The “I want to retire soon” thread (2 Viewers)

[matttyl]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

 

[IvanKaramazov]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

 

[SFBayDuck]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

 

[matttyl]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

There is an IRA limit, which this year is $7k. It’s the total you can put into your IRAs (Roth or traditional). You may be talking about your ability to deduct the (traditional) IRA contribution amount if you also have access to a (traditional) 401k?

 

[IvanKaramazov]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

There is an IRA limit, which this year is $7k. It’s the total you can put into your IRAs (Roth or traditional). You may be talking about your ability to deduct the (traditional) IRA contribution amount if you also have access to a (traditional) 401k?

No, I was being dumb. It wasn't the more intelligent error. It was the dumber one.

I was thinking that, 15+ years ago, it would have been better for me to steer our the money that went into our brokerage account into a traditional IRA instead, in addition to our Roths. It turns out we couldn't have done that anyway because we were maxing our Roths. We couldn't have contributed more.

The end result is that I have kind a weird allocation across account types. All we have is my Roth, my wife's Roth, and our joint brokerage account, and just by happenstance it's almost 1/3-1/3-1/3. Not quite, but close enough for a first approximation. (I'm ignoring our day-to-day banking accounts -- I'm just talking long-term retirement accounts). I'm retiring well before SS and before 59.5, so I'm glad to have the brokerage.

 

[matttyl]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

There is an IRA limit, which this year is $7k. It’s the total you can put into your IRAs (Roth or traditional). You may be talking about your ability to deduct the (traditional) IRA contribution amount if you also have access to a (traditional) 401k?

No, I was being dumb. It wasn't the more intelligent error. It was the dumber one.

I was thinking that, 15+ years ago, it would have been better for me to steer our the money that went into our brokerage account into a traditional IRA instead, in addition to our Roths. It turns out we couldn't have done that anyway because we were maxing our Roths. We couldn't have contributed more.

The end result is that I have kind a weird allocation across account types. All we have is my Roth, my wife's Roth, and our joint brokerage account, and just by happenstance it's almost 1/3-1/3-1/3. Not quite, but close enough for a first approximation. (I'm ignoring our day-to-day banking accounts -- I'm just talking long-term retirement accounts). I'm retiring well before SS and before 59.5, so I'm glad to have the brokerage.

No 401k/403b/457 options with either of your employers?

I mean it will be cool to (potentially) owe no taxes once retired, including be able to receive SS tax free perhaps, but they do have a sizable standard deduction you could fill up….

 

[IvanKaramazov]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

There is an IRA limit, which this year is $7k. It’s the total you can put into your IRAs (Roth or traditional). You may be talking about your ability to deduct the (traditional) IRA contribution amount if you also have access to a (traditional) 401k?

No, I was being dumb. It wasn't the more intelligent error. It was the dumber one.

I was thinking that, 15+ years ago, it would have been better for me to steer our the money that went into our brokerage account into a traditional IRA instead, in addition to our Roths. It turns out we couldn't have done that anyway because we were maxing our Roths. We couldn't have contributed more.

The end result is that I have kind a weird allocation across account types. All we have is my Roth, my wife's Roth, and our joint brokerage account, and just by happenstance it's almost 1/3-1/3-1/3. Not quite, but close enough for a first approximation. (I'm ignoring our day-to-day banking accounts -- I'm just talking long-term retirement accounts). I'm retiring well before SS and before 59.5, so I'm glad to have the brokerage.

No 401k/403b/457 options with either of your employers?

I mean it will be cool to (potentially) owe no taxes once retired, including be able to receive SS tax free perhaps, but they do have a sizable standard deduction you could fill up….

No. I'm a state employee and we get a defined-benefit pension which is really nice. But that also means taxable income in perpetuity, of course.

 

[Instinctive]

This whole Roth-IRA thing, if you have a household income of around $230-$237k, something like that but not even $250k total household income which these days in more metropolis sections of the country, that's not unbelievable at all that two working adults would be pulling in a 6-figure salary each

Where I'm going and what I'm saying is you can't start one of these or continue to fund one of these if you make over the amounts I just went over
How are people suppose to get ahead? Not everyone starts a Roth when they're 18 yrs old but believe me after reading the fine print, it should be a requirement

A decent chunk of our retirement is going to be in 401k/403b style investments and as you all know they get taxed as you withdraw
My son is 25 and he already has his Roth set up and I had to give him the bad news that at some point in the future I'm expecting him to not be able to fund that any more
He got the joke

My son also tells me that the 6% of his salary which is matched with another 3% from the company, that money is currently split between his 401 and his Roth
I have to believe him but I don't ever remember that being an option or presented to anyone at companies and non profits we have worked at.

