I’m wondering if any of you are facing the same IRA/401K questions that I am facing. This question is for people like me who are not yet retired, but are trying to plan for ER. As I understand it, only the corporate tax cuts in the bill are permanent. The individual tax cuts are not, and for many, the tax rates will be higher in 2027 than they otherwise would have been.
In recent years, I’ve been deferring taxes instead of doing the Roth route. This had a couple of advantages. First, it dropped my marginal tax rate down into the 25% category. Under the new plan, I will be in the 24% tax bracket no matter what. Second, I had been assuming that my tax bracket would be lower in retirement than it was when I earned the money and put it in my deferred retirement accounts. But, now, it’s not as clear that this will be the case, or at least not to the same degree.
So, does it make more sense to now put money in Roth accounts instead of traditional 401Ks/IRAs? So, should I switch to Roth accounts now?