Originally Posted by
TED74
I’d be interested to hear more about this. Why the disdain?
My finance guy can’t wait for me to have this thing up and running to shield more money from income tax since we’re about out of options. Sure, the risk/return profile isn’t what I’d want for my whole nest egg, but the MBCBP money will only make up a tiny fraction of the whole and can be offset elsewhere to keep an appropriate diversification profile. ~40% tax deferral on state and federal sounds pretty good to me on money that would otherwise be getting hit broadside at the highest rate.
What am I missing?
If you are in a high tax state, that is certainly a factor. Like anything else, there are a lot of considerations. Do you think tax rates are going up? How much tax deferred savings do you already have? How much “never taxed again” (well, I won’t put anything past the government) savings do you have?
In retirement many will play the tax bracket game. Having Roth or cash to avoid creeping into the next bracket makes this possible.
Many savers also prefer to pay the taxes now while they can more easily afford it as opposed to paying them in retirement, hence why so many people close to retirement still do the Roth or Mega Backdoor Roth.