1st World Problems and that's perfectly fine

Yeah I mean FWIW $230k is the 86th percentile of household income in the U.S. HOUSEHOLD, not individual.

For individuals, $100k puts you at the 82nd percentile.

So ~80% of all people can fund a Roth IRA without issues.


For the rest of us...you make a non-deductible contribution to a Traditional IRA, file your E-85, and immediately convert it to a Roth IRA. No tax consequence since your nondeductible traditional IRA contribution was already post-tax.

The whole 80% thing compared to most folks in the country....the difference between where we are and the top 1%-2%-5% of the country is astronomical so to me the difference between a family making $250k vs the ones that bring in $150k total household income, basically the same people

Half the country retires with $0 in the bank and attempts to live off social security.
Only 1/3 of this country has an advanced degree
Let's not short change the hard work it takes to even approach the number the government wants to impose as the Mason-Dixon on Roth-IRA

Why am I getting so defensive over nothing?
I want to thank you for the instant answer that expands options as we continue this journey
FTR: That number I brought up, we haven't passed that number yet but if you're gonna break that ceiling, it better be by a lot not by an inch

It's making me reconsider some upcoming decisions for '25 and beyond. We both just turned 50 and it feels like the next 5-10 years for us are going to be critical
-I would like to keep jamming the Roth for as long and as much as possible, the difference when we get into our 60s (I didn't seriously just write that, did I?) is gonna be huge

I appreciate the post back and information
I am going to look into that
Thank You!

I didn't even perceive it as particularly defensive. FWIW, the backdoor is super easy to do and you can keep jamming it forever. I'm doing ours for 2025 this week!

Idk. 86th percentile is $230k. My household is almost exactly on the 1% mark (I think it's like $597k) and I think our life is exactly the same financially as it was when we made $190k combined five years ago. We do get to save more now, which hopefully means retiring earlier. That's the plan at least.

I think in large part that's because the tax free growth of $7k a year pales in comparison to maxing out a 401(k), or doing a backdoor anyway, or just dumping it into an HYSA or a brokerage account anyway.

Look, I love a Roth IRA. It lets you save around $9-10k pretax dollars, get the growth tax free on $7k of it and give the rest to the government now, and withdraw it tax free one day.

A Traditional 401(k) let's you give nothing to the government now, save up to $23k pre tax dollars, grow totally tax free, and then one day pay a likely smaller percentage than your current rate whenever you withdraw it. It's also an awesome option.

When you consider just how easy the backdoor Roth IRA is anyway, it's just not worth much time and energy, to me, to be annoyed that people who make less money get a little easier time to access a great savings tool. It's not the difference maker for anyone who has to deal with the restrictions being able to save for retirement or not. It's a blessing to have to deal with the added difficulty of doing the backdoor steps.

I guess my point is: if you really want the Roth treatment, you can still get it. And if you don't want the hassle, the wealth of other savings options are plenty good (even just having a taxable investment account!). Keep jamming that money away and you're gonna be fine regardless.

ETA: The form you file for the backdoor is Form 8606 - https://www.irs.gov/forms-pubs/about-form-8606

 

[matttyl]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

Making sure I (and others) understand what you mean here - you can do both, but the total contributions into them are still capped at the same $7k (this year). So you could do $7k into one, or the other, or $3.5k into both. You can’t do $7k into both in the same tax year.

Now you could do $7k into your roth one year, and then $7k into a traditional the next year, if that what you meant.

Oh, I didn't realize that. I thought the traditional limits were completely separate. Now I don't feel so stupid. Or, alternately, I was differently stupid than I thought originally.

There is an IRA limit, which this year is $7k. It’s the total you can put into your IRAs (Roth or traditional). You may be talking about your ability to deduct the (traditional) IRA contribution amount if you also have access to a (traditional) 401k?

