I'm 36 and got a late start in my retirement savings due to bad choices (financing lifestyle inflation with credit cards) -- but I guess I'm stubborn and had to dig a hole for myself to appreciate how nice it is to not be in one.
Due to a work-related windfall (combined with failure to save in my 20s), I've ended up with quite a bit more money in my taxable accounts than my 401k/Roth.
It has made me think: when I'm making planning spreadsheets or punching numbers into FIRECalc -- and projecting what my expected "expenses" are in retirement -- how much should I include in that number for taxes, given that tax rates are different for the different types of accounts? Obviously a 100k balance in a Roth IRA is potentially "worth more" in retirement than 100k in my 401k, because I owe taxes on the latter.
Is it necessary to adjust my expense projections based on what % of my balance I expect to be tax-advantaged vs. not? Or is that just noise compared to the possible uncertainty in long-term tax rates*, and I should just pick a number? If so, what's a safe range for that number, say if I wanted to net 60k/yr in today's dollars?
(*not being political, just saying that no one knows what things will look like in 20-30 years, regardless of who is in office!)
Due to a work-related windfall (combined with failure to save in my 20s), I've ended up with quite a bit more money in my taxable accounts than my 401k/Roth.
It has made me think: when I'm making planning spreadsheets or punching numbers into FIRECalc -- and projecting what my expected "expenses" are in retirement -- how much should I include in that number for taxes, given that tax rates are different for the different types of accounts? Obviously a 100k balance in a Roth IRA is potentially "worth more" in retirement than 100k in my 401k, because I owe taxes on the latter.
Is it necessary to adjust my expense projections based on what % of my balance I expect to be tax-advantaged vs. not? Or is that just noise compared to the possible uncertainty in long-term tax rates*, and I should just pick a number? If so, what's a safe range for that number, say if I wanted to net 60k/yr in today's dollars?
(*not being political, just saying that no one knows what things will look like in 20-30 years, regardless of who is in office!)