Trying to sanity check my tax strategy.
I’m 36 with ~$530K in a traditional 401(k), fully invested in index funds, and I’ve been maxing it out. Planning to retire somewhere between 45–55.
What I’m struggling with: it seems like there’s a limit to how much you can realistically convert to Roth each year without jumping into higher tax brackets. Even with ~15–20 years before RMDs, it feels like a large pre-tax balance could outgrow my ability to convert it efficiently.
If that’s true, I’m wondering if I should already be shifting strategy:
* Keep maxing traditional
* Switch to Roth 401(k)
* Redirect more to taxable/Roth
At what point does a pre-tax balance become “too big”? Would you still max traditional in this situation, or start diversifying now?
When to stop traditional 401k contributions (with RMDs in mind), and start building the taxable brokerage "bridge" money to get to age 59.5?
byu/WSBtoFIRE infinancialindependence
Posted by WSBtoFIRE
2 Comments
Need more information, but the answer is likely “never”, especially when 72(t) is an option.
The answer is never for most people
Don’t worry about RMDs, the withdrawal rate is close to what you’ll be wanting to withdraw anyway. And if it’s not, it’s because you’ve won the game so hard that you won’t miss the tax dollars at that time