Roth or not?

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Topic Author
BettyBon
Posts: 21
Joined: Mon Mar 25, 2024 3:10 pm

Roth or not?

Post by BettyBon »

I'll be 59 years old soon and clueless about investing.

I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
    $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
      $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

      Am I too old to do a Roth?
      If not, should I just make the entire 19% Roth?

      I really appreciate your thoughts/advice.

      Thank you!
      bombcar
      Posts: 1793
      Joined: Sun Aug 12, 2007 6:41 pm

      Re: Roth or not?

      Post by bombcar »

      It's all a question of expected taxes in retirement, which means you need a more complete picture.

      https://www.bogleheads.org/wiki/Traditional_versus_Roth may be worth reading.

      If your expenses are high and will be into retirement, then social security + drawdown may be high enough that it doesn't matter.

      If your expenses are low and will be lower into retirement, then the Roth may be worse.

      You may need a full picture view. One advantage of having both Roth and non-Roth is you can choose which you drawdown.
      jaMichael
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      Re: Roth or not?

      Post by jaMichael »

      It would be helpful to know (1) your current federal and state income tax rates, (2) your estimated tax rates in retirement, and (3) whether you anticipate low income years early in retirement in which you may wish to do Roth conversions (years after you stop collecting a salary and before you start collecting Social Security, often recommended to be age 70). fyi, I’m 57 and do 50% of my 401k contributions in Roth - regret minimization strategy.
      User avatar
      FiveK
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      Re: Roth or not?

      Post by FiveK »

      BettyBon wrote: Fri Jun 07, 2024 3:41 pm Am I too old to do a Roth?
      No, there is no age limit.
      If not, should I just make the entire 19% Roth?
      No way to know without knowing your overall financial situation. See Asking Portfolio Questions.
      heyyou
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      Joined: Tue Feb 20, 2007 3:58 pm

      Re: Roth or not?

      Post by heyyou »

      by jaMichael » Fri Jun 07, 2024 8:46 pm
      (2) your estimated tax rates in retirement, and (3) whether you anticipate low income years early in retirement in which you may wish to do Roth conversions (years after you stop collecting a salary and before you start collecting Social Security, often recommended to be age 70).
      Having done the Roth conversions in my early retirement, I am now so pleased with the tax protected growth in my all stock index Roth IRA.
      Note that if one of you passes away early, the survivor will pay more tax on retirement income, which is another advantage of having done Roth conversions.
      steadyosmosis
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      Re: Roth or not?

      Post by steadyosmosis »

      I do not pay more than 12% in taxes (federal) to place money into Roth status.
      You may have a different threshold.
      Details are important.
      Age<59.5 | Early-retired | AA 52/48 | Taxable=100% VTI | Roth IRA=94% equities | HSA=94% equities | Traditional IRA=100% fixed income | I spend from the taxable account |
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      augryphon
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      Re: Roth or not?

      Post by augryphon »

      At 59, I was at my highest marginal tax rate ever. In order to reach that marginal rate in retirement I’d need to get exceptional market returns later. I chose to do tax deferred while working, when it was really beneficial. If I get exceptional market returns, I’ll have more to pay the taxes, but that’s ok. I completely ignore what might happen politically, it’s totally impossible to predict.

      Roth wasn’t available in my 401k until I was 45ish and a high earner, so I have little. If I were just starting out, I’d go 100% Roth until about 35, then do deferred during my expensive family years.
      Jack FFR1846
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      Re: Roth or not?

      Post by Jack FFR1846 »

      Something to consider in addition to the tax bracket you're in and the tax bracket you THINK you'll be in during retirement is how much you have sitting in pre-tax accounts like 401k or traditional IRA.

      I always assumed that my tax bracket would be lower in retirement. (buzzer sound) Wrong. I always assumed traditional and Roth would be better in Roth with this assumed lower rate. I also never knew about IRMAA because I was still working and assumed like many that Medicare was just free or really cheap.

      Reality for DW and me. We both saved way too much in our 401k's so now have way too much in our rollover traditional IRA. Our tax bracket was barely hitting 24% when working. Wanna guess what it is now in retirement? 24%. Why? Roth conversions. What's it going to be in 2026 when the rates roll back again? 28%. We also have looked ahead to RMD times. When you hit your RMD times, you are going to have good news/bad news. By then, being a good Boglehead, I'll have taken social security at 70 (income). But if I don't do Roth conversions of my traditional IRA, my RMDs are going to be high enough that it'll push DW and me BOTH into IRMAA territory so our Medicare costs will jump.

      So in short, we should have done traditional IRA contributions only up to the match, or in our cases, because we did do annual Roths when we could, done Roth conversions earlier. Since we now need to do Roth conversions such that our total income is just under the IRMAA limit, we are missing out on a number of cost saving things. Town property tax discounts for low income seniors, lower federal and state tax rates, non-profit programs to lower our expensive medications and more that I forget. We also are getting hit with another surprise. DW's father just passed and DW has inherited a traditional IRA. So she'll have to take withdrawals from that, pushing our income up so pushing the amount we can Roth convert down. My mom is in her upper 80's so it won't be a surprise when she passes. I know that she also has traditional IRA investments. So that will eventually be added to our inheritance and with required withdrawals from that, our income goes up more.

      I will say that I am also actively modifying our income by converting our "hoarded" cash before I retired into BRK/b in our taxable account because interest is income and BRK/b pays no dividends. Remember that dividends in taxable is income. Eventually, I'll also be selling off all funds in taxable that pay dividends to further reduce income. I find it funny that it's sort of traditional for people to look for high dividend paying stocks and funds to have regular income. I'm doing the opposite because that kind of income, to me is bad and involuntary. You can't stop a dividend but with a non-dividend paying stock (BRK or AMZN for example) you pay nothing until you want to and you can manage it so that it's taxed as long term cap gains instead of ordinary income.

