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Good points! I agree with what you are trying very hard to convey. I have stopped engaging as I simply have too much on my plate and don’t have the time to read long posts and parse examples here.
If someone follows my basic math that I shared earlier, it shows pretty much that. The example in this publication comparing contributions to Roth vs. Pre-Tax IRA. And, it is quite clear. The simple math I provided for the retiree with no earnings and, therefore, no IRA contributions. It tackled that scenario (only conversion to Roth or not being the options). They all have the same outcome stated really well in your last post -
Time does not matter, only gains, losses and taxes matter.
I agree Her trying to poke holes has just been wasted time and she still does want get it that you are withdrawing and spending the same swr you set up initially
It really is time to let her believe what she wants , as long as others get it then mission accomplished
We are all going to pull our income in the most efficient manner
Since rmds will not drain our iras in our lifetime they may get trained first paying the taxes out of the rmds leaving the higher balance in the taxable account alone for the most part
Others may want to take advantage of writing off losses in the taxable account or are in the zero capital gains bracket
The reality would a we will all play out differently
But the point raised that somehow the Roth needs time to grow was certainly shot down
They are equal and the only difference may appear on the handling of the taxable account and if there is a different tax situation but then it isn’t apples to apples in a controlled kind of situation
It then becomes individual situations
Last edited by mathjak107; 08-27-2023 at 07:56 AM..
I agree Her trying to poke holes has just been wasted time and she still does want get it that you are withdrawing and spending the same swr you set up initially
It really is time to let her believe what she wants , as long as others get it then mission accomplished
Anyone is free to do anything they want with the discussion, including with the holes :-).
I agree Her trying to poke holes has just been wasted time and she still does want get it that you are withdrawing and spending the same swr you set up initially
It really is time to let her believe what she wants , as long as others get it then mission accomplished
We are all going to pull our income in the most efficient manner
Since rmds will not drain our iras in our lifetime they may get trained first paying the taxes out of the rmds leaving the higher balance in the taxable account alone for the most part
Others may want to take advantage of writing off losses in the taxable account or are in the zero capital gains bracket
The reality would a we will all play out differently
But the point raised that somehow the Roth needs time to grow was certainly shot down
They are equal and the only difference may appear on the handling of the taxable account and if there is a different tax situation but then it isn’t apples to apples in a controlled kind of situation
It then becomes individual situations
Except for liquidation of Roth or two combined accounts by heirs on the day of death, there will always be taxes on Berkshire when withdrawn in 24% tax bracket, no? And the longer time Roth has grown in parallel with Berkshire capital gains, the larger difference will be on taxation of Berkshire vs. no taxation of Roth. There is no account other than Roth which can fully compensate for tax losses on RMD, UNLESS all acounts are liquidated on the day of death.
the reality is most don’t max out their 401ks or even iras .
so those who do the traditional wilo contribute 25% more then those who do roths since the tax money is going in they would have spent doing the roth and is the same pretax dollars from their checks .
the two accounts only come up when one is maxing out contributions .
so the odds are that it will play out exactly equal just like the article .
most are not going to be channeling much into a taxable investment either when they take rmds as they will be living on those rmds from the retiremnt account or the roth , especially if they have no sustaining pension .
on the other hand most who don’t need the rmds or roth withdrawals will be the ones to most likely throw it in an investment in the taxable account and forget about it eventually passing it tax free to heirs .
so for most there will be no difference in tax or balance
there is a good chance that down the road roths will be taxable on future growth the same way traditionals are after a certain age as well as count towards aca and iirma surcharges.
AND NO. , TIME HERE MAKES NO DIFFERENCE when it is in retirement accounts for sure .
whatever balance is in the roth the taxable account will always be equally larger with it holding 24% more because of the tax money until every penny of traditional is taxed
if you still think so then i suggest a basic math class on percentages is needed
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% wise, the taxes will be identical (in a controlled situation)
Dollars are differing amounts, of course.
Since life is most often 'uncontrolled'.... Stuff happens.
Most likely the tax implications of filing joint during accumulation, and single in later years, which will mean RMD. Plan for it. Planning software projections accommodate scenarios of adjusting the date you might become single, as well as tax burden upon estate settlement.
Some might want to run those numbers, as they implement their plans.
As brackets change, and upper tiers are quite broad.... The future projections may not be significant to your situation. Or... They could be large enough desire change to modify your current planning and execution.
(Hint: ask your spouse regarding your proposed execution/ termination date, urgent planning may be required)
the reality is most don’t max out their 401ks or even iras .
so those who do the traditional wilo contribute 25% more then those who do roths since the tax money is going in they would have spent doing the roth and is the same pretax dollars from their checks .
the two accounts only come up when one is maxing out contributions .
so the odds are that it will play out exactly equal just like the article .
most are not going to be channeling much into a taxable investment either when they take rmds as they will be living on those rmds from the retiremnt account or the roth , especially if they have no sustaining pension .
on the other hand most who don’t need the rmds or roth withdrawals will be the ones to most likely throw it in an investment in the taxable account and forget about it eventually passing it tax free to heirs .
so for most there will be no difference in tax or balance
there is a good chance that down the road roths will be taxable on future growth the same way traditionals are after a certain age as well as count towards aca and iirma surcharges.
AND NO. , TIME HERE MAKES NO DIFFERENCE when it is in retirement accounts for sure .
whatever balance is in the roth the taxable account will always be equally larger with it holding 24% more because of the tax money until every penny of traditional is taxed
if you still think so then i suggest a basic math class on percentages is needed
Roth will never be taxable, no matter what. There were proposals to limit total Roth value to $20 million (the rest would have to be withdrawn, and placed somewhere taxable), and even that only for people who make like over $400k/year. That cosmetic change will affect essentially only a few billionaires (who else is in the highest tax bracket, but nevertheless can convert more than $20 million to Roth?). Some variant of that may happen, ie, capping Roth values, but nobody ever wanted to tax a Roth. It particularly won't be taxed "after a certain age".
The whole point of Roth is for modest earners to be able to grow some money (over TIME) tax-free, for tax-free withdrawal at "a certain age", so their savings withstand inflation over TIME.
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