[quote=plm]The 401K is just tax deferred so that needs to be taken into account in the math. Taxes will have to be paid at some point. I wonder if the rate could actually be higher when you retire and the way I understand it, you have to start taking money out at a certain age.

Backdoor roth ira took me several days to figure out and about a week to execute. But once you have all the accounts set up it and taxes figured out shouldn’t be too hard to repeat. Hopefully doing it again this year will be easier.[/quote]

Yes, if you saved a lot in your pre tax retirement accounts, you could be subject to higher tax rate during your retirement than right now, if your annual required minimum distribution (RMD) is more than what your AGI was when you were working.

Also, you would be subject to the tax rate during that time, which lets face it, will be more than it is now, given the way this country spends….RMD doesn’t kick in until 70.5 I think…a lot of good retirees I know are facing this right now.
Its funny, because one person I know calls their 401k retirement plan the biggest scam for avid savers. His argument is 401k had shitty fund selections that subjected him to a bunch of fees to fatten the fund companies. And that now that he saved so much, his RMD is 2x what his AGI was when he was working. So his tax rate is also much higher now, and hence his argument is this was a beautiful con to get avid savers to pay more taxes. Also, since he never borrowed against his 401k, he claims this money was pretty much dead for use all those years.

He told me he regrets contributing so much to his 401k, and wishes he had just contributed enough to get the company match and then put the rest of his money after tax on real estate, when things like depreciation and other itemized deduction and things like like 1031 exchanged do a wonderful job sheltering money indefinitely… I don’t know if I agree with him, but it was an interesting comment to hear.