What bracket are you projecting in retirement? I have a hard time believing An extra $61k into traditional 401ks each year for 10 years is going to make that much difference for RMDs especially if you have ~10 years to draw them down/convert to Roth before RMDs kick in. 37% differed tax rate would be tough to pass up.

If you're facing top marginal rate today anyway couldnt you just take a huge withdrawal in one year just before Medicare eligibility (I think IRMAA is a 2 year look back at MAGI so might need to pull it a couple years sooner.) That way you dont lock in top marginal rate in case drawdown strategy can reduce tax rate. Of course there is risk the top marginal rate is higher by then.

You're in the top bracket, really? $647,851+ after deductions?

This post was edited on 4/4/24 at 12:10 pm

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Posted by FortunateSon

Tennessee

Member since Apr 2024

19 posts

Posted on 4/4/24 at 12:13 pm to TorchtheFlyingTiger

quote:
What bracket are you projecting in retirement?

Using today's numbers, probably the 32% bracket, maybe 35%. This is not factoring in any conversions.

quote:
I have a hard time believing An extra $61k into traditional 401ks each year for 10 years is going to make that much difference for RMDs especially if you have ~10 years to draw them down/convert to Roth before RMDs kick in

I have thought that as well. Although I admittedly haven't paid attention to my entire retirement like I should have. When my FA modeled our RMD years, my opinion changed. This is because our 401K balances will likely be much higher than today and therefore the RMDs would trigger a gigantic tax bill. Couple that with the benefit that Roth provides our heirs, it seems like a worthy idea to consider.

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