Originally Posted by
RonRicco
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.
I agree with all of that. But having more tax deferral opportunity doesn’t reduce one’s opportunity to contribute or save ROTH post-tax money in their retirement savings. Getting the DC spillover as cash gives one more opportunities to invest (or squander) those dollars as they wish, but I’ll be surprised if there are a lot of people eager to turn over a third of it as tax for the privilege. Clearly, I could be wrong and maybe the MBCBP takes an otherwise good deal down. It seems like DALPA already ran with it and I personally support the effort.