On other thing to think about. While your pension and 401K is $950,000....that is not net of tax. I have only about 20% to 25% of my assets in "deferred tax" IRA's....which means 80% of my investments tecnically are net of tax (Ive already paid tax on it - although I have to pay tax on any future cap gains, interest and dividends) which also means more net dollars to me should I use those dollars.
Now...this was not necessarily by design....but as I was talking to a planner years ago....I said..."please explain to me why it makes sense....for me plan on taxes being less in my retirement years - they could also be higher"! While I understand...all the nuances of ....socking away more before tax dollars...to make more dollars...even if I am making the federal government more money....something about it....when I thought about it...didn't make a lot of sense to me....in terms of knowing what I would have for retirment. ( i.e., one can't control the federal government.)
So my after tax investable asset bucket say of ...$1,025,000....is someone elses 401K before tax bucket of ....what....$1,350,000 or so.
I also did not have the ability to set aside anymore in deferred accounts...unless I wanted an annuity...which after investigating them thoroughly I decided I didnt. In other words...why was I going to put "after tax" money....that I have already paid tax on....into a deferred vehicle like an annuity that when I started withdrawls...I'd have to pay tax again A small little detail (big!)...most people selling annuitie don't explain to you. If the annuities work as they should....we will be dead before we start invading the "basis" and only the basis is tax free. They distribute the growth out first. !!! The other cute little marketing thing....is that if someone bought the protected death benefit.....if the stock market goes down and your withdrawls bring "distributed bucket" down ...to zero (which does happen)...then that protected death benefit you have paid for goes away.
Anyone looking at annuities needs to have the person selling them....show you what happens when you start taking withdrawals against different scenarios of market decline. It is eye opening. Will you still get what they promised on a yearly basis. Yes..but they are paying you back with your own money.
Just my opinion...after intense investigation...
Now...this was not necessarily by design....but as I was talking to a planner years ago....I said..."please explain to me why it makes sense....for me plan on taxes being less in my retirement years - they could also be higher"! While I understand...all the nuances of ....socking away more before tax dollars...to make more dollars...even if I am making the federal government more money....something about it....when I thought about it...didn't make a lot of sense to me....in terms of knowing what I would have for retirment. ( i.e., one can't control the federal government.)
So my after tax investable asset bucket say of ...$1,025,000....is someone elses 401K before tax bucket of ....what....$1,350,000 or so.
I also did not have the ability to set aside anymore in deferred accounts...unless I wanted an annuity...which after investigating them thoroughly I decided I didnt. In other words...why was I going to put "after tax" money....that I have already paid tax on....into a deferred vehicle like an annuity that when I started withdrawls...I'd have to pay tax again
A small little detail (big!)...most people selling annuitie don't explain to you. If the annuities work as they should....we will be dead before we start invading the "basis" and only the basis is tax free. They distribute the growth out first. !!! The other cute little marketing thing....is that if someone bought the protected death benefit.....if the stock market goes down and your withdrawls bring "distributed bucket" down ...to zero (which does happen)...then that protected death benefit you have paid for goes away. Anyone looking at annuities needs to have the person selling them....show you what happens when you start taking withdrawals against different scenarios of market decline. It is eye opening. Will you still get what they promised on a yearly basis. Yes..but they are paying you back with your own money.
Just my opinion...after intense investigation...
