NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
And the bad news: We (here) all started too late to head off the inevitable 1st world problems of high RMDs. That's why I urge the young'uns here to ROTH to the max and minimize the 401(k) - or at least do the math as they make their plans. YMMV
I dunno about minimizing 401k, at least in our case.
We both had 50% matching by our employers. So, what we have in our accounts now, 1/3 of it came from employers. Without the matching, the accounts would be only 67% of their present values.
Our tax rate even with RMD will not be that high to exceed the 33% loss by forfeiting the matching. And we have not counted the tax loss by not having the tax deduction from 401k when the contribution was made.
Secondly, back then, the max 401k contribution was $10K/year, while the IRA was a measly $2K/year. Roth did not exist, and then when it was created it was also limited to $2K, and the income limit for qualification also made me ineligible. You cannot build a big nest egg with $2K/year. I did not even think our $30K/year 401k was enough (2 accounts, plus the matching), but the market god was so generous.
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