I always assumed that most people saved like megacorp-types (including myself): Max out the 401k tax-deferred, and only if there's anything extra to invest, put it somewhere else, like a taxable account. The result is the vast majority of the portfolio being tax-deferred.
I'm interested in hearing more about how the people have only a low percentage tax-deferred got there.
...prioritizing managing MAGI for ACA subsidies makes more sense for us than conversions (our subsidy for 2019 is approximately $15k).
DW and I maxed out 401k from age 30 on and I made the max allowable contributions to a TIRA for about 15 years. But our spending has always been far below our incomes - in my best bonus year we saved over 70% of gross income, so I was saving much more than our 401k and TIRAs with no place to go but taxable. So we're only 30% tax deferred. Like some/many here, we had fortunate careers income wise...but we'll pay a lot in taxes between now and when we go poof. First world problem to be sure.I'm surprised, too, but in the opposite way that you are. I always assumed that most people saved like megacorp-types (including myself): Max out the 401k tax-deferred, and only if there's anything extra to invest, put it somewhere else, like a taxable account. The result is the vast majority of the portfolio being tax-deferred.
I'm interested in hearing more about how the people have only a low percentage tax-deferred got there.
Wow, poll results show higher % tax deferred than I expected. That means there's an awful lot of money awaiting taxation at ordinary rates that instead could have been taxed at lower dividend and cap gains rates. Makes me wonder if the tax deduction for annual IRA contribs is enough to make up for the later loss of lower div and CG rates.
The marginal tax rate on my IRA withdrawals today is 12% vs. the 31% I would have paid had I not deferred that income.
46% tax deferred. We did some Roth conversions in 2010, which put our % lower than it would have been otherwise. We plan on doing more Roth conversions over the next few years.