Hi, can you help me figure out if switching a 457 pre-tax account to a roth account make sense when I hit retirement age:
This is my current scenario: 38 years old (6 years in practice)
457 for 2018: $18,000 / ORP for 2018 : $16,500 / 403b for 2018 : $9,625
I now have a total of 400k in pre-tax accounts
Back door roth: 11k )
Roth 403b: 18000
Total: 29 k
My employer lets me switch the 457 pre tax to a post tax 457
Should I switch?February 10, 2019 at 6:15 pm MST #189764PedsParticipantStatus: PhysicianPosts: 3997Joined: 01/08/2016
what is your projected RMD at 70?February 10, 2019 at 6:34 pm MST #189766
with an estimated rate of return of 6% the RMD at age 70 is $88.870February 10, 2019 at 8:22 pm MST #189783birddogParticipantStatus: PhysicianPosts: 28Joined: 02/05/2019
It likely depends on your current marginal tax rate (where the pre-tax savings would occur) and where you project to be in retirement (some predictable factors like RMD estimations and some unpredictable factors like future tax rates). Another option would be to keep the 457 as-is in pretax and invest the difference between pre-tax and Roth in a taxable account. A taxable account affords one a lot of flexibility including the ability to tax loss harvest…February 10, 2019 at 10:26 pm MST #189803jhwkr542ParticipantStatus: PhysicianPosts: 1227Joined: 02/15/2016
Assuming you’re in your peak earnings years, it’s unlikely a post tax 457b will make sense.February 11, 2019 at 9:52 pm MST #190071
Why do younsay that? I ‘ m trying to understand the long term consequencesFebruary 12, 2019 at 8:19 am MST #190140February 12, 2019 at 8:21 am MST #190141PedsParticipantStatus: PhysicianPosts: 3997Joined: 01/08/2016
with an estimated rate of return of 6% the RMD at age 70 is $88.870Click to expand…
assuming 2x max trad 401ks (38K/year), with a present value of 400K, 32 years to go, at 6% return, the pretax portfolio will hit ~6MM.
assuming still married, that puts your RMD at 165K.
thats the 24% bracket. not including SS, other pensions, std deduction, etc etc etc etc
so worst case right now….you want to pay tax at 35%…..and then spend it at <24%…..
that would be your long term consequence currently.February 12, 2019 at 9:11 am MST #190152