Substantially equal payments.

Acorn

4/8/21 5:25pm

Cool, I'll check it out.

TheLoneCougar

4/9/21 7:30am

I disagree with most of their logic. It may make sense for the person making the

hansel

4/8/21 3:23pm

They should be converting traditional accounts to ROTH over time (if they are not receiving W2 income).

TheLoneCougar

4/8/21 3:39pm

This article is specifically targeting people that live on much much less than

BYUFootballisBack

4/8/21 3:43pm

I'll read it later, but a 30 second skim looked like some possible bad math.

Byron McNertney

4/8/21 3:45pm

while I think there's something of value in there...

The Shazad

4/8/21 4:20pm

You can't deduct contributions to a traditional IRA if you make more than $125,000 if you are married

YIsForBrigham

4/8/21 3:46pm

Still applicable to 401k choice, and if your wife doesn’t work then you can max her trad IRA

molodyets

4/8/21 3:47pm

If you make more than 208k, you can't deduct spousal contributions either. The choice of 401k applies though

YIsForBrigham

4/8/21 3:57pm

Does anyone know a family with $54k in annual income that is A- looking at early

chrisrenrut

4/8/21 4:44pm

There is a whole community of them that, roughly, fit that description.

TheLoneCougar

4/8/21 4:51pm

My wife and I were in that situation for a year, savings were high 30s - low 40s

BYUFootballisBack

4/8/21 5:03pm

I know I'm late to the party, but these are two great articles to read when talking early retirement

supertux

4/9/21 7:34am

It seems that if you are a high income individual, a traditional contribution with a backdoor Roth conversion is the way

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