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re: I don't understand the love for Roth IRAs
Posted on 3/27/23 at 5:35 am to UpstairsComputer
Posted on 3/27/23 at 5:35 am to UpstairsComputer
quote:
Bruh, you saying you can name one couple making $30k a month now that’s gonna be cool living on 6k a month in retirement?
Never said that. You're making a lot of assumptions you don't realize here.
Just because someone is in a certain bracket does not in any way mean they are spending every dollar they bring home.
Also, if someone is living on $30k/month while working, some of those expenses will go away (or more importantly COULD go away if they need to cut expenses) in retirement (college savings, retirement savings, non-retirement savings, mortgage hopefully, etc.).
Lastly, once they retire, they should have built up a chunk of non-retirement assets to pull from before being required to take RMDs. Non-retirement assets can be invested very tax-efficiently and don't generate any ordinary income when distributed for living needs. You just need to be careful of interest, dividends, and cap gains on sales.
Once RMDs start, their tax bracket may go back up slightly, but in most cases not anywhere close to what they were in their earning years.
NOTE: These circumstances vary greatly depending on what assets the investor is living on - rental income from 4 different properties, for example, would complicate/negate the situation described above.
Posted on 3/27/23 at 5:56 am to Niner
I can say I don’t quite make that a month but there is no way in hell it’s a lifestyle. I live in the highest cost of living area in the country (top 3). I have a large house, two kids in private school and money flows out like a waterfall here.
I will move back south as soon as I hit that resignation button in 15 years. I won’t have a huge mortgage, no kids in private school or college and will be only supporting myself and my wife if she decides to move back south with me. Otherwise I’ll be supporting my wife (see what I did there).
Big assumption that somebody making great money isn’t going to 100% have a different lifestyle in retirement. Yes that is a general statement as some have a lifestyle they currently support through debt and probably won’t adjust in retirement but a lot of us will make huge adjustments (not sacrifices) in retirement.
I will move back south as soon as I hit that resignation button in 15 years. I won’t have a huge mortgage, no kids in private school or college and will be only supporting myself and my wife if she decides to move back south with me. Otherwise I’ll be supporting my wife (see what I did there).
Big assumption that somebody making great money isn’t going to 100% have a different lifestyle in retirement. Yes that is a general statement as some have a lifestyle they currently support through debt and probably won’t adjust in retirement but a lot of us will make huge adjustments (not sacrifices) in retirement.
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