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View Poll Results: At the time you retire(d) what percent of your investable nest egg was in after-tax investments (NOT
< 5% 8 5.26%
5-10% 10 6.58%
6-20% 28 18.42%
21-50% 41 26.97%
51-75% 36 23.68%
76-100% 29 19.08%
Voters: 152. You may not vote on this poll

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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 02:48 PM   #21
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Re: How much of your nest egg is after-tax money?

We are at the lower end of the scale, approx. 10% due to our circumstances. Moving between countries made it hard and as we always knew we would be retiring to Australia where withdrawal from retirement funds is not allowed under any circumstances before you hit 62, we figured we would just suck it up and pay tax as we go.


The good news for us is as early retirees we will have access to the majority of our money, without incurring any penalties.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 03:16 PM   #22
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Re: How much of your nest egg is after-tax money?

35% in After tax buckets. This includes cash too. My after tax started out as a "training wheels" for getting into the equities market. I never dreamed it would be worth what it is today (especially with some of the hits it took in 1999-2002. Wall Street giveith and Wall Stree taketh away.

The after tax bucket is our bridge to age 60 to not get locked into the 72(t) restrictions. We will also rebalance over then next couple of years once our income level goes down after ER to limit taxes as much as possible.

The was always to have an income stream from the after tax assets to carry over until we can tap our IRAs from our 401K rollovers.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:09 PM   #23
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Re: How much of your nest egg is after-tax money?

I'm at about 27% in after tax money. Since I spent almost 30 years working for a company that provided both a pension plan and a 401-k plan, I'm surprised that the percentage is actually that high.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:25 PM   #24
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Re: How much of your nest egg is after-tax money?

1/3 in after tax account

2/3 in tax deferred accounts
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:29 PM   #25
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Re: How much of your nest egg is after-tax money?

65% .Thanks to some smart stock picks.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:33 PM   #26
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Re: How much of your nest egg is after-tax money?

About 18% is pretax in a 401k, the rest post tax. Some bad investments in the 401k. And our old plan, before I undertook to change providers when I was in managment, had a lot of crappy choices. We also took some money out to invest in real estate and the real estate did well. Only in the last few years have I been dumping the maximum into the 401k.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:40 PM   #27
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Re: How much of your nest egg is after-tax money?

I am at about 24% tax deferred in IRAs and 401(k). I just semi-FIREd.

I maxed out the 401(k) pretty much my whole career, and also put some money in non-deductible IRA and ROTH when I was eligible, but that career was only about 12 years long.

I also have some 3%+ real I-bonds in taxable that are basically the same thing as tax deferred since I won't need to cash them out until I am in my mid-60s.

I keep all of my tax deferred in bonds. And most of my taxable account is in equities. This is very tax efficient.

I am hoping to avoid 72(t) altogether, and have about 50/50 post/pre tax split at age 60.

Kramer
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 06:48 PM   #28
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Re: How much of your nest egg is after-tax money?

> 90% post tax. There always seemed to be barriers to how much we could put away pre-tax. Couldn't add to IRAs because of 401K. Limited to amount we could put in 401K annually because we were "highly compensated". I suppose that's a good problem to have but I remember how frustrating it was at the time.

Of course it was my post-tax investments (company stock, stock options) that really paid off.....

Audrey
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 07:46 PM   #29
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Re: How much of your nest egg is after-tax money?

I'm feeling "poor" with all my qualified money.

It really does raise important questions about how applicable the oft-flaunted "benchmark" numbers are: the retiree's portfolio really needs to be significantly larger for the high pre-tax crowd than for the high post-tax savers. Good to keep in mind when mentally comparing your plans and experience vis-a-vis others on the board. It's a big "separator" if you don't adjust accordingly.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 08:19 PM   #30
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Re: How much of your nest egg is after-tax money?

33%
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 08:34 PM   #31
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Re: How much of your nest egg is after-tax money?

I'm 60% post tax. I try to put stocks in post-tax. While bonds/fixed income goes in pre-tax.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 08:42 PM   #32
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Re: How much of your nest egg is after-tax money?

21% in pre-tax 401k account.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 08:45 PM   #33
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Re: How much of your nest egg is after-tax money?

Quote:
Originally Posted by Rich_in_Tampa
I'm feeling "poor" with all my qualified money.

It really does raise important questions about how applicable the oft-flaunted "benchmark" numbers are: the retiree's portfolio really needs to be significantly larger for the high pre-tax crowd than for the high post-tax savers. Good to keep in mind when mentally comparing your plans and experience vis-a-vis others on the board. It's a big "separator" if you don't adjust accordingly.
I'm not sure I follow your logic. You'll only get taxed once when you withdraw. Those with taxable portfolios get taxed on every reinvested dividend or interest and on the gains after a sale, as well as on the originally invested income.
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 09:44 PM   #34
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Re: How much of your nest egg is after-tax money?

