Originally Posted by
bugman61
DPSP cash is not taxed in and out unless you make some really bad choices. You are taxed at your current marginal rate, then subject to capital gains on the growth depending on what you do with the money. There are several options with the money that would be better than the mbcbp for people with a longer timeframe to retirement. And if the plan really does have a targeted 3-5% growth rate it’s not that difficult to overcome long term capital gains rate.
There’s a strategy for everyone and not all strategies are equal, but me personally, if we saw a hypothetical 15-20% pay raise and 20% DC… I’m going all Roth in my 401k from there on out. Some don’t want to pay so much in taxes, I get that. But I’m not as pessimistic about Roths being taxed again later on as some people. I could see a scenario however where there is a cap on how much you can have in the Roth account. But with fluctuating asset values I’m not sure that’s even realistic. I’d pay all the taxes today. Max my 401k out, then back door what I can into mine and my wife’s Roth IRAs. Whatever I still have to invest goes into my kids 529s then normal brokerage account and acts as an easy access investment. I tinker with the real estate investment idea every now and then… a new contract may trigger me to go that route eventually too.