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Old 02-18-2019, 07:09 PM
 
Location: The South
4,880 posts, read 3,390,531 times
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Quote:
Originally Posted by ChessieMom View Post
Are you in a different tax bracket now than you were before retiring?
Yes, I retired at age 57 and now I'm 81.
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Old 02-19-2019, 03:17 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
21,560 posts, read 38,596,035 times
Reputation: 22082
Quote:
Originally Posted by ChessieMom View Post
There is an online calculator ( I’ll have to look for the link) where you can enter the numbers in...how many years to retirement, expected tax rate, etc. It will show you the difference in a a Roth investment vs a tax-deferred. For me, tax-deferred won.
For me... the new tax tables indicate more Roths are in my future. (not yet age 62 / SS / Medicare)

For all of life.. I have run the scenarios and adjusted Roths and Tira based on best immediate return / value to me. Low tax yrs I do Roth conversions. I use my DAF (since age 39) in high tax / windfall yrs.

Goal... 50% of Qualified to be in Roths by age 70.5. (Age 65 - age 70.5 will be BIG Roth conversion yrs (based on actual tax requirements (always staying BELOW the ceiling of doom) )

If RMDs... that amount will go to QCD

but... Staying Flexible!

Who knows what lurks in our future?

Hint... A single plan will NOT be the right plan.

Stay flexible (as possible)

Consider ALL tools! (such as sect 179's, 1031's, Self directed IRA's (holding businesses and investment props), items allowing a depreciation write down (+/-)... and the basic 'makes sense stuff'... employer contributions. Tax advantaged HSA...
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Old 02-19-2019, 04:11 AM
 
521 posts, read 156,305 times
Reputation: 1141
I'm not sure what 'too much' in tax deferred might be. The husband and I have more in tax deferred than we do in Roth accounts. We are taking advantage of the new, lower tax brackets to do some strategic Roth conversions. Converted about 10% of our tax deferred funds last year and will probably continue to do that until either the TCJA expires, or we decide that we have a decent balance.

The goal is for a decent balance based on a single person, rather than us as a MFJ couple - basically, we're preparing in case one of us dies long before the other....
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Old 02-19-2019, 04:33 AM
 
Location: Thailand
5,475 posts, read 2,609,459 times
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Yep, balance gives you flexibility. One can work against a lot of different future scenarios with retirement funds in taxable, Roth, and deferred.
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Old 02-19-2019, 05:17 AM
 
68,031 posts, read 68,865,372 times
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i messed up by having to much in deferred and not enough in roths when i had the chance . it cost me big time in lost aca subsidies and getting ss taxed . it will cost us again in 2 years when my wife starts rmd's .. while we will reinvest what she takes out , all gains are taxed from that point on as well as all interest unlike a roth .

taxe brackets don't have to budge and the roth has clear advantages besides tax bracket .
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Old 02-19-2019, 07:21 AM
 
Location: Proxima Centauri
4,254 posts, read 1,779,668 times
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Quote:
Originally Posted by NSHL10 View Post
53 years old, self employed, no pension. I have been putting away money steadily in a SEP IRA. I now have a 5:1:1 ratio of tax deferred to Roth to taxable savings.
I know it sounds strange, but I am wondering if I have too much in tax deferred savings? Was wondering if I should hold off on SEP IRA contributions, take the tax hit, and put it in taxable savings? Or am I just overanalyzing this?

When you are seventy and one half the your mutual fund companies will give you a figure that you will need to withdraw each year from your taxable funds. What you want to do here is to see an accounting attorney who can advise you how to set that ratio so that taxes are minimized in the future.
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Old 02-19-2019, 07:30 AM
 
68,031 posts, read 68,865,372 times
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not sure what you mean by set the ratio
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Old 02-19-2019, 09:12 AM
 
Location: Cary, NC
725 posts, read 3,789,846 times
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I'm 41 and have about $950k in traditional IRA and about $250k in Roth. My effective federal tax rate in 2018 was just under 10%. But when I invest in Roth today, that money is taxed at my marginal rate (22%) as opposed to not paying 22% on any money that I put into traditional. So why does Roth make sense for me? I don't see any scenario in retirement where I am paying a 22% effective tax on my traditional IRA withdrawals, so why would I want to pay 22% tax today for Roth? It seems very possible that my effective tax rate in retirement could be the same 10% (or less) that I pay today. Actually, I'm more worried about some of the tax benefits of Roths going away. Especially, ACA subsidies and SS tax, those seems like loopholes that could easily be closed in the next 15-20 years before I retire. I appreciate any feedback.
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Old 02-19-2019, 10:29 AM
 
24,845 posts, read 31,960,649 times
Reputation: 30220
Roth conversions - how do you guys pay for them? It’s a much easier thing to do when you already have a large amount of cash available.
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Old 02-19-2019, 10:32 AM
 
24,845 posts, read 31,960,649 times
Reputation: 30220
Quote:
Originally Posted by lieqiang View Post
Yep, balance gives you flexibility. One can work against a lot of different future scenarios with retirement funds in taxable, Roth, and deferred.
How is deferred going to be treated differently than taxable?
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