      So to answer your question.....YES....ROTH!
      Bogle: Smart Beta is stupid
      Topic Author
      BettyBon
      Posts: 21
      Joined: Mon Mar 25, 2024 3:10 pm

      Re: Roth or not?

      Post by BettyBon »

      Sorry for the delay in my response but thunderstorms knocked out my internet unfortunately.

      Thank you to everyone who took the time to respond to my initial "Roth or not?" post and share their very much appreciated knowledge!

      I'll be 59 years old soon, single, no kids or family, zero debt, and retirement will be on my shoulders alone so I worry since I will have no one to take care of me as I age. Yikes.

      I'm an Executive Assistant currently making around $104,000 due to lots of overtime because my company laid off several assistants and I've taken on their workloads. I hope I don't get laid off.

      2023 Taxable Income was $98,852 (Single Filer)

      Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
      State (Missouri) = 4.95% tax bracket on $8,449 or more

      Neither of the following has been taxed yet...

      $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)

      $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

      After reading all of your responses, I think I should do 19% Roth vs. the 9% I currently have going into Roth, correct?

      Again, I'm clueless and just hoping I will have enough saved to be able to retire someday.

      Thank you
      Last edited by BettyBon on Sun Jun 09, 2024 12:14 am, edited 2 times in total.
      queenofthemadhouse
      Posts: 346
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      Re: Roth or not?

      Post by queenofthemadhouse »

      The maximum tax rate in MO is 4.95%? Are you in some special situation?

      Your tax deferred balances are such that they probably won't create enough taxable income to get you out of the 12% bracket alone. Now, with Social Security, or if you have a pension, it might be a factor.

      Missouri doesn't tax SS income starting this year, so, if your non-SS income is under your standard/itemized deductions, it's possible your retirement income isn't taxed at all in Missouri.
      Topic Author
      BettyBon
      Posts: 21
      Joined: Mon Mar 25, 2024 3:10 pm

      Re: Roth or not?

      Post by BettyBon »

      Whoops! My mistake.

      2023 Taxable Income was $98,852 (Single Filer)

      Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
      State (Missouri) = 4.95% tax bracket on $8,449 or more

      Thank you
      Last edited by BettyBon on Sun Jun 09, 2024 12:08 am, edited 2 times in total.
      Pretsler
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      Re: Roth or not?

      Post by Pretsler »

      BettyBon wrote: Sat Jun 08, 2024 10:29 pm Sorry for the delay in my response but thunderstorms knocked out my internet unfortunately.

      Thank you to everyone who took the time to respond to my initial "Roth or not?" post and share their very much appreciated knowledge!

      I'll be 59 years old soon, single, no kids or family, zero debt, and retirement will be on my shoulders alone so I worry since I will have no one to take care of me as I age. Yikes.

      I'm an Executive Assistant currently making around $104,000 due to lots of overtime because my company laid off several assistants and I've taken on their workloads. I hope I don't get laid off.

      My current annual salary is $104,000 (Single Filer)

      Federal = 24% tax bracket on $100,525 to $191,950 Taxable Income
      State (Missouri) = 4.95% tax bracket on $8,449 or more

      $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)

      $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

      After reading all of your responses, I think I should do 19% Roth vs. the 9% I currently have going into Roth, correct?

      Again, I'm clueless and just hoping I will have enough saved to be able to retire someday.

      Thank you
      OP, as it doesn’t appear to have been raised previously, I might point out that the Freedom Blend series from Fidelity contains a blend of active and passively managed funds. We on the forum typically recommend only passive funds, such as your FXIFX, which carries lower fees. Is a purely passive option available in your employer plan?
      tibbitts
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      Re: Roth or not?

      Post by tibbitts »

      BettyBon wrote: Sat Jun 08, 2024 11:15 pm Whoops! My mistake.

      My current annual salary is $104,000 (Single Filer)

      Federal = 24% tax bracket on $100,525 to $191,950 Taxable Income
      State (Missouri) = 4.95% tax bracket on $8,449 or more

      Thank you
      If your gross salary is $104k that's not necessarily your taxable income. What was your salary last year and how did that compare to your taxable income (on your federal tax return)?
      Dpmbball
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      Re: Roth or not?

      Post by Dpmbball »

      BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

      I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
        $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
          $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

          Am I too old to do a Roth?
          If not, should I just make the entire 19% Roth?

          I really appreciate your thoughts/advice.

          Thank you!
          Do you want to pass on anything to others? If Yes I believe a Roth is better to leave behind than T- IRA/401k
          tibbitts
          Posts: 24490
          Joined: Tue Feb 27, 2007 5:50 pm

          Re: Roth or not?

          Post by tibbitts »

          Jack FFR1846 wrote: Sat Jun 08, 2024 7:03 am Something to consider in addition to the tax bracket you're in and the tax bracket you THINK you'll be in during retirement is how much you have sitting in pre-tax accounts like 401k or traditional IRA.
          ...
          So to answer your question.....YES....ROTH!
          Although I'm in the same wish-I'd-done-more-Roth situation as you are, the OP might not have as obvious a case.
          tibbitts
          Posts: 24490
          Joined: Tue Feb 27, 2007 5:50 pm

          Re: Roth or not?

          Post by tibbitts »

          Dpmbball wrote: Sat Jun 08, 2024 11:35 pm
          BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

          I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
            $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
              $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

              Am I too old to do a Roth?
              If not, should I just make the entire 19% Roth?

              I really appreciate your thoughts/advice.

              Thank you!
              Do you want to pass on anything to others? If Yes I believe a Roth is better to leave behind than T- IRA/401k
              It might depend on what tax bracket the 10-year distribution would leave the beneficiaries in. And if "others" are charities then there would be no tax on distributions.
              FIRWYW
              Posts: 415
              Joined: Thu Dec 23, 2021 8:11 am

              Re: Roth or not?