No, I was being dumb. It wasn't the more intelligent error. It was the dumber one.

I was thinking that, 15+ years ago, it would have been better for me to steer our the money that went into our brokerage account into a traditional IRA instead, in addition to our Roths. It turns out we couldn't have done that anyway because we were maxing our Roths. We couldn't have contributed more.

The end result is that I have kind a weird allocation across account types. All we have is my Roth, my wife's Roth, and our joint brokerage account, and just by happenstance it's almost 1/3-1/3-1/3. Not quite, but close enough for a first approximation. (I'm ignoring our day-to-day banking accounts -- I'm just talking long-term retirement accounts). I'm retiring well before SS and before 59.5, so I'm glad to have the brokerage.

No 401k/403b/457 options with either of your employers?

I mean it will be cool to (potentially) owe no taxes once retired, including be able to receive SS tax free perhaps, but they do have a sizable standard deduction you could fill up….

No. I'm a state employee and we get a defined-benefit pension which is really nice. But that also means taxable income in perpetuity, of course.

So you’ll have some taxable income to fill up that standard deduction.

 

[stbugs]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

My youngest keeps bugging me about opening a Roth IRA and I told him I would but I didn’t want him to put all his savings in since he’s going to be starting college in the Fall. He’s saved $10k so far but he’s only going to be working in the summers so I want him to stay pretty liquid now, especially for expenses in 4 years after graduating. His oldest brother has a Roth 401k that he started as soon as he graduated but I think the matching is traditional. I told him to stick with all Roth until he gets to a point where he’s in a high tax bracket, which could be a bit. My youngest is pretty financially smart already so I know he’ll try to max his Roth 401k after college when he gets one. Having that taxable account (which is partially invested not just cash) should hopefully let him put more in the 401k to start.

I haven’t gotten anywhere near HSAs for them. That might be interesting because they’ll likely stay on our insurance until they are, I think 26 as it costs them nothing but also because I don’t know if you want to over fund that since the usage is limited.

 

[SFBayDuck]

I haven’t gotten anywhere near HSAs for them. That might be interesting because they’ll likely stay on our insurance until they are, I think 26 as it costs them nothing but also because I don’t know if you want to over fund that since the usage is limited.

Sure it's limited in that it has to be used for qualified medical expenses, but remember you can reimburse yourself at any time. So I have a google folder that I just drop every medical receipt in since I've had a HD plan and an HSA and a spreadsheet with a running total. Between that and the fact that you can only put in $4,300/year as an individual, I wouldn't be too concerned with over funding one.

Not saying it's something I'd necessarily prioritize for a youngster. In fact since early in a career cash flow can be tight you might not be able to just park that money and not use it for current health care costs. But do the math - between lower monthly premiums and if your company contributes enough to make the higher deductible a wash compared to a more traditional plan, you might as well. If you have to use it do so, and you got the tax break. I know in the first year or two of having one I used some of the money.

 

[BeTheMatch]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

I am my idiot son's retirement plan, via the custodial Roth we set up for him and keep him funding.

 

[BeTheMatch]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

I am my idiot son's retirement plan, via the custodial Roth we set up for him and keep him funding.

Seriously, though, I don't know that you could get more bang for your buck as a parent. The long-term math on a maxed Roth every year starting when he was 13 is staggering. If there's one thing every parent should be doing for their kids, it's funding a Roth the second they have any earned income.

 

[Instinctive]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

I am my idiot son's retirement plan, via the custodial Roth we set up for him and keep him funding.

Seriously, though, I don't know that you could get more bang for your buck as a parent. The long-term math on a maxed Roth every year starting when he was 13 is staggering. If there's one thing every parent should be doing for their kids, it's funding a Roth the second they have any earned income.

And considering finding a way to manufacture some earned income to do so if it's within your means.

 

[BeTheMatch]

According to historical averages, if you invest $10,000 in the S&P 500 today, it could potentially grow to be worth around $452,592 in 40 years, assuming an average annual return of 10% (which is close to the historical average for the S&P 500).

That's if you never add another dime to it.

