Only 24%? There are many on this forum that would kill to have that in their retirement mix.
Many here have posted about not having any taxable assets worth discussing. Consider our single friends here that can't take advantage of a $3K reduction on income because they have no taxable losses. That particularly stings as single filers get the SAME $3K reduction that MFJ get. And if that puts them into another IRMAA bracket ... ouch.
Or someone that needs a new roof and only has a IRA and Roth account. So, instead of selling 10K of a large winner and offsetting it with 10K of LT losses - thus getting the 10K to pay for the roof without adding a dime to their taxes (or AGI) - they need to make the decision to add to AGI from taking the money from their IRA and pay the taxes or take it from their ROTH. However, if the only reason that they have a Roth (that cost them 22% in taxes) was because their heir is in a really high tax bracket ... that becomes quite the lose-lose situation.
Count me among those who have only a small percentage of taxable accounts in their stash. I just added them all up, and the total is 5.6%, even though it still a few hundred Ks. I used to have a lot more in taxable, but the years of ER prior to 59-1/2 have drained them. Sometime, I thought it would be nice to have more taxable to enjoy the tax-free long-term capital gain for non-earned income up to more than $100K/year as I did back then in early ER. But then, I remember that my situation now is quite different.
I will face RMD soon and that along with SS which I can delay no longer will put me permanently into the 24% bracket. The only way out of it is if the market gets decimated, and I would not want that. So, might as well pay the tax now to do aggressive Roth conversion to get it over with. And having done that for a few years, we now have Roth accounts in the 7 figures, and that's still a fraction of the remaining IRA/401k to be converted.
And the tax-free Roth accounts allow me to take advantage of the market movements more freely without having to think about the tax ramifications. I remember in the long past, how often I was reluctant to book a stock gain even though I felt it was topping out, all because of the thought of the short-term cap gain tax liability cutting into the profit. And I held on, until there was no longer a gain but a loss.
No, my situation is now completely different. And I act accordingly. The return of my Roth has been greater than the gain in my tax-deferred accounts, which is higher than the gain in my taxable, because I have been paying more attention to the Roth while the taxable is buy-and-hold. And buy-and-hold over so many years mean no loss anywhere to do tax loss harvesting.