              Post by FIRWYW »

              OP:
              I 100% think Roth is the wrong thing for you after doing calculations. From what you wrote, I assumed everything you currently have saved is in pre-tax. I assumed that you work until 65 but I am happy to change the numbers in my spreadsheet if you are planning to work longer. You said $104k pay, 19% contribution rate ($19,760/yr). I did not see if your employer matches but I believe that would Not change my calculations much for you.


              Current marginal tax rate is 29% (fed+state)

              60% stock portfolio
              Assuming average long term returns and inflation (optomistic in my opinion), that gives you $906k at 65. If ALL pretax, at 4% SWD rate, that is $36.2k/yr.

              Minus the 14,600 standard single deduction leaves you with $21,650 taxable income.

              $11,600 will be taxed at 10%+ state (I will assume that is a flat 5%) = 15% tax on that portion

              $10,050 will be taxed at 12+5=17%
              Effective tax overall is approximate $3450/yr or 3450/36200= 9.5% taxes in retirement.

              A saving of 29% now vs 9% tax in retirement is huge.
              You are not going to reach the threshold where social security gets taxed. You are not even close to IRMAA.

              If I change retirement age to 70, the expected 4% SWR is still only about $51k. Which is $36,400 taxable which is still going to be a really low rate, avoid SS taxation and IRMAA.

              In short, unless there is something HUGE I missed in your original post, there is no question that pre-tax, traditional 401k is the best choice
              queenofthemadhouse
              Posts: 346
              Joined: Fri Jun 04, 2021 5:26 pm

              Re: Roth or not?

              Post by queenofthemadhouse »

              BettyBon wrote: Sat Jun 08, 2024 11:15 pm Whoops! My mistake.

              2023 Taxable Income was $98,852 (Single Filer)

              Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
              State (Missouri) = 4.95% tax bracket on $8,449 or more

              Thank you
              Are you sure this $98.9k isn’t your income after deducting pretax deductions, but BEFORE your standard deduction? If it is, then your Taxable Income for determining your tax bracket is lower?

              Or was the $104k low due to overtime?

              What I would recommend is 20 percent pretax to your 401k. This will cost you between 14-15 percent post tax. Then put that tax savings into Roth. I personally prefer a Roth IRA in this case, but you could do 5 percent to the 401k on a Roth basis to get some diversification.
              Last edited by queenofthemadhouse on Sun Jun 09, 2024 12:37 am, edited 2 times in total.
              Topic Author
              BettyBon
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              Joined: Mon Mar 25, 2024 3:10 pm

              Re: Roth or not?

              Post by BettyBon »

              Arrrgh, sorry I didn't read my W-2 correctly...

              2023 Taxable Income was $98,852 (Single Filer)

              Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
              State (Missouri) = 4.95% tax bracket on $8,449 or more

              Both of my Fidelity accounts below have not been taxed and Beneficiary is my friend because I have no kids/family.

              $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)

              $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck (employer doesn't offer the FXIFX so I went with the 2030 Target Fund that employer offered even though expense rate is higher)

              Should I stop doing the Roth I just started a couple of weeks ago and just keep doing pre-tax for the entire 19% that is being taken out of my paychecks?
              Topic Author
              BettyBon
              Posts: 21
              Joined: Mon Mar 25, 2024 3:10 pm

              Re: Roth or not?

              Post by BettyBon »

              $104k was incorrect. It was actually over $120k due to overtime and a one-time bonus employer paid to ensure I didn't quit during mass layoffs.
              Going forward, I won't receive any bonuses and no more salary increases in perpetuity.
              I'm just thankful to have a job and the salary I do at my age.
              queenofthemadhouse
              Posts: 346
              Joined: Fri Jun 04, 2021 5:26 pm

              Re: Roth or not?

              Post by queenofthemadhouse »

              BettyBon wrote: Sun Jun 09, 2024 12:32 am Arrrgh, sorry I didn't read my W-2 correctly...

              2023 Taxable Income was $98,852 (Single Filer)

              Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
              State (Missouri) = 4.95% tax bracket on $8,449 or more

              Both of my Fidelity accounts below have not been taxed and Beneficiary is my friend because I have no kids/family.

              $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)

              $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck (employer doesn't offer the FXIFX so I went with the 2030 Target Fund that employer offered even though expense rate is higher)

              Should I stop doing the Roth I just started a couple of weeks ago and just keep doing pre-tax for the entire 19% that is being taken out of my paychecks?
              I would switch it back to traditional, yes. You need more raw dollars in the account. Prepaying taxes is unlikely to be in your favor.

              You will save 27-29 percent now and likely pay less than 20 percent in the future.
              FIRWYW
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              Re: Roth or not?

              Post by FIRWYW »

              BettyBon wrote: Sun Jun 09, 2024 12:32 am Arrrgh, sorry I didn't read my W-2 correctly...

              2023 Taxable Income was $98,852 (Single Filer)

              Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
              State (Missouri) = 4.95% tax bracket on $8,449 or more

              Both of my Fidelity accounts below have not been taxed and Beneficiary is my friend because I have no kids/family.

              $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)

              $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck (employer doesn't offer the FXIFX so I went with the 2030 Target Fund that employer offered even though expense rate is higher)

              Should I stop doing the Roth I just started a couple of weeks ago and just keep doing pre-tax for the entire 19% that is being taken out of my paychecks?
              Yes. 100% should change back to pretax as above. In fact, the additional info you gave after makes pretax even more beneficial. In addition, you can take that tax savings and contribute additional to your 401k if it meets you needs/wants for higher income in retirement. The pretax saves you about $5k taxes each year. You could contribute up to the max 23k with that tax savings vs roth. Gives you about $1k extra per year if retiring at 65
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              FiveK
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              Re: Roth or not?

