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  • #16
    Originally posted by CordMcNally View Post
    A lot is just a guess based on what your future tax brackets will look like among other things. I don’t know how much you’re spending now or how much you plan to spend in retirement but I’d guess either way you’re going to be fine. You won’t know what the ‘correct’ decision was until it’s passed.
    Thank you for your reply.

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    • #17
      Originally posted by ImpalerMD View Post

      Don’t “need” the family contributions but since our family decided to contribute definitely not going to turn it down! Please see the revised post regarding the savings rate. Also 22% is not low…and you did not address the initial question.
      i personally would turn down any such contributions with that income. the savings rate seems low to me. i don't think it really matters with regards to roth 401K vs 401K.

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      • #18
        Originally posted by fatlittlepig View Post

        i personally would turn down any such contributions with that income. the savings rate seems low to me. i don't think it really matters with regards to roth 401K vs 401K.
        Thanks for your input. This thread is not about 529s but I do respect your thoughts on that.

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        • #19
          Originally posted by ImpalerMD View Post

          I did not ask for your opinion regarding what you think is a good spending rate and a good savings rate. I’m not sure if you’re jealous or feel inadequate in some way but that was not my intention - and for that I apologize because it is clearly bothering you and you are neglecting to answer the question here. I simply asked about whether or not a Roth 401k vs a tax-advantaged 401k is more beneficial in a particular scenario. Regardless of your personal and/or emotional attachments to this thread, thank you for your input. I wish you the best of luck going forward and may you find peace.
          Certainly not jealous or feeling inadequate. Funny what you think you can surmise about a stranger from whom you are soliciting advice on the internet.

          Clearly you have the emotional attachment—what I’ve been telling you is patently true, nothing more nothing less, and whether you accept that is up to you.

          Don’t ask for advice if you aren’t ready to receive it.

          Regarding your initial 401(k) question—I literally answered it in my very first reply…

          C’mon, man.

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          • #20
            As I understand it, you are worried about having an RMD problem when you reach 70.5 or whatever the age is in 30+ years. Whether you are saving $200k or $400k doesn't have much impact on that since you only have so much tax-deferred space. I suspect Spiritrader asked about the number of 401ks for that reason. How generous are your employer matches? Even with inflation I think employers can only match contributions up to a salary of $305,000 this year. If you each have one 401k (or 403b since you have access to 457s) with a super-generous 10% match that would be (20,500+30,500) x 2 = $102,000/year. 30 years earning a rate of 6% real (inflation adjusted) gets you to around $9 million with an RMD of $360k. With the usual caveats that no one can predict tax rates or brackets at that time you're looking at the 32% bracket. Again, this is assuming a stellar match and an excellent real return. If the match is smaller (say total of $84k/year) and the real rate is 5% now your RMDs are around $250k and you're in the 24% bracket.

            The 457s are harder to account for since you have to start taking contributions once you stop working but will also have less in them because there is no match. If you start drawing from them in your 60s you may even decide to take out more than the minimum to fill your lower tax brackets (in addition to making Roth conversions if they are still allowed).

            My take home is that mathematically you are very likely better off doing traditional 401k and taking the tax break now. Having said that, if you want to hedge your bets and increase your Roth bucket then go for it. I would favor the half and half approach. Just recognize that you are hedging against changes in tax rates, etc and that you are perhaps more likely to be wrong than right (but that won't matter either way). Please check out the WCI podcast on RMDs for more info.

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