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You can’t possibly have a bunch of clients who you have gone through this cycle with since you aren’t a vampire and thus are aging as they age.
lol, that is really funny. What I said was that few people have the discipline to fund the taxes for later drawdown. That is my experience bwah ha ha ha haaaa
fear of tax changes is a bad method.
I agree. That is not my method, either. We all must base our advice and decisions upon current knowns and make our best guesses about future unknowns. I'm not even sure we can call them educated guesses. I base my recommendations upon the following:
- Roth IRAs, imo, will not be available in the future, at least in the current form
- Few people segregate and invest the tax savings from 401k and other tax-deductible contributions to pay future tax liabilities on said deductions and the growth thereon
- Too many unknowns affecting any one individual's future tax rates at drawdown. I prefer to be conservative and overestimate rather than underestimate tax liability.
I happen to believe that savings in Roth IRAs up to a certain point will never be taxed i.e. that the government will notify taxpayers and their advisers that taxation will be phased in over a certain period beginning at x date in the future for x taxpayers (based on certain parameters) but obviously that is my personal speculation. Only time will tell.
Of course, our clients are free to disagree and we have this discussion - how much to fund pre-tax and how much to fill the Roth portion of their 401k when we are fleshing out tax planning. I am not the dictator, merely the advisor.
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