You likely should already be using Traditional instead of Roth. Some guidelines say if your state+fed marginal is > 30%, use Trad. If < 25%, use Roth. Between 25-30, it's a toss up
Remember that save taxes at your marginal rate but you will withdraw at your effective rate which will likely be lower. I wouldn't be afraid of Traditional. Using today's brackets, you could withdraw up to approx $125k (assuming no other income) and pay a marginal of 15%. If you're a fed employee, I assume you have access to a Governmental Traditional 457 which I would be filling up to use for ages 58-60.
The rates starting in 2026 will return to the old brackets but the amounts adjusted for inflation. You'll probably still be in the 25 or 28 bracket.
If you have a state income tax, you might be paying 30%+ now to avoid having to pay 20% later.
Remember that save taxes at your marginal rate but you will withdraw at your effective rate which will likely be lower. I wouldn't be afraid of Traditional. Using today's brackets, you could withdraw up to approx $125k (assuming no other income) and pay a marginal of 15%. If you're a fed employee, I assume you have access to a Governmental Traditional 457 which I would be filling up to use for ages 58-60.
The rates starting in 2026 will return to the old brackets but the amounts adjusted for inflation. You'll probably still be in the 25 or 28 bracket.
If you have a state income tax, you might be paying 30%+ now to avoid having to pay 20% later.
Statistics: Posted by vtjon — Thu Oct 17, 2024 10:32 pm — Replies 1 — Views 66