 

[SFBayDuck]

Yup, get the kids to open a Roth early, and contribute as much as you can as early as you can. My daughter made $150 tutoring when she was like 14, and I opened a Roth for her and put $150 in there. She got her first job last year as a soph-junior in college, and when I helped her do her taxes she decided how much she wanted to put into the Roth and I matched it. Hope she finds a job with 401K when she graduates this year, and I'll suggest she do 100% Roth if it's an option.

As for us olds, yeah I sure wish I had started a Roth long before I did, as I haven't been able to directly contribute for the last decade or so. I did get one started via a Roth 401K several years ago that I've since rolled over. And I now do some post-tax 401K contributions that get get rolled over in-plan to a Roth while I'm still maxing the traditional 401K contribution. But I'm sitting at like 65% traditional, 17% Roth/HSA, 18% taxable across all my assets. Hoping to do some Roth conversions during pre-SS retirement and get that up to 35-40%.

I am my idiot son's retirement plan, via the custodial Roth we set up for him and keep him funding.

Seriously, though, I don't know that you could get more bang for your buck as a parent. The long-term math on a maxed Roth every year starting when he was 13 is staggering. If there's one thing every parent should be doing for their kids, it's funding a Roth the second they have any earned income.

And considering finding a way to manufacture some earned income to do so if it's within your means.

I started commercial fishing with my dad when I was 8 years old, did that every summer all the way through high school. My percentage was documented so I had real "income" as it was a hobby/tax write off for him. Sure wish Roths had been a thing back then (this was the 80s), as I'd probably be retired today!

 

[IvanKaramazov]

According to historical averages, if you invest $10,000 in the S&P 500 today, it could potentially grow to be worth around $452,592 in 40 years, assuming an average annual return of 10% (which is close to the historical average for the S&P 500).

That's if you never add another dime to it.

I 100% understand the math behind compounding, and I always have. None of this is new to me. Still, it absolutely blows me away to look at my Roth balances and know that that balance was generated by a series of relatively trivial investments that I just forgot about for 25 years. It's one thing to project it out in Excel, but it's a totally different thing to see it in the balance of your own personal Fidelity account, which belongs to you for real. Or at least that's been my experience.

 

[fruity pebbles]

According to historical averages, if you invest $10,000 in the S&P 500 today, it could potentially grow to be worth around $452,592 in 40 years, assuming an average annual return of 10% (which is close to the historical average for the S&P 500).

That's if you never add another dime to it.

8th wonder of the world. I sat my 12 yo daughter down recently and went over some compound calculators with her. Basically, if you start investing now you’ll need to put in a lot less than if you start later in life. To her credit, she took a real interest and put $50 into an E*trade account that was offering a $150 bonus. She’s since put another $10 to $20 in at varying times from money she earned from chores, gifts etc. and I agreed to match whatever she contributes. Currently at a little under $400 six months in. We will transfer it to a Roth when she has real earned income.

 

[NutterButter]

According to historical averages, if you invest $10,000 in the S&P 500 today, it could potentially grow to be worth around $452,592 in 40 years, assuming an average annual return of 10% (which is close to the historical average for the S&P 500).

That's if you never add another dime to it.

8th wonder of the world. I sat my 12 yo daughter down recently and went over some compound calculators with her. Basically, if you start investing now you’ll need to put in a lot less than if you start later in life. To her credit, she took a real interest and put $50 into an E*trade account that was offering a $150 bonus. She’s since put another $10 to $20 in at varying times from money she earned from chores, gifts etc. and I agreed to match whatever she contributes. Currently at a little under $400 six months in. We will transfer it to a Roth when she has real earned income.

That's a really good idea. You can see with your own eyes how much of a difference time makes.

 

[-OZ-]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

The Max contribution is for both combined, so while you can have both it usually doesn’t make sense to contribute to both. We only have a traditional IRA because it’s a rollover.

 

[matttyl]

I haven’t gotten anywhere near HSAs for them. That might be interesting because they’ll likely stay on our insurance until they are, I think 26 as it costs them nothing but also because I don’t know if you want to over fund that since the usage is limited.

Sure it's limited in that it has to be used for qualified medical expenses, but remember you can reimburse yourself at any time. So I have a google folder that I just drop every medical receipt in since I've had a HD plan and an HSA and a spreadsheet with a running total. Between that and the fact that you can only put in $4,300/year as an individual, I wouldn't be too concerned with over funding one.

