Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.
I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.
But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.
Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.
My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.
