googily
Full time employment: Posting here.
- Joined
- Jul 6, 2013
- Messages
- 792
Hi all,
I know there are often questions (which I even asked here myself a few years ago in my former life) about stopping 401k contributions or just cutting down to the employer match level to help fund the "bridge" years before 59.5 in early retirement.
This is kind of the opposite question, and I'm interested in how other people would handle it. Would you keep contributing to your 401k in this situation?
My current piles, as I close in on age 52:
* Extremely low seven-figures that I can access now, between a spousal inherited IRA and a taxable brokerage account
* mid six figures in my own 401k
* a teeny rollover IRA from my old job with only pre-tax monies in it
* an even teenier Roth profile, having just opened my own Roth for the first time a few weeks ago and also having done an in-plan rollover of a few $k in after-tax money in my 401k to the in-plan Roth
Also of note:
* Currently maxing 401k contributions plus catch-up, so $24k/year.
* A new Roth 401k option alongside the 401k.
* My company dropped their 401k match down to 1% a few years ago, opting to replace the rest of the match with a Cash Balance account. Company matches 1% of Roth contributions, but not after-tax.
* Now planning to probably work a few more years.
* No direct heirs.
* Access to a non-COLA pension at 65, Survivor SS as early as 60, and DH's non-COLA pension already bringing me about $10k/year. By the time I'm 67, this could add up to over $65k a year.
Unless I head down the hookers-and-blow path, I see the potential for six-figure RMDs, and lots and lots of money that will be taxed as income when I access it, and so am starting to think about ways to combat that very first-world problem.
If this were your setup, would you switch to contributing to the Roth 401k? Or just dumping the former 401k contributions into the taxable brokerage account? Or some percentage of both?
I'm also finding that I have a bit of a weird mental block on dipping into the inherited IRA because it's taxed as income (and I am already flirting with the 24% bracket thanks to wages, dividends, small DH pension, cap gains, etc), so the notion of more taxable funds and more Roth contributions is enticing.
But maybe I'm missing something.
Thoughts?
I know there are often questions (which I even asked here myself a few years ago in my former life) about stopping 401k contributions or just cutting down to the employer match level to help fund the "bridge" years before 59.5 in early retirement.
This is kind of the opposite question, and I'm interested in how other people would handle it. Would you keep contributing to your 401k in this situation?
My current piles, as I close in on age 52:
* Extremely low seven-figures that I can access now, between a spousal inherited IRA and a taxable brokerage account
* mid six figures in my own 401k
* a teeny rollover IRA from my old job with only pre-tax monies in it
* an even teenier Roth profile, having just opened my own Roth for the first time a few weeks ago and also having done an in-plan rollover of a few $k in after-tax money in my 401k to the in-plan Roth
Also of note:
* Currently maxing 401k contributions plus catch-up, so $24k/year.
* A new Roth 401k option alongside the 401k.
* My company dropped their 401k match down to 1% a few years ago, opting to replace the rest of the match with a Cash Balance account. Company matches 1% of Roth contributions, but not after-tax.
* Now planning to probably work a few more years.
* No direct heirs.
* Access to a non-COLA pension at 65, Survivor SS as early as 60, and DH's non-COLA pension already bringing me about $10k/year. By the time I'm 67, this could add up to over $65k a year.
Unless I head down the hookers-and-blow path, I see the potential for six-figure RMDs, and lots and lots of money that will be taxed as income when I access it, and so am starting to think about ways to combat that very first-world problem.
If this were your setup, would you switch to contributing to the Roth 401k? Or just dumping the former 401k contributions into the taxable brokerage account? Or some percentage of both?
I'm also finding that I have a bit of a weird mental block on dipping into the inherited IRA because it's taxed as income (and I am already flirting with the 24% bracket thanks to wages, dividends, small DH pension, cap gains, etc), so the notion of more taxable funds and more Roth contributions is enticing.
But maybe I'm missing something.
Thoughts?