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Personal Finance (Not Investing) • Re: Not seeing the value in maxing 401k

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Now that we are north of 59.5, we really see the advantage of doing things that way. In the years leading up to 59.5, by maxing the 401k, it created taxable income space to do Roth conversions (we also had tIRAs). Now north of 59.5, retirement accounts are no longer for the future, they're for now. A dollar in Roth is always worth more than a dollar in taxable. And also important, money in Roth lets us uncouple cash flow from taxable income. We control taxable income with Roth conversions. Cash beyond SS and pensions comes from Roth IRAs. That way, a sudden need for cash should never cause undesired taxable income. We keep clear of IRMAA with very strong taxable income control.
Sorry but your post went above my head, do you mean to say you see the advantage of making contributions to a taxable brokerage last, as a good thing?
Yes, provided you have enough to make it to 59.5, the more in retirement accounts the better. Tax deferral (tIRAs and regular 401ks) are good, tax free (Roth IRAs and 401ks) are even better.

Statistics: Posted by lstone19 — Sun Oct 06, 2024 11:05 pm



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