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yes , but paying full tax rates on equities in a retirement plan can far out weight any increase in tax .
paying special capital gain rates is much preferable. you may qualify for 0 or 5%.
You sure got their attention now.
I tell ya, the government's writing of the qualified retirement code was genius. They found a sneaky way to tax capital gains and dividends at ordinary rates. It's a good deal for us, but they also get much more revenue from retirees than they would otherwise.
yep equities in a roth vs taxable are a no brainer. in either case you pay the same tax going in.
one other benefit of the taxable account for equities is this.
when the kids inherit a roth they have to take withdrawals . the taxable account passes tax free if under estate limits and never gets taxed on the gains and has no rmds for the kids who inherit it.
Isn't it true that index funds (like Total stock market) are very efficient and have very low distributions/low turnover compared to most tax managed funds?
Mathjak, say I'm in my early 40's and funding my 401(k) above match and funding Roth and have sizable taxable accounts. I am on pace to retire within 20 years. I expect to be in the 15% tax bracket (currently in 25%)
You say its a specific 'case by case' for Roth vs. Traditional. I use low turnover/tax efficient index funds. Tell me what you would do going forward w/the different buckets and specifically why? if its a 'case by case', tell me what my 'case' is....
Mathjak, say I'm in my early 40's and funding my 401(k) above match and funding Roth and have sizable taxable accounts. I am on pace to retire within 20 years. I expect to be in the 15% tax bracket (currently in 25%)
You say its a specific 'case by case' for Roth vs. Traditional. I use low turnover/tax efficient index funds. Tell me what you would do going forward w/the different buckets and specifically why? if its a 'case by case', tell me what my 'case' is....
Why do you expect to be in the 15% when you retire? I am not doubting you at all just curious.
Isn't it true that index funds (like Total stock market) are very efficient and have very low distributions/low turnover compared to most tax managed funds?
yes , but when you either sell some to live off of or sell them because of goal changes down the road the tax bite can be nasty
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