I've been flipping over investment percentages in my head a bunch lately (obsessing, really) and AI has made recommendations based on AI numbers, but I was hoping to get a 2nd opinion/ reality check.
I'm 39 with only 79k invested, 72k in trad 401k, 6.5k Roth IRA at this time. I will make roughly 130k this year. I receive a 6% employer match. I have 401k contributions set to 8%. I will max my IRA. I will be sitting solidly in the 22% tax bracket this year.
I am getting a 3.5% raise in October and another 3.5% raise in February (union) and I've been planning to increase my 401k contributions.
My original plan was to continue maxing my IRA every year and bump my 401k contribution to 12%. Which would be ~$32700 for the year, in total (employer included)
AI is recommending that I would be better off increasing my 401k contribution to 15% and lower IRA to $4300, to keep the same take home. ~$33700 for the year.
My estimated income needed in retirement is just under 80k and I plan to retire at 65. S.S. is expected to be ~40k per year with current figures.
My concern is that the decrease in IRA contributions gives me less control over income tax in retirement and the potential massive RMD at 75 due to the extra amount in my 401k since my needed income won't be huge.
Am I overthinking this? (Yes, I am) Is there anything that I should also consider? Does decreasing IRA for 401k make sense or should I continue with my original plan. Any other extra thoughts would be appreciated.
Posted by SarcasticAnd