Some background:
Age: 52, hope to retire around age 60
Current retirement savings: A little bit more than $1 million, 75% stock index, 25% bond index, half in tax-deffered 403(b) and half in employer defined contribution pension plan.
Total household retirement investments (i.e., including spouse's savings): $1.8 million, of which ~$200,000 are in Roth accounts.
Additional assets: Rental real estate that generates about $40,000 net income annually.
For the past 25 years, all of my 403b contributions have been invested in my employer-sponsored tax-deferred account, because I didn't know I had the option of contributing the funds instead to a Roth account. Now I know.
An online calculator (https://www.empower.com/learning_center ... th.shtml#/) suggests that, under all reasonable assumptions, I will save more in taxes by allocating future 403b contributions to the Roth rather than to a tax-deferred account. Does this sound right? I assume that my marginal tax bracket in retirement will be the same as it is currently, though if I do end up retiring early there may be a few years early on when our tax bracket will be lower because we would live mostly off of savings rather than income.
Thanks.
Age: 52, hope to retire around age 60
Current retirement savings: A little bit more than $1 million, 75% stock index, 25% bond index, half in tax-deffered 403(b) and half in employer defined contribution pension plan.
Total household retirement investments (i.e., including spouse's savings): $1.8 million, of which ~$200,000 are in Roth accounts.
Additional assets: Rental real estate that generates about $40,000 net income annually.
For the past 25 years, all of my 403b contributions have been invested in my employer-sponsored tax-deferred account, because I didn't know I had the option of contributing the funds instead to a Roth account. Now I know.
An online calculator (https://www.empower.com/learning_center ... th.shtml#/) suggests that, under all reasonable assumptions, I will save more in taxes by allocating future 403b contributions to the Roth rather than to a tax-deferred account. Does this sound right? I assume that my marginal tax bracket in retirement will be the same as it is currently, though if I do end up retiring early there may be a few years early on when our tax bracket will be lower because we would live mostly off of savings rather than income.
Thanks.
Statistics: Posted by Schooly D — Sat Jan 04, 2025 2:05 pm — Replies 1 — Views 47