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  • #16
    Originally posted by Hatton View Post

    Tim this not why I paid cash for my house.
    I have not idea exactly why you did it. I do know that you could do it with room to spare! You are much smarter than me!

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    • #17
      How much do you have in each bucket (Roth, tax deferred, taxable) now? How much do you contribute to taxable with your current plan. If you use Roth 401k your take home pay will decrease by about 5k/year (maybe more depending on your state taxes)—will that come from your spending or will you put less in taxable or something else? Do you plan to do Roth conversions once you retire?

      20k/year into Roth is a fairly arbitrary goal, is there a reason you picked that? The answer to all these questions will help your decision.

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      • #18
        Originally posted by Dewangski1 View Post
        Do you have a tax deferred option like a traditional 401k? Sorry if I’m confused, but I would be maximizing this space before any nondeductible account. A few others things one to mind as well - 1.) as you push through your 24% bracket, you can use tax deferred to bring you back down, 2.) just because you see a lot of posts here about managing RMDs with traditional 401s doesn’t mean you should avoid one and there’s value in having different piles of money with different tax implications, 3.) retirement accounts make you wait until 59.5 to access the money, while taxable is at your disposal at any age if you plan on FIRE, and 4.) speaking of speculating on changes that could eventually occur, the rules around a Roth IRA could also change. I guess my take home would be not to over index on a Roth. Ideally, I’d like to have a few million in each spot - taxable, Roth and tax deferred
        I have a sizeable tax deferred 401k >1m I have about 200k in a roth, only 80k in brokerage. I think if legislation passed I want to max out Roth 401k since that is my only Roth option at that point. Employer Puts
        in >20k per yr which is tax deferred. I really want to build up the taxable account.

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        • #19
          Originally posted by Pmrdoc46 View Post

          I have a sizeable tax deferred 401k >1m I have about 200k in a roth, only 80k in brokerage. I think if legislation passed I want to max out Roth 401k since that is my only Roth option at that point. Employer Puts
          in >20k per yr which is tax deferred. I really want to build up the taxable account.
          Nice stash in tax deferred. Honestly, I’d focus on tax deferred and taxable. Can always work on Roth later and last, when rules are clear and more likely to apply to you.

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          • #20
            Originally posted by spiritrider View Post
            I think we go back to before the Backdoor Roth became available in 2010 and the ability to distribute just the employee after-tax contributions and earnings from IRS Notice 2014-54. I just realized how short a time these have been available. For some reason it has seemed like it has been status quo for a long time.

            On an overall basis, Non-deductible traditional IRA contributions and employee after-tax contributions will generally only make sense if you have insufficient tax-advantaged space to place the tax-inefficient components of your asset allocation. Otherwise, you would be better off making tax-efficient taxable investments.
            But it was around 2006 when the legislation was passed that telegraphed the ability to do backdoor Roths regardless of income beginning in 2010, so a decade and a half total...

            It seems like some of the proposed plans to respond to this legislation are like tax tail wagging investment dog. For backdoor not mega backdoor, it doesn't seem like it should change hardly anyone's strategy.

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            • #21
              Originally posted by Anne View Post
              How much do you have in each bucket (Roth, tax deferred, taxable) now? How much do you contribute to taxable with your current plan. If you use Roth 401k your take home pay will decrease by about 5k/year (maybe more depending on your state taxes)—will that come from your spending or will you put less in taxable or something else? Do you plan to do Roth conversions once you retire?

              20k/year into Roth is a fairly arbitrary goal, is there a reason you picked that? The answer to all these questions will help your decision.
              Anne I saw a hourly cfp and he suggested I invest that amount into a Roth to get that bucket bigger

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