              Post by FiveK »

              FIRWYW wrote: Sun Jun 09, 2024 12:11 am Current marginal tax rate is....

              Effective tax overall is...in retirement.
              This is not the correct way to evaluate traditional vs. Roth.

              One should compare marginal vs. marginal, not marginal vs. effective. See Traditional versus Roth, particularly Common misconceptions.
              User avatar
              FiveK
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              Re: Roth or not?

              Post by FiveK »

              BettyBon wrote: Sun Jun 09, 2024 12:35 am $104k was incorrect. It was actually over $120k due to overtime and a one-time bonus employer paid to ensure I didn't quit during mass layoffs.
              Unfortunately, "taxable income" can be an ambiguous phrase. Sometimes it refers to what was in your form W-2 box 1, sometimes Adjusted Gross Income (AGI) that was on line 11 of your 2023 form 1040, and sometimes the "taxable income" that was on line 15 of your 2023 form 1040.

              That last version is the one used when it comes to federal tax brackets.

              Can you confirm what applies to your situation?
              smitcat
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              Re: Roth or not?

              Post by smitcat »

              FiveK wrote: Sun Jun 09, 2024 5:35 am
              FIRWYW wrote: Sun Jun 09, 2024 12:11 am Current marginal tax rate is....

              Effective tax overall is...in retirement.
              This is not the correct way to evaluate traditional vs. Roth.

              One should compare marginal vs. marginal, not marginal vs. effective. See Traditional versus Roth, particularly Common misconceptions.
              When comparing traditional vs Roth should you not also include:
              - things like IRMMA and NIT in retirement
              - how the income and holdings affects % and amount of LTG taxes
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended
              User avatar
              FiveK
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              Re: Roth or not?

              Post by FiveK »

              smitcat wrote: Sun Jun 09, 2024 7:23 am When comparing traditional vs Roth should you not also include:
              - things like IRMMA and NIT in retirement
              - how the income and holdings affects % and amount of LTG taxes
              Yes, those all affect your marginal tax rate.
              smitcat
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              Re: Roth or not?

              Post by smitcat »

              FiveK wrote: Sun Jun 09, 2024 7:25 am
              smitcat wrote: Sun Jun 09, 2024 7:23 am When comparing traditional vs Roth should you not also include:
              - things like IRMMA and NIT in retirement
              - how the income and holdings affects % and amount of LTG taxes
              Yes, those all affect your marginal tax rate.
              Thanks - I was adding the other two while you were typing.

              "When comparing traditional vs Roth should you not also include:
              - things like IRMMA and NIT in retirement
              - how the income and holdings affects % and amount of LTG taxes
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended"
              User avatar
              FiveK
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              Re: Roth or not?

              Post by FiveK »

              smitcat wrote: Sun Jun 09, 2024 7:29 am ...
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended"
              Them too. ;)

              In short, anything that affects the marginal tax rate saved on contributions and the marginal tax rate paid on withdrawals. And "marginal tax rate" includes anything that looks, swims, and quacks like a tax, even if not named as a tax, such as IRMAA.
              smitcat
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              Re: Roth or not?

              Post by smitcat »

              FiveK wrote: Sun Jun 09, 2024 7:43 am
              smitcat wrote: Sun Jun 09, 2024 7:29 am ...
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended"
              Them too. ;)

              In short, anything that affects the marginal tax rate saved on contributions and the marginal tax rate paid on withdrawals. And "marginal tax rate" includes anything that looks, swims, and quacks like a tax, even if not named as a tax, such as IRMAA.
              And that is why folks find these 'simple' marginal comparisons so difficult to do.
              If my draw in one example requires selling equities generating LTCG and in the other it does not the marginal rate gets quite complex to calculate.
              Then any results need to be adjusted for potential IRMMA, NIT, taxes on heirs, and state and Fed estate taxes.

              So we prefer the other veiwpoint of comparing any choices by calculating - total after tax 'spendable' dollars without inflation over the entire life of the entire portfolio.
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              FiveK
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              Re: Roth or not?

              Post by FiveK »

              smitcat wrote: Sun Jun 09, 2024 7:52 am
              FiveK wrote: Sun Jun 09, 2024 7:43 am
              smitcat wrote: Sun Jun 09, 2024 7:29 am ...
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended"
              Them too. ;)

              In short, anything that affects the marginal tax rate saved on contributions and the marginal tax rate paid on withdrawals. And "marginal tax rate" includes anything that looks, swims, and quacks like a tax, even if not named as a tax, such as IRMAA.
              And that is why folks find these 'simple' marginal comparisons so difficult to do.
              If my draw in one example requires selling equities generating LTCG and in the other it does not the marginal rate gets quite complex to calculate.
              Then any results need to be adjusted for potential IRMMA, NIT, taxes on heirs, and state and Fed estate taxes.

              So we prefer the other veiwpoint of comparing any choices by calculating - total after tax 'spendable' dollars without inflation over the entire life of the entire portfolio.
              Not following "other viewpoint": it is the difference in marginal tax rates that will determine the after-tax amount, so it seems two ways of saying the same thing.

              Getting the correct answer (even assuming accurate forecasts of future returns, taxes, etc., but that's another topic) requires including all those things, whether to calculate marginal tax rate or to calculate after-tax amounts.
              FIRWYW
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              Re: Roth or not?

              Post by FIRWYW »

              FiveK wrote: Sun Jun 09, 2024 5:35 am
              FIRWYW wrote: Sun Jun 09, 2024 12:11 am Current marginal tax rate is....

              Effective tax overall is...in retirement.
              This is not the correct way to evaluate traditional vs. Roth.