Not saying it's something I'd necessarily prioritize for a youngster. In fact since early in a career cash flow can be tight you might not be able to just park that money and not use it for current health care costs. But do the math - between lower monthly premiums and if your company contributes enough to make the higher deductible a wash compared to a more traditional plan, you might as well. If you have to use it do so, and you got the tax break. I know in the first year or two of having one I used some of the money.

Just a few notes - contributions into an HSA must be made when you have an HDHP (high deductible health plan), but distributions from it can be made even if you don’t have an HDHP at that time. Just the way you phrased your spreadsheet of expenses being when you have an HDHP plan - that doesn’t have to be the case (but would have to be the case to continue contributions).

Secondly, and maybe more importantly, distributions of “excess contributions” once on Medicare. You can take tax free distributions from your HSA to reimburse yourself for Medicare part B premiums (Medicare isn’t free). Better to reimburse yourself tax free from the HSA rather than needing to take from an IRA or 401k as taxable income for the (currently) ~175 a month.

 

[-OZ-]

How are people suppose to get ahead? N

No offense but if you’re complaining with two incomes, access to two 401k plans, and 1/4 million salary, imagine one income, one TSP and a significantly lower salary.
But yeah, investing early is key.

 

[IvanKaramazov]

I know this is stupid, but when I was younger, I thought you had to choose between a Roth or a traditional IRA. I honestly didn't realize you could do both. We have a bunch of money in our brokerage account that I probably should steered into a tax-deferred account instead, but it's nice having the flexibility of a large brokerage account. That wasn't optimal, obviously.

It's a nice reminder that you can some dumb mistakes and "time in the market" will paper over them.

The Max contribution is for both combined, so while you can have both it usually doesn’t make sense to contribute to both. We only have a traditional IRA because it’s a rollover.

Yeah, sorry, I was mistaken about this. I never bothered to go back and see if I actually could have funded both types of IRAs at their max level, because the hay is already in the barn. It turns out that I couldn't have done that anyway. Sorry for the minor derail.

 

[IvanKaramazov]

On a related note, should I be steering money into an HSA at this point? That is one that I completely slept on and I still don't understand incredibly well. Let's say I'm 4 years out from a retirement at age 56, if that matters. I'm not worried about hitting my number. I'm just wondering if there is a specific, strategic reason for funding something like this if I can already see the finish line.

 

[SFBayDuck]

Just a few notes - contributions into an HSA must be made when you have an HDHP (high deductible health plan), but distributions from it can be made even if you don’t have an HDHP at that time. Just the way you phrased your spreadsheet of expenses being when you have an HDHP plan - that doesn’t have to be the case (but would have to be the case to continue contributions).

Yes, that's right. I just meant I didn't keep track of medical expenses until I had an HSA, but of course you are correct in that I can reimburse myself for any future medical expenses as well as those that I've tracked.

On a related note, should I be steering money into an HSA at this point? That is one that I completely slept on and I still don't understand incredibly well. Let's say I'm 4 years out from a retirement at age 56, if that matters. I'm not worried about hitting my number. I'm just wondering if there is a specific, strategic reason for funding something like this if I can already see the finish line.

It's the most tax advantaged account there is - tax free in, tax free growth, tax free withdrawal. The family limit in 2025 is $8,550, it goes up a bit each year, plus you can do another $1000 after age 55 (so just that last year in your case). So if you have a high deductible/HSA-eligible plan (that is a requirement) and can cover medical expenses out of pocket, why not? You could stuff $36Kish in there over the next four years, saving a couple of bucks in taxes along the way, and invest it. I believe there are HSA-eligible plans on the ACA if you're going that route for health insurance from 56-65 (@matttyl is that correct?) , so you could conceivably keep contributing.

But even if you just do it for the next four years, with an 8% annual gain by the time you're 70 you could have like $150K in there to use for medical expenses in your 70s.

Will that move the needle for you? Probably not. But it's better than a sharp stick in the eye, as my grandpa used to say.

 

[Instinctive]

So HSAs - I'm considering starting my own company this year, which means I could decide to get one. My wife is still employed and will remain so by our current employer. So she and both kids will be on their amazing insurance.

I can't get a HDHP for me and be a dependent for hers - that would disqualify from the HSA.

