Now that we are north of 59.5, we really see the advantage of doing things that way. In the years leading up to 59.5, by maxing the 401k, it created taxable income space to do Roth conversions (we also had tIRAs). Now north of 59.5, retirement accounts are no longer for the future, they're for now. A dollar in Roth is always worth more than a dollar in taxable. And also important, money in Roth lets us uncouple cash flow from taxable income. We control taxable income with Roth conversions. Cash beyond SS and pensions comes from Roth IRAs. That way, a sudden need for cash should never cause undesired taxable income. We keep clear of IRMAA with very strong taxable income control.The bolded is a good point. After all my expenses I still have considerable savings leftover. In terms of alternative investments.. this is how I look at things in terms of priority.I always max out all tax advantaged space available to me, however I do that because I don't need extra spending money, it would simply be invested into a taxable brokerage account which is less optimal.
#1 - 401k, Roth IRA, HSA - these are top priority.
#6 - Taxable Brokerage - After all the above, this is the last thing I'd want to own since I already have those funds in #1.
Maybe I need to see what I actually have left over after all this to see if I can afford to max the 401k. I agree that if I have money leftover, wouldn't hurt.
Statistics: Posted by lstone19 — Sun Oct 06, 2024 8:04 pm — Replies 18 — Views 1214