[quote=bullishgurl]
He has a shitload of money in his 401k but made a middle class income during his prime years by bring an complete miser. HE was also one of those guys that had a pension in the defense sector as a machinist that is also adding to the AGI in his retirement years, so I guess combined, his tax rate is much higher than when he was working.
Some of his colleagues are in the same boat.
But I agree with you on the 50/50 split, which is what I do.[/quote]
Seems like a 1st World problem – too much money and now has to pay more tax!
But seriously, that’s why the roth 401k vs traditional 401k is complicated. You have to project what your retirement tax rate is.
I agree with the 50/50 roth/traditional since it provides tax diversification in retirement.
Since the person had a pension, with SS, it’s probably fairly easy to be in a higher tax bracket if his income was average when he was working.
If you do have a large 401k balance, you have to withdraw money from your 401k as soon as you retire (retire early) and slowly move the money to a roth. Once you hit 70.5, the RMD can not be used for a roth. Only once you hit 70.5, you take SS and potentially withdraw money from the roth. So basically burn as much money from a traditional 401k/ira before you hit RMD,
