- 10,490
- 229
- Joined
- May 2, 2001
the tax bracket difference now and when you are 59. Surely, your tax bracket will be much lower at 59. and the $1.9M in capital gains? That will be taxed at the lower capital gain rate of 15%. So you are basically deferring your taxes to a period in your life where your bracket is much lower
yes.. there will be a difference in the tax bracket...but look at the actual numbers... you're saving a few thousand just to gain a taxbracket advantage?...
while in theory your thinking makes sense...but the numbers just prove otherwise.
it's like someone who has cash to pay off their house...but keeps a house payment just so that they can keep the tax benefit...instead of just paying itall off
Put it this way, the $2K you are saving now with a 401K tax shield by investing $5K a year, that you are benefiting from NOW while you are young and need capital, can be reinvested in the stock market/property/whatever you want while you are STILL YOUNG.
but really...how much of that 2K is really going to make that big of a impact on your portfolio?...not much.
and there is a huge economic opportunity cost you incurr with that.
eh...I disagree... you can invest in both your 401k and a Roth...and still have plenty of bucks to play around with.....5K a year really isn'tthat much.
I don't disagree that a 401k is a great investment...esp if your employer matches....but for me...the Roth is just a better investment overall.
really...just look at the numbers