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Old 08-10-2019, 08:42 PM   #61
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We are 73/25/2 divide between pre tax/post tax/Roth in year 1 of ER. For FireCalc planning purposes we simply budgeted for income tax as if all expenses were pulled from pre-tax accounts (IRA, 401k, etc). Pre-tax % will increase over time as SS and pensions kick in and we spend down post tax accounts first.
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Old 08-11-2019, 02:38 AM   #62
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We are 73/25/2 divide between pre tax/post tax/Roth in year 1 of ER. For FireCalc planning purposes we simply budgeted for income tax as if all expenses were pulled from pre-tax accounts (IRA, 401k, etc). Pre-tax % will increase over time as SS and pensions kick in and we spend down post tax accounts first.
Why not delay SS, spend down TIRA, perhaps Roth conversions and possibly reduce RMD effect?
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Old 08-11-2019, 06:06 AM   #63
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We are at 86.4% Traditional IRA, 13.6% ROTH and HSA. We are in the 22% tax bracket due to small work gig, inherited REIT investment proceeds, DW's SS, and necessary Trad IRA withdrawal. So, I've been converting Trad IRA to ROTH the last two years and expect to keep doing that to the top of the 22% tax bracket until age 70, and contribute to my ROTH $7,000 or the upper limit as long as I have earned income. The ROTH accounts are invested in AA 80/20. The Trad IRA at AA 60/40.
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Old 08-11-2019, 06:18 AM   #64
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I've seen plenty of threads about AA percentages but have not seen any on the ratio of taxable funds vs. non-taxable. Our ratio is 88/12 so most of our "wealth" is tied up in accounts that trigger taxes. We both have been retired for 4+ years and prior to that I ran all the spreadsheets and FireCalc models and pulled the trigger at 100%.

I had a slight panic attack last year as I was running them again when I realized the tool doesn't account for the taxes so if you have $1M in an IRA you really have access to $750K-$800K depending on brackets. I plugged in lower numbers and still no problems but that got me thinking. What kind of ratios do other FIRE folk have?

My DW feels a bit financially insecure because only 12% of our funds are available without thinking about taxes and I have to admit it would be nice to have a larger amount of funds to pull from, especially for travel or remodeling expenses.
Not sure it has much meaning. I've spent an entire career (35+ years) maximizing 401K's at each company where I've worked and then saving into taxable accounts as much as I could from salaries, bonuses, ESPP, Stock Options and RSU's. No ratio was ever targeted, just saving as much as I could.

Yet, I've always tracked it. It's 63% Deferred, 37% Taxable.
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Old 08-11-2019, 08:19 AM   #65
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I have a similar approach to many others in that I didn't target a specific pre/post taxes - I saved as much as I could. I haven't had much opportunity to invest in a Roth because of income restrictions, and my portfolio goes beyond the traditional 401k and IRA.

Ironically - Looking at my net worth, it's 50% pre-tax (401k, deferred compensation, stock vestments) / 50% post-tax (everything else).
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Old 08-11-2019, 11:08 AM   #66
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Tax in general is just another expense that we all must share the burden. Be it income tax, sales tax, gas tax, cable TV taxes, property tax, or XXX tax, you and I gladly fork it over for just the priviledge of living in this great country.


I do not use that ratio anyway...
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Old 08-11-2019, 11:14 AM   #67
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Why not delay SS, spend down TIRA, perhaps Roth conversions and possibly reduce RMD effect?
Will do Roth conversions to max out 10% fed tax rate over next few years to minimize RMD tax cliff effects.
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Old 08-12-2019, 10:03 AM   #68
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50/50 here.
the 50% taxable give us some problems for ACA subsidies, but have been moving the $$ around and believe next year will generate less income
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