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View Poll Results: What %age of your gross salary is contributed to tax deferred retirement accounts
0%, nothing, nada 4 4.40%
1% to 10% 9 9.89%
11% to 20% 31 34.07%
21% to 30% 25 27.47%
31% to 40% 8 8.79%
41% to 50% 6 6.59%
More than 50% 8 8.79%
Voters: 91. You may not vote on this poll

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Old 09-22-2012, 09:16 AM   #41
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Quote:
Originally Posted by Stress-Free Retirement View Post

Why save taxes today on a small amount of contribution, only to pay taxes (probably at a higher rate no matter what your politics are (we have a 16 TRILION debt load) on a much larger account balance.
Because you don't pay tax on the "much larger account balance", but on the income you draw from the account. If you know that your retirement income requirement will be substantially less than your current salary, IMHO, it's a good idea to defer tax......even given the uncertainly of future tax rates.
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Old 09-22-2012, 10:38 AM   #42
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Agree with above. FIRE income is expected to be 1/5 or less of working income. So it's hard to imagine being in a higher tax bracket.

With respect to amounts, we just max out the contribution.
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Old 09-22-2012, 10:54 AM   #43
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Quote:
Originally Posted by Stress-Free Retirement View Post
My advice is to ONLY contribute up to the match (that's free money that you should grab!) and not a penny more.

Why save taxes today on a small amount of contribution, only to pay taxes (probably at a higher rate no matter what your politics are (we have a 16 TRILION debt load) on a much larger account balance.

If given the choice, a savvy farmer would much rather pay income taxes on the low cost of his bags of seed now, rather than on the larger value of his truckloads of harvest later on. It’s pretty simple, deferred taxes equals compounded taxes. So whose retirement are you planning for -- yours… or Uncle Sam’s?

Just my professional advice... mark
Quote:
Originally Posted by photoguy View Post
FIRE income is expected to be 1/5 or less of working income. So it's hard to imagine being in a higher tax bracket.

With respect to amounts, we just max out the contribution.


I agree with photoguy. While we were working we were in the 35% tax bracket so that is the rate at which we were deferring taxes. We've been retired 3 years now and will have access to those funds in 2 years at a much lower tax rate.
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Old 09-22-2012, 01:33 PM   #44
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I'm at about 36% among ESOP, Roth401(k), RothIRA and HSA. Despite probably being in a lower tax bracket in the future, I decided to take advantage of the current tax breaks that will expire to pay Roth401k taxes now and manage my taxes in the future on withdrawal. I probably won't be in the same "tier" on income taxes in the future, but I expect all the tiers to be higher, so may be equivilent.

Next year I may go back to regular 401k for the tax benefit and put the difference in a taxable investing account. The company ESOP has ended up being a majority of my funds due to growth and lack of ability to divest, and will all be taxable on withdrawal, so the reg vs. roth contributions will help me manage taxes in coming years.
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Old 09-22-2012, 01:41 PM   #45
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Originally Posted by nun

I see my 457 plan as part of my post ER and pre-59.5 spending. I get to save in it tax deferred, all the gains are tax deferred and I can take income from it anytime after separation. No worries about a 10% penalty prior to 59.5.
Another reason to go with 457 in Illinois is that the state (stupidly, in my opinion given the sad state of the budget) does not tax retirement income - pensions, IRA/401/403/457 withdrawals. Instead, they are clamoring to reduce pensions and health care benefits.
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Old 09-22-2012, 02:41 PM   #46
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Approx 5.5% of my gross goes into a tax deferred retirement account; the regular IRA is my only option (no 401 or hsa, etc).
I save another 10 - 20% on top of that. (I usually calculate my numbers from my net, which is 30% towards retirement)
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Old 09-22-2012, 03:54 PM   #47
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I'm at 401k max
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Old 09-22-2012, 07:56 PM   #48
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I'm maxing it, my FIRE income is going to be 15-20% of what I'm making now. I'm at a waaaay higher tax bracket while working, to a ridiculous degree.
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Old 09-24-2012, 12:51 AM   #49
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I am maxing out my 401k with the catchup plus the backdoor IRA, plus HSA, but I am spending my HSA, so I don't know if that counts.
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