              One should compare marginal vs. marginal, not marginal vs. effective. See Traditional versus Roth, particularly Common misconceptions.
              I was waiting for someone to point out simplified calculation. Is should be marginal in vs marginal out. That was included in the original calculation as well (ie 17% is his marginal at the end, but point is s/he is not even close to the breakeven even if we go 17%. BUT that includes the absolute last dollar contributed and they are still thinking of Roth on the first dollar contributing. Didn’t want to make the conversation more confusing with even more details as details that already don’t apply to him/her was leading them to the wrong action. Conclusion is still the same. . . But you are technically correct).

              Just ran the numbers. If retiring at 65, take home with current savings is still actually at the margin of that 10% federal (ie 15 with state)
              Last edited by FIRWYW on Sun Jun 09, 2024 9:20 am, edited 1 time in total.
              smitcat
              Posts: 13602
              Joined: Mon Nov 07, 2016 9:51 am

              Re: Roth or not?

              Post by smitcat »

              FiveK wrote: Sun Jun 09, 2024 8:07 am
              smitcat wrote: Sun Jun 09, 2024 7:52 am
              FiveK wrote: Sun Jun 09, 2024 7:43 am
              smitcat wrote: Sun Jun 09, 2024 7:29 am ...
              - possible estate/inheritance taxes by State or Fed
              - taxes on heirs if the funds will never be expended"
              Them too. ;)

              In short, anything that affects the marginal tax rate saved on contributions and the marginal tax rate paid on withdrawals. And "marginal tax rate" includes anything that looks, swims, and quacks like a tax, even if not named as a tax, such as IRMAA.
              And that is why folks find these 'simple' marginal comparisons so difficult to do.
              If my draw in one example requires selling equities generating LTCG and in the other it does not the marginal rate gets quite complex to calculate.
              Then any results need to be adjusted for potential IRMMA, NIT, taxes on heirs, and state and Fed estate taxes.

              So we prefer the other veiwpoint of comparing any choices by calculating - total after tax 'spendable' dollars without inflation over the entire life of the entire portfolio.
              Not following "other viewpoint": it is the difference in marginal tax rates that will determine the after-tax amount, so it seems two ways of saying the same thing.

              Getting the correct answer (even assuming accurate forecasts of future returns, taxes, etc., but that's another topic) requires including all those things, whether to calculate marginal tax rate or to calculate after-tax amounts.
              "so it seems two ways of saying the same thing."
              Maybe - but when the discussion comes up on comparing marginal tax rate these things most often are not discussed. Neither are they included on most of the more simple calculators that do these comparisons.
              When we focus on comparing tax rates we tend to 'find' methods to control/reduce taxes
              When we focus on comparing total spendable dollars we tend to find the optimum ways to control that.
              User avatar
              FiveK
              Posts: 16228
              Joined: Sun Mar 16, 2014 2:43 pm

              Re: Roth or not?

              Post by FiveK »

              smitcat wrote: Sun Jun 09, 2024 9:07 am...when the discussion comes up on comparing marginal tax rate these things most often are not discussed. Neither are they included on most of the more simple calculators that do these comparisons.
              Yes. Sometimes "Keep It SImple Stupid" (KISS) applies, but sometimes it doesn't. The personal finance toolbox spreadsheet is one tool for marginal rates that includes all the tax effects mentioned, but some don't want/aren't able to use Excel.
              ThankYouJack
              Posts: 5979
              Joined: Wed Oct 08, 2014 7:27 pm

              Re: Roth or not?

              Post by ThankYouJack »

              FiveK wrote: Sun Jun 09, 2024 9:19 am
              smitcat wrote: Sun Jun 09, 2024 9:07 am...when the discussion comes up on comparing marginal tax rate these things most often are not discussed. Neither are they included on most of the more simple calculators that do these comparisons.
              Yes. Sometimes "Keep It SImple Stupid" (KISS) applies, but sometimes it doesn't. The personal finance toolbox spreadsheet is one tool for marginal rates that includes all the tax effects mentioned, but some don't want/aren't able to use Excel.
              I've found the Personal Finance Toolbox super helpful since I started using it a few years ago.

              Does anyone know who built and maintains it?
              User avatar
              ruralavalon
              Posts: 26750
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              Location: Illinois

              Re: Roth or not?

              Post by ruralavalon »

              BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

              I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
                $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
                  $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

                  Am I too old to do a Roth?
                  If not, should I just make the entire 19% Roth?

                  I really appreciate your thoughts/advice.

                  Thank you!
                  BettyBon wrote: Sat Jun 08, 2024 11:15 pm Whoops! My mistake.

                  2023 Taxable Income was $98,852 (Single Filer)

                  Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
                  State (Missouri) = 4.95% tax bracket on $8,449 or more

                  Thank you

                  More information is needed.

                  Will you be eligible for both a significant pension and Social Security benefits? About how much do you currently have in traditional tax-deferred accounts?

                  Most people (without a pension or very large balances in traditional tax-deferred accounts accounts) will likely be in a lower tax bracket during retirement, so for most people traditional 401k contributions will likely be better.
                  "Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
                  smitcat
                  Posts: 13602
                  Joined: Mon Nov 07, 2016 9:51 am

                  Re: Roth or not?

                  Post by smitcat »

                  FiveK wrote: Sun Jun 09, 2024 9:19 am
                  smitcat wrote: Sun Jun 09, 2024 9:07 am...when the discussion comes up on comparing marginal tax rate these things most often are not discussed. Neither are they included on most of the more simple calculators that do these comparisons.
                  Yes. Sometimes "Keep It SImple Stupid" (KISS) applies, but sometimes it doesn't. The personal finance toolbox spreadsheet is one tool for marginal rates that includes all the tax effects mentioned, but some don't want/aren't able to use Excel.
                  Yes - I eventually figured out exactly what you posted.
                  But at the point that we utilize these more complex methods to just figure taxes we still do not have any focus on optimized drawdown strategy, best charitable approaches, or optimized accounts for heirs.
                  When we utilize the more complex calculators for total returns we get all of the above.
                  User avatar
                  FiveK
                  Posts: 16228
                  Joined: Sun Mar 16, 2014 2:43 pm

                  Re: Roth or not?

