This was my concern as my relatives are going though
this right now…

My relatives have a double whammy in that with their required minimum distribution from their 401k, their taxable income is more than during their working years. On top of that, all their debt is paid off, so they have virtually no deductions they can take (no mortgage interest,etc).

I’m concentrating on contributing the bare minimum to get my 401k matches, dividing that in half between a roth 401k and a normal 401k…Anything else, I keep after tax… I also am taking on more debt by increasing my mortgage. Although my tax rate isn’t exactly low, it’s not exactly high, because I have all the deductions I can take right now…But I figure when I retire, my house will be paid off, I won’t be having a lot of these expense deductions,etc….So while my taxable income will be less, so will be my deductions. For me, I have a sizeable mortgage deduction, which I plan on keeping large to get the tax benefit, but I’ll take money of my primary and put them to use elsewhere. Plus I can cover my large(r) loan if I really needed to.

I’m not convinced Roth IRA’s are going be immuned from some form of tax BTW…That’s why I’m not necessarily contributing completely to them either.