~20% in taxable accounts at present.

In the early retirement years while we're drawing down the taxable $$ we'll convert t-IRA's to Roth's to the top of the 15% bracket, perhaps deferring the start of SS to do more conversions (depending on SS regs & tax laws at the time)

Having a high % in tex-advantaged accounts gives us more flexibility in portfolio construction and rebalancing than we'd have otherwise. We hold total markets & tax-managed Int'l in the taxable accounts, and have numerous less tax-efficient asset classes and rebalance within the tax-advantaged accounts.

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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 10:46 PM   #35
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Re: How much of your nest egg is after-tax money?

i'm at about 20% in inherited ira, tira & roth combined. i started converting the tira to roth, while staying within the 15% bracket. but i really have no idea what i'm doing. i feel i should have more money in a roth and so i was thinking about getting a part time job to fund it. i don't think i need the money it just seems i should have more money in the roth. i don't know why i think that. i might be just trying to keep up with the rothes (they live next door to the joneses).
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Re: How much of your nest egg is after-tax money?
Old 04-16-2007, 11:19 PM   #36
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Re: How much of your nest egg is after-tax money?

13% in after tax. Rest is:
84% IRA
3% Roth

We drank the cool aid on 401Ks and IRAs for many years. Roth didn't arrive soon enough to add much. Would have more taxable if we hadn't paid off the house before retiring 2 years ago.

Now we are converting IRA to Roth to maximum of 15% bracket every year before age 70.5 arrives (we are 62). Nice thing about IRAs is that we put money in at tax brackets upwards of 28% but are taking it out at 15%. Roth conversions will minimize amount that MRDs push into 25% bracket according to Excel spreadsheet.

We live on the IRAs, SS, and a micro pension, and pay taxes and extraordinary expenses (trips, house paint, repairs, and other assorted occassional biggies) from taxable account. When it runs out, we'll use Roth for same.
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Re: How much of your nest egg is after-tax money?
Old 04-17-2007, 12:28 AM   #37
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Re: How much of your nest egg is after-tax money?

100% after-tax here. I never paid much attention to the 401K or IRA's when I was younger. I changed jobs a lot and then started my own business.
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Re: How much of your nest egg is after-tax money?
Old 04-17-2007, 12:35 AM   #38
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Re: How much of your nest egg is after-tax money?

I used to follow the recommended path of:
- contribute to 401k to get company match
- contribute to Roth
- contribute to 401k to the max
- contribute to taxable accounts

I never seemed to have enough funds to get to the taxable accounts

Over the years it started to bug me that everything I had saved was tied up in tax-deferred accounts that I could not access until I was 60. About that time the following Scott Burns article appeared:
Another Way You Can Diversify

Yeah, I'm a Scott Burns fan. And that article hit home for me. Today I still contribute enough to my 401k to get the match (free money!) but instead of maxing it out, I now put that money in a taxable account. Maybe I could do better overall with the 401k maxed out, given the option of 72t withdrawals, but I really like the flexibility of having a taxable account that I can use in the manner as I see fit -- hopefully to bridge us from early retirement to age 60.

edit: fix typo
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Re: How much of your nest egg is after-tax money?
Old 04-17-2007, 02:22 AM   #39
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Re: How much of your nest egg is after-tax money?

Not FIREd yet... another 2 or 3 years.

I'm about 80% outside or IRAs / 401ks. I haven't had enough years of 401k contributions to amount to much. I assumed that my retirement tax rate would be lower than my working tax rate, so I never contributed to a ROTH when my income was lower and it was possible
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Re: How much of your nest egg is after-tax money?
Old 04-17-2007, 03:35 AM   #40
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Re: How much of your nest egg is after-tax money?

Here is a metric to track -- Portfolio Tax Basis

Here is how I compute it:

CB = Tax Basis (or Cost Basis) in taxable accounts
Non-IRA = non-deductible IRA contributions
ROTH = total ROTH IRA


Portfolio Tax Basis =

(CB + ROTH + Non-IRA) / NetWorth


You can also divide the rest of your net worth (if you realized everything right now) into how it would be taxed, capital gains or ordinary income:

Deferred Ordinary Income and Deferred Capital Gains

These three numbers should add to one. The last time I checked, my mix was:

Portfolio Tax Basis: .46

Deferred Ordinary Income: .225

Unrealized Cap Gains: .315

Kramer
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