Originally Posted by
Gunfighter
Also, if you can save more for retirement than what is currently allowed in tax advantaged accounts, the Roth essentially allows you to prepay taxes and have more spendable income in retirement.
1 million in a Roth = 1 million spendable dollars
1 million in a traditional = 1 million - income taxes or about 630,000.
If you can pay the taxes on the contribution now, you wont be paying them from your retirement fund.
I get this, but in order to get that $1M into a Roth, it costs something...$370k. That’s money that you don’t get to spend or better yet invest...it’s gone.
For pilots (and those with equivalent career earnings) I would understand the back door Roth strategy if you think that tax rates will increase in the future...for whatever reason. But barring this, you will be taxed at your maximum life tax bracket.
Of course I maxed out my Roth when I was in the military at a VERY low tax rate (some years under 3% effective), knowing that in retirement I would likely be in a higher bracket. But now as a high-earner, I can’t make the math work to convert at this point in my career. Just doesn’t add up to me.