So I guess the question is whether it's worth it for me to go off the amazing basically free insurance and onto an HDHP because not a lot can go wrong in your early 30s that wouldn't quickly meet the high deductible anyway and we would financially be fine...so worth a little risk to stick the max in an HSA for a couple years?

 

[Sand]

So I guess the question is whether it's worth it for me to go off the amazing basically free insurance and onto an HDHP because not a lot can go wrong in your early 30s that wouldn't quickly meet the high deductible anyway and we would financially be fine...so worth a little risk to stick the max in an HSA for a couple years?

Not a chance. Take the bird in hand.

 

[belljr]

Not a lot can go wrong? What does that even mean....a car accident? A random sharp pain in my intestines out of nowhere.....a kidney stone....

I'm not a hypochondriac or trying to be negative but you just never know.

You can find some other investment

 

[Instinctive]

Not a lot can go wrong? What does that even mean....a car accident? A random sharp pain in my intestines out of nowhere.....a kidney stone....

I'm not a hypochondriac or trying to be negative but you just never know.

You can find some other investment

I mean there are very few things that are bad which wouldn't be covered by an HDHP all the way anyway. If something costs more than like $7k, it won't matter. The things that cost less than what would meet the deductible are like idk a broken ankle. Which would suck, but isn't a financial disaster or anything

I was just musing on the likelihood and benefit.

 

[-OZ-]

whether it's worth it for me to go off the amazing basically free insurance and onto an HDHP because not a lot can go wrong…

As great as HSAs are, good inexpensive non high deductible plans are better imo. You can try to take my $355.92 / year $3k annual catastrophic cap plan, which we’ve rarely paid more than $1500 for a family of 7, out of my cold dead hands.

 

[matttyl]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

 

[Sand]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

I haven't seen anything on this, but I'd guess 1/3, 1/3, 1/3. Gives lots of options to control income and to have a good bit shielded from taxation.

 

[BeTheMatch]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

There are some good videos out there on YouTube.

Some basics. Roth would be last to pull from probably, so put stock index funds/ETFs there so you hopefully don't have to sell a loser someday. And with no taxes, put your assets that are likely to have biggest gains. Wouldn't do any bonds here. And these are great for those who inherit from you someday, so keep till last.

Bonds or fixed income could go in traditional IRA (with equities) because when RMDs kick in, you could pull from those rather than having to potentially sell losing stocks. I prefer index funds over ETFs in traditional IRA because you can then automate your RMDs. You can't do that with ETFs.

Taxable accounts is where you want liquid so can pull out for emergencies or just pull first before RMDs kick in on traditional. Index stock funds/ETFs ok here if you hold long enough (then just long-term capital gains rate). Could consider treasuries and tax-free muni bonds too because of different tax breaks.

 

[BeTheMatch]

As for how much in each bucket, that really depends on your current and future situation. We're pretty evenly split between Roth and traditional. Wife's pension will mean we're paying taxes forever (good problem), so wish we had more Roth, but it is what it is. We're building up our taxable account now.

 

[djmich]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

 

[Yo Mama]

Not a lot can go wrong? What does that even mean....a car accident? A random sharp pain in my intestines out of nowhere.....a kidney stone....

I'm not a hypochondriac or trying to be negative but you just never know.

You can find some other investment

I mean there are very few things that are bad which wouldn't be covered by an HDHP all the way anyway. If something costs more than like $7k, it won't matter. The things that cost less than what would meet the deductible are like idk a broken ankle. Which would suck, but isn't a financial disaster or anything

I was just musing on the likelihood and benefit.

Not an expert by any means, but IMO a big part of the HSA value comes from contributing in your younger (hopefully healthier) years so you can build up a balance for when you’re a bit older and need more care. Starting now when you already have a good option might not give you the value you think it will.

I’m mid fifties, and you’ll be amazed the things that come out of nowhere health wise and how expensive they can be.

 

[BeTheMatch]

Just a real-life example of one aspect of Roth vs. Traditional. And that's the inheritance factor.

My dad is 83 and probably won't be around that much longer. He's been sitting around for almost 20 years of retirement with no income and still didn't convert any of his sizable Traditional IRA to Roth. I didn't want to overstep, even though I'm sole beneficiary. So I haven't said anything.