                  Post by FiveK »

                  ThankYouJack wrote: Sun Jun 09, 2024 9:25 am
                  FiveK wrote: Sun Jun 09, 2024 9:19 am
                  smitcat wrote: Sun Jun 09, 2024 9:07 am...when the discussion comes up on comparing marginal tax rate these things most often are not discussed. Neither are they included on most of the more simple calculators that do these comparisons.
                  Yes. Sometimes "Keep It SImple Stupid" (KISS) applies, but sometimes it doesn't. The personal finance toolbox spreadsheet is one tool for marginal rates that includes all the tax effects mentioned, but some don't want/aren't able to use Excel.
                  I've found the Personal Finance Toolbox super helpful since I started using it a few years ago.

                  Does anyone know who built and maintains it?
                  Case Study Spreadsheet updates is where I first saw it online.
                  smitcat
                  Posts: 13602
                  Joined: Mon Nov 07, 2016 9:51 am

                  Re: Roth or not?

                  Post by smitcat »

                  ruralavalon wrote: Sun Jun 09, 2024 9:29 am
                  BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

                  I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
                    $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
                      $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

                      Am I too old to do a Roth?
                      If not, should I just make the entire 19% Roth?

                      I really appreciate your thoughts/advice.

                      Thank you!
                      BettyBon wrote: Sat Jun 08, 2024 11:15 pm Whoops! My mistake.

                      2023 Taxable Income was $98,852 (Single Filer)

                      Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
                      State (Missouri) = 4.95% tax bracket on $8,449 or more

                      Thank you

                      More information is needed.

                      Will you be eligible for both a significant pension and Social Security benefits? About how much do you currently have in traditional tax-deferred accounts?

                      Most people (without a pension or very large balances in traditional tax-deferred accounts accounts) will likely be in a lower tax bracket during retirement, so for most people traditional 401k contributions will likely be better.
                      "for most people traditional 401k contributions will likely be better."
                      Except for...
                      - low spenders
                      - folks with deferred pay/RSU's
                      - many small business owners
                      - inheritances
                      - pensions (as you mentioned above)
                      - over saving in 401K (as you say above)
                      -
                      User avatar
                      ruralavalon
                      Posts: 26750
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                      Location: Illinois

                      Re: Roth or not?

                      Post by ruralavalon »

                      smitcat wrote: Sun Jun 09, 2024 9:53 am
                      ruralavalon wrote: Sun Jun 09, 2024 9:29 am
                      BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

                      I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
                        $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
                          $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

                          Am I too old to do a Roth?
                          If not, should I just make the entire 19% Roth?

                          I really appreciate your thoughts/advice.

                          Thank you!
                          BettyBon wrote: Sat Jun 08, 2024 11:15 pm Whoops! My mistake.

                          2023 Taxable Income was $98,852 (Single Filer)

                          Federal = 24% tax bracket on $95,376 to $182,100 Taxable Income
                          State (Missouri) = 4.95% tax bracket on $8,449 or more

                          Thank you

                          More information is needed.

                          Will you be eligible for both a significant pension and Social Security benefits? About how much do you currently have in traditional tax-deferred accounts?

                          Most people (without a pension or very large balances in traditional tax-deferred accounts accounts) will likely be in a lower tax bracket during retirement, so for most people traditional 401k contributions will likely be better.
                          "for most people traditional 401k contributions will likely be better."
                          Except for...
                          - low spenders
                          - folks with deferred pay/RSU's
                          - many small business owners
                          - inheritances
                          - pensions (as you mentioned above)
                          - over saving in 401K (as you say above)
                          -

                          I agree that many small businesses owners, and employees with large deferred compensation will also be exceptions to the general rule for "most people".
                          "Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
                          User avatar
                          teen persuasion
                          Posts: 2390
                          Joined: Sun Oct 25, 2015 1:43 pm

                          Re: Roth or not?

                          Post by teen persuasion »

                          FIRWYW wrote: Sun Jun 09, 2024 12:11 am OP:
                          I 100% think Roth is the wrong thing for you after doing calculations. From what you wrote, I assumed everything you currently have saved is in pre-tax. I assumed that you work until 65 but I am happy to change the numbers in my spreadsheet if you are planning to work longer. You said $104k pay, 19% contribution rate ($19,760/yr). I did not see if your employer matches but I believe that would Not change my calculations much for you.


                          Current marginal tax rate is 29% (fed+state)

                          60% stock portfolio
                          Assuming average long term returns and inflation (optomistic in my opinion), that gives you $906k at 65. If ALL pretax, at 4% SWD rate, that is $36.2k/yr.

                          Minus the 14,600 standard single deduction leaves you with $21,650 taxable income.

                          $11,600 will be taxed at 10%+ state (I will assume that is a flat 5%) = 15% tax on that portion

                          $10,050 will be taxed at 12+5=17%
                          Effective tax overall is approximate $3450/yr or 3450/36200= 9.5% taxes in retirement.

                          A saving of 29% now vs 9% tax in retirement is huge.
                          You are not going to reach the threshold where social security gets taxed. You are not even close to IRMAA.

                          If I change retirement age to 70, the expected 4% SWR is still only about $51k. Which is $36,400 taxable which is still going to be a really low rate, avoid SS taxation and IRMAA.

