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?
Plenty of opportunity out there to make better gains, even after that cash is taxed, than MBCBP. Opportunities that have the potential to drop your tax basis much more than thr MBCBP. I'm against it unless it's optional or if we can move that money elsewhere like a Self Directed IRA.
Originally Posted by
TED74
To be clear, getting DC as cash instead of into a MBCBP is not analogous to ROTH. You will pay taxes now AND on the earnings later.
Only if you leave that money there, or if the government changes the rules. Otherwise move it to a Roth IRA and the gains are not taxed later.