But when he passes away, we will take on his exact same RMD requirements from year 1. And will be taxed on that as regular income on top of our employment income. It's enough money that we are going to have a huge tax issue when we inherit.

I get it, first-world problems. I know. But if he had converted all this into a Roth for pennies on the dollar (based on his retirement income) over the past 20 years, our tax bill would be ZERO.

So if that scenario matters to you and you're able to do something about it, you might want to factor that into your planning.

 

[matttyl]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

There are some good videos out there on YouTube.

Some basics. Roth would be last to pull from probably, so put stock index funds/ETFs there so you hopefully don't have to sell a loser someday. And with no taxes, put your assets that are likely to have biggest gains. Wouldn't do any bonds here. And these are great for those who inherit from you someday, so keep till last.

Bonds or fixed income could go in traditional IRA (with equities) because when RMDs kick in, you could pull from those rather than having to potentially sell losing stocks. I prefer index funds over ETFs in traditional IRA because you can then automate your RMDs. You can't do that with ETFs.

Taxable accounts is where you want liquid so can pull out for emergencies or just pull first before RMDs kick in on traditional. Index stock funds/ETFs ok here if you hold long enough (then just long-term capital gains rate). Could consider treasuries and tax-free muni bonds too because of different tax breaks.

Agree with all this (and do pretty much all of it). Was more wondering about the % mix in each, which I know can get personal to your own needs/wants. Just seeing if there were some basic rules of thumb to keep in mind.

I try to grow the tax free bucket as quick as possible, but limited to Roth IRA contributions x2, and HSA family contributions minus health expenses each year. Going forward, may possibly add Roth conversions depending on taxable income and tax brackets on a year by year basis.

Taxable is growing by almost max 401k contributions x2, plus each of our company matches. So this is growing by the most each year. I can see this easily being 2/3rds of the overall pie in the next few years…..of a hopefully larger pie of course. I just don’t want to give up the tax break now.

 

[opensourcebeer]

Just a real-life example of one aspect of Roth vs. Traditional. And that's the inheritance factor.

My dad is 83 and probably won't be around that much longer. He's been sitting around for almost 20 years of retirement with no income and still didn't convert any of his sizable Traditional IRA to Roth. I didn't want to overstep, even though I'm sole beneficiary. So I haven't said anything.

But when he passes away, we will take on his exact same RMD requirements from year 1. And will be taxed on that as regular income on top of our employment income. It's enough money that we are going to have a huge tax issue when we inherit.

I get it, first-world problems. I know. But if he had converted all this into a Roth for pennies on the dollar (based on his retirement income) over the past 20 years, our tax bill would be ZERO.

So if that scenario matters to you and you're able to do something about it, you might want to factor that into your planning.

Great post.

My plan is to spend all of my pre-tax retirement money during retirement, while also using my Roth account dividends to provide some tax free income if needed, and ideally being able to pass along the entirety of the Roth account to my kids at end of life.

I'm not suggesting this is the most optimal plan or anything, but it "feels" right. I also don't think federal taxes in general are likely to ever go lower.

 

[SFBayDuck]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

 

[guru_007]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts

This is really not accurate
Read up a bit on Peter Thiels Roth IRA

 

[SFBayDuck]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts

This is really not accurate
Read up a bit on Peter Thiels Roth IRA

Oh I'm familiar with that story. Breaking: rich guy avoids paying taxes.

 

[djmich]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

I'd be concerned that they like getting their tax revenue now and then decide that there's no reason they shouldn't get tax on the income growth in the account. 40yrs is a long time and we're gonna have to pay that deficit somehow lol

 

[-OZ-]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

I haven't seen anything on this, but I'd guess 1/3, 1/3, 1/3. Gives lots of options to control income and to have a good bit shielded from taxation.

For many, 1/3 is way higher than we’d have in a regular brokerage. But if you’re getting a late start it might be higher.

For us, I think we’re looking at 50% pensions (call that fixed income in a traditional account), 25% Roth, 15% traditional IRA/TSP, 10% regular brokerage.

 

[-OZ-]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

I'd be concerned that they like getting their tax revenue now and then decide that there's no reason they shouldn't get tax on the income growth in the account. 40yrs is a long time and we're gonna have to pay that deficit somehow lol

Just spit balling but I think a federal sales tax would be more likely. And far more politically viable.