                          In short, unless there is something HUGE I missed in your original post, there is no question that pre-tax, traditional 401k is the best choice
                          You are not going to reach the threshold where social security gets taxed.

                          How do you figure OP won't reach the threshold where SS get taxed?

                          No idea what OP's SS might be, but if it is, say, $30k, and we use your $36k RMD number, provisional income would be:
                          (30k/2) + 36k = 51k

                          SS taxation for singles looks at the breakpoints of $25k & $34k, so
                          (0 * 25k) + ((34k-25k)*.5) + ((51k-34k)*.85)
                          = 4500 + 14,450
                          = 18,950 taxable SS

                          And of course, those SS breakpoints are fixed and not adjusted for inflation, so the amount of taxable SS will likely increase as all the other inputs to the formula increase with inflation.
                          Dpmbball
                          Posts: 129
                          Joined: Fri Apr 19, 2024 3:50 pm

                          Re: Roth or not?

                          Post by Dpmbball »

                          tibbitts wrote: Sat Jun 08, 2024 11:55 pm
                          Dpmbball wrote: Sat Jun 08, 2024 11:35 pm
                          BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

                          I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
                            $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
                              $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

                              Am I too old to do a Roth?
                              If not, should I just make the entire 19% Roth?

                              I really appreciate your thoughts/advice.

                              Thank you!
                              Do you want to pass on anything to others? If Yes I believe a Roth is better to leave behind than T- IRA/401k
                              It might depend on what tax bracket the 10-year distribution would leave the beneficiaries in. And if "others" are charities then there would be no tax on distributions.
                              My point is with a Roth there are never forced distributions so it’s never a tax burden
                              tibbitts
                              Posts: 24490
                              Joined: Tue Feb 27, 2007 5:50 pm

                              Re: Roth or not?

                              Post by tibbitts »

                              Dpmbball wrote: Sun Jun 09, 2024 12:12 pm
                              tibbitts wrote: Sat Jun 08, 2024 11:55 pm
                              Dpmbball wrote: Sat Jun 08, 2024 11:35 pm
                              BettyBon wrote: Fri Jun 07, 2024 3:41 pm I'll be 59 years old soon and clueless about investing.

                              I recently cancelled my financial advisor of less than 1 year (1.22% fee) and now have the following Target Funds...
                                $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made)
                                  $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, fund offered by employer, 19% taken out each paycheck with 9% going to Roth I just opened a couple weeks ago)

                                  Am I too old to do a Roth?
                                  If not, should I just make the entire 19% Roth?

                                  I really appreciate your thoughts/advice.

                                  Thank you!
                                  Do you want to pass on anything to others? If Yes I believe a Roth is better to leave behind than T- IRA/401k
                                  It might depend on what tax bracket the 10-year distribution would leave the beneficiaries in. And if "others" are charities then there would be no tax on distributions.
                                  My point is with a Roth there are never forced distributions so it’s never a tax burden
                                  There is a forced distribution to heirs but it's not taxable (until the distribution results in earnings of course.) I was just saying that the impact on heirs of Roth vs. deferred would depend on their tax situation.
                                  Topic Author
                                  BettyBon
                                  Posts: 21
                                  Joined: Mon Mar 25, 2024 3:10 pm

                                  Re: Roth or not?

                                  Post by BettyBon »

                                  I'm embarrassed at how uneducated I am with my retirement savings and giving you incorrect (guesstimate) and incomplete info. My sincere apologies.

                                  I'm amazed and grateful that so many Bogleheads take the time to respond, share their expertise, and help educate people like me. Thank you!

                                  Now you see why I've always done Target Funds and attempted to hire a financial advisor which turned out to be a costly decision and I cancelled the advisor after less than 1 year and later found out he left the company "abruptly" under unknown circumstances but wasn't surprised after the nonexistent bizarre relationship I had with him.

                                  Fun fact: When I completed what I incorrectly assumed was a confidential customer survey that was emailed to me and said I hoped to educate myself better to avoid 1.22% financial advisor fees, the financial advisor called me ranting that my comment will affect "his" bonus and instructed me not to say things like that on future surveys.

                                  I told him that they shouldn't send their paying clients a survey if they don't want honest answers and terminated his services after he went AWOL and no one on his team/office informed me that he left the company until I called asking why he was a no-show for our scheduled phone appt.

                                  I do have a small pension from a previous employer that the financial advisor wanted me to put towards the larger IRA he was managing but I refused and left untouched in the pension...

                                  Age 62
                                  $499.35 (monthly)
                                  $80,350.26 (lump sum)

                                  Age 65
                                  $595.00 (monthly)
                                  $90,386.00 (lump sum)

                                  The social security statement I printed in January shows monthly retirement benefits of...

                                  $2,141 (age 62)
                                  $2,289 (age 63
                                  $2,450 (age 64)
                                  $2,663 (age 65)
                                  $2,878 (age 66)
                                  $3,092 (age 67)
                                  etc. (I don't know when I'll retire and hope to keep working & continue saving for retirement as long as I can until my body gives out. LOL)

                                  I have zero debt, no kids (heirs), no family (no inheritance), so my beneficiary on my money & 1 bed condo (no mortgage) is my best friend who is a retired government worker with great pension so they don't even need my money.

                                  I pulled my taxes from last year...

                                  $108,176 Federal adjusted gross income
                                  $94,326 Federal taxable income
                                  $93,523 State taxable income
                                  $123,182 Gross wages (W-2)
                                  $ 98,851 Wages (W-2)
                                  $120,245 (Social Security/medicare wages, W-2)

                                  I need to decide whether to leave the following "as is" or after reading some of your comments, I'm assuming I should cancel the Roth?

