The reason the tax differed is so important is because you lose the earnings on the tax paid forever.I've posted this in other threads but one often overlooked reason for having money in Roth IRAs is it lets you uncouple cash flow from taxable income. We have enough in Roth now that we have a sudden need for a lot of cash, it can be taken from Roths without impacting taxable income. Currently, we convert each year to bring taxable income to just short of the first IRMAA tier. We have no expectation of being in a lower tax bracket later nor do we expect our son (our only heir) to be in a lower tax bracket (particularly with the ten-year requirement he'll be under) so we see no benefit to further deferring taxes.
I think too many people focus on not paying taxes this year as if they'll magically go away in the future if you don't while I'd rather focus on minimizing taxes over time which means paying some now. And for our financial planning, all t-IRA money is discounted by the expected future tax load so it's not like paying taxes now changes what I consider to be our net worth (which I suspect figures into some people's thinking. They haven't discounted t-IRA money by the future tax load so they see paying taxes as an unneeded expense that reduces their net worth).
Statistics: Posted by Cah — Sat Sep 28, 2024 9:20 pm