 

[SFBayDuck]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

I'd be concerned that they like getting their tax revenue now and then decide that there's no reason they shouldn't get tax on the income growth in the account. 40yrs is a long time and we're gonna have to pay that deficit somehow lol

Just spit balling but I think a federal sales tax would be more likely. And far more politically viable.

Almost anything is possible, especially if we're talking multi-decade time frames. Like I said, my crystal ball done busted so I have no idea. So all I can do is operate under the rules as we currently know them, which would have me direct my 21 year old to stuff her Roth accounts with as much as she can. And I plan to use early retirement (ie low income years) to convert some of my trad to Roth.

 

[-OZ-]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

I'd be concerned that they like getting their tax revenue now and then decide that there's no reason they shouldn't get tax on the income growth in the account. 40yrs is a long time and we're gonna have to pay that deficit somehow lol

Just spit balling but I think a federal sales tax would be more likely. And far more politically viable.

Almost anything is possible, especially if we're talking multi-decade time frames. Like I said, my crystal ball done busted so I have no idea. So all I can do is operate under the rules as we currently know them, which would have me direct my 21 year old to stuff her Roth accounts with as much as she can. And I plan to use early retirement (ie low income years) to convert some of my trad to Roth.

Right, but if I thought there was a real risk I’d be going full traditional accounts now.

 

[opensourcebeer]

Learned something valuable about the Roth IRA for my daughter, who is now 18, thanks guys.

Wonder if Uncle Sam is going to be able to resist not taxing these accounts over the next 40yrs

Uncle Sam loves Roth accounts - they get their tax revenue now instead of having to wait a few decades like with a traditional IRA/401K. If anything, I could see them upping the limits and making it easier to get money into Roths. Nobody sitting in DC right now really cares about getting that money in 2050, they'd rather see/spend it now.

That said, my crystal ball is busted so

I'd be concerned that they like getting their tax revenue now and then decide that there's no reason they shouldn't get tax on the income growth in the account. 40yrs is a long time and we're gonna have to pay that deficit somehow lol

I'd suspect that if the Feds tried to change the rules on Roths, you might see a significant number of people pull out all their contributed amounts before the rule change took effect, assuming the new tax rate on Roths is similar to other taxable accounts.

 

[Sand]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

I haven't seen anything on this, but I'd guess 1/3, 1/3, 1/3. Gives lots of options to control income and to have a good bit shielded from taxation.

For many, 1/3 is way higher than we’d have in a regular brokerage. But if you’re getting a late start it might be higher.

I've ended up with just about an even split between taxable and tax deferred. Roth/HSA is like 4% of the total. It'll work.

If one was 100% in one of the categories that's where the trouble comes in (or they are losing out on a ton of growth potential). Any reasonable mix is going to allow for some flexibility.

 

[-OZ-]

Are there any good rules of thumb, or circumstances to consider when seeing how much of your nest egg is in which tax bucket? I see lots of places talking about your tax buckets and “asset location”, and to not be too heavy with your taxable bucket - but what would that be?

And wouldn’t the optimal allocation shift over time (the closer you get to 59.5 the less of an issue the illiquidity of the IRAs/401k become)?

Quick back of the napkin math has our cash (savings and checking) at 4%, tax free (all Roth stuff, HSAs, cash value life insurance) at 22%, taxable (all traditional stuff) at 49%, and after tax (brokerage and stocks) at about 25%. The past few years the after tax percentage (though not really actual $ amount) has shrunk, while the other two buckets have both grown as those are being funded/maxed - and that trend will likely continue.

Thanks for any thoughts.

I haven't seen anything on this, but I'd guess 1/3, 1/3, 1/3. Gives lots of options to control income and to have a good bit shielded from taxation.

For many, 1/3 is way higher than we’d have in a regular brokerage. But if you’re getting a late start it might be higher.

I've ended up with just about an even split between taxable and tax deferred. Roth/HSA is like 4% of the total. It'll work.

If one was 100% in one of the categories that's where the trouble comes in (or they are losing out on a ton of growth potential). Any reasonable mix is going to allow for some flexibility.

It’ll work. If it wasn’t for the pensions I’d have done more traditional.