                                  $447,000 in FXIFX (0.12 expense ratio, rollover IRA, no contributions being made, this is what the terminated financial advisor was managing)

                                  $110,000 in FID FRDM BLND 2030 T (0.20 expense ratio, target fund offered by employer since they don't offer the FXIFX, 19% taken out each paycheck with 9% of that going to new Roth I just opened a couple weeks ago

                                  At my company, employees only receive a Matching Contribution equal to 50% of the first 6%.

                                  As clueless as I am, once I'm closer to retirement, I will probably hire a CPA or advisor at an hourly rate to walk me through tax implications, distributions, etc. vs. hiring a financial advisor charging a percentage since I had such an unpleasant experience.

                                  Thank you
                                  sailaway
                                  Posts: 8636
                                  Joined: Fri May 12, 2017 1:11 pm

                                  Re: Roth or not?

                                  Post by sailaway »

                                  Have you considered making a charity your beneficiary?
                                  Topic Author
                                  BettyBon
                                  Posts: 21
                                  Joined: Mon Mar 25, 2024 3:10 pm

                                  Re: Roth or not?

                                  Post by BettyBon »

                                  Charity = good idea!
                                  tibbitts
                                  Posts: 24490
                                  Joined: Tue Feb 27, 2007 5:50 pm

                                  Re: Roth or not?

                                  Post by tibbitts »

                                  BettyBon wrote: Sun Jun 09, 2024 8:22 pm As clueless as I am, once I'm closer to retirement, I will probably hire a CPA or advisor at an hourly rate to walk me through tax implications, distributions, etc. vs. hiring a financial advisor charging a percentage since I had such an unpleasant experience.
                                  In my case I made mistakes in the last few years prior to retirement that have cost me, so I'm not sure I'd suggest waiting until after retirement if you're going to hire someone. You may not have to revisit your plan later until/unless some unexpected changes occur (tax laws, your employment situation, etc.)

                                  But I completely understand being reluctant due to the usual negative experiences reported here.
                                  FIRWYW
                                  Posts: 415
                                  Joined: Thu Dec 23, 2021 8:11 am

                                  Re: Roth or not?

                                  Post by FIRWYW »

                                  teen persuasion wrote: Sun Jun 09, 2024 12:00 pm
                                  FIRWYW wrote: Sun Jun 09, 2024 12:11 am OP:
                                  I 100% think Roth is the wrong thing for you after doing calculations. From what you wrote, I assumed everything you currently have saved is in pre-tax. I assumed that you work until 65 but I am happy to change the numbers in my spreadsheet if you are planning to work longer. You said $104k pay, 19% contribution rate ($19,760/yr). I did not see if your employer matches but I believe that would Not change my calculations much for you.


                                  Current marginal tax rate is 29% (fed+state)

                                  60% stock portfolio
                                  Assuming average long term returns and inflation (optomistic in my opinion), that gives you $906k at 65. If ALL pretax, at 4% SWD rate, that is $36.2k/yr.

                                  Minus the 14,600 standard single deduction leaves you with $21,650 taxable income.

                                  $11,600 will be taxed at 10%+ state (I will assume that is a flat 5%) = 15% tax on that portion

                                  $10,050 will be taxed at 12+5=17%
                                  Effective tax overall is approximate $3450/yr or 3450/36200= 9.5% taxes in retirement.

                                  A saving of 29% now vs 9% tax in retirement is huge.
                                  You are not going to reach the threshold where social security gets taxed. You are not even close to IRMAA.

                                  If I change retirement age to 70, the expected 4% SWR is still only about $51k. Which is $36,400 taxable which is still going to be a really low rate, avoid SS taxation and IRMAA.

                                  In short, unless there is something HUGE I missed in your original post, there is no question that pre-tax, traditional 401k is the best choice
                                  You are not going to reach the threshold where social security gets taxed.

                                  How do you figure OP won't reach the threshold where SS get taxed?

                                  No idea what OP's SS might be, but if it is, say, $30k, and we use your $36k RMD number, provisional income would be:
                                  (30k/2) + 36k = 51k

                                  SS taxation for singles looks at the breakpoints of $25k & $34k, so
                                  (0 * 25k) + ((34k-25k)*.5) + ((51k-34k)*.85)
                                  = 4500 + 14,450
                                  = 18,950 taxable SS

                                  And of course, those SS breakpoints are fixed and not adjusted for inflation, so the amount of taxable SS will likely increase as all the other inputs to the formula increase with inflation.
                                  (Insert your appropriate expletive here to myself). :) The fact that SS tax threshold is not indexed to inflation is a point that I always forget for lower income individuals/lower saving individuals. I always assume 85% taxation for myself. Once again humbled on bogleheads and stand corrected on that point. (Guess I should also avoid posting at midnight when I am awake only b/c I can’t sleep and mind is not clear)
                                  Topic Author
                                  BettyBon
                                  Posts: 21
                                  Joined: Mon Mar 25, 2024 3:10 pm

                                  Re: Roth or not?

                                  Post by BettyBon »

                                  I've read all of your responses. Thank you!
                                  So I should cancel the Roth I just started and continue doing pre-tax, correct?
                                  queenofthemadhouse
                                  Posts: 346
                                  Joined: Fri Jun 04, 2021 5:26 pm

                                  Re: Roth or not?

                                  Post by queenofthemadhouse »

                                  Yes. The likelihood that your federal marginal rate will be over 12 percent (15 percent after 2025) is pretty low.
                                  User avatar
                                  vnatale
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                                  Location: Montague, MA

                                  Re: Roth or not?

                                  Post by vnatale »

                                  Additional benefits of Roth accounts:

                                  1) Not subject to Required Minimum Distributions

                                  2) Reduces probabilities you will have to pay surcharges for Medicare

                                  3) Reduces possibility of having to have highest percentage - 85% - of Social Security income subject to taxation.
                                  Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
                                  Post Reply