I've done the same as Drone. If you have a Roth IRA elsewhere, you can opt to put your 401(a) in that Roth IRA. The catch is they have to mail you a check, then you send it to wherever your Roth IRA is managed. I didn't want to deal with this, so I just opened another Roth IRA with Fidelity. This way I just make a phone call and it's done within minutes. They will move it over into the Fidelity Roth IRA and it processes by the next business day.

Theoretically, you could contribute up to the 56k max for 2019. Since the company contributions are counted in that 56k, in practice you can't quite contribute that much. I just make a best guess as to what the company will put into my DPSP then set my percentage contribution to get as close to the max as possible. I generally just put all my PS check into 401 after tax.

It's really up to you to decide if you think it will work out better for you in the long run. One nice thing about the Roth IRA is lack of RMDs. One of the big reasons I do this is actually to pump up my Roth IRA. Plan being to convert it to a Self Directed IRA later and use that to invest in more real estate/rental properties.

No worries, it's confusing and it took me a lot of reading and chatting with a CPA friend of mine to wrap my mind around it all. I commend you for these efforts and I wish you and yours the best.

 

If you do not intend to contribute more than 25k into Roth accounts, the Roth 401k would be an option for the first 19k. If you are investing primarily in mutual funds, many of the funds within the Delta Plan have lower fees than their counterparts outside of the plan. You can roll the Roth 401k over to a Roth IRA at retirement to avoid the RMDs. The Roth IRA must be open for 5 years before taking funds out, so you could start a backdoor Roth IRA of $6k per year in addition to the Delta Plan and then roll over your Roth 401k at retirement. The rollover funds would pass the 5 year test if the Roth IRA has been open for 5 years.

DYODD, YMMV, get some real advice or at least spend some time on google.

 

The main "unknown" in all this planning is if/when the politics / "needs" of the US change to the point where the Roth IRA is considered a free ride that the wealthy enjoy in retirement that many were not able to afford and therefore should now be taxed as a wealth tax or an asset tax.

Unfortunately, I envision a day in the not too distant where it is actually considered more "fair" to take from people with Roth IRA's because those who used the Roth were obviously more well off than those using the other "pre-tax" IRA vehicles.
Good luck to us all.....

 

I would also not consider required minimum distributions after 70 a big deal. If your not going to take distributions what is the point of saving the money in the first place.

 

I didn't imply I would not need it. In theory, trying to control it. Just trying to manipulate the amount of income per year to stay in lower tax brackets.

As Full of Love stated, it could all change, but got to play by the known rules of the times.

 

I don’t see major changes in either Roth or regular 401k accounts. The government is not going to start confiscating personal accounts. The worst I see happening is taxes on gains and I doubt even that happens. Anytime one crackpot politician suggests something regarding retirement accounts the internet jumps all over it. Kind of like how Obama was going to seize everyone’s guns if he got elected.

 

Before our retirement accounts themselves are directly targeted with rule changes, your asset value within them will be used to calculate a Social Security offset. Along with any pension income you may be due. Many of us presume S.S. will fold or become a greatly diminished benefit during our retirement lifetime. At 56, I plan my retirement strategies as if I will have zero S.S. income, except for seeking as much tax free retirement income as possible. However, I am hopeful that the S.S. checks will roll in as a "bonus."

Before Social Security goes insolvent, I'm quite certain folks who were high earners and fastidious savers will be "penalized" for their wealth accumulation by decreasing their Social Security benefit. Which is probably the first line of attack for the mind set perpetuated by the A.O.C. and Elizabeth Warren types. Their more grandiose wishes for an overall wealth tax will get an initial foothold by taking "unnecessary public benefits" from the "rich." Productive member of society? Financially responsible? Low debt/committed saver? - Bam, here's your reward! You don't need all that Social Security benefit that you have earned! The younger you are, the more likely you are to be impacted in such a manner.

 

Timing distributions for minimization of taxable income is one reason for avoiding the RMD. You may use the Roth funds only in years you spend more, like a new car, boat, house, grandchildren's college, etc. Also, there are those who will be leaving an estate to their much younger spouse or children. Avoiding RMDs via a Roth IRA is suitable for that purpose as well.

 

Didn't many of the prez candidates already float a "wealth" tax vs an income tax? Sure (either 1-2%) annually for over $10mil crowd at first, but just as the income tax started as a paltry affair (1-7%) at first, the source of income will be intoxicating to power hungry politicians who may become more powerful.

Comparing this COA to "Obama will seize all the guns" is apples to oranges as the Constitution gets in the way of that threat. There is no enshrinement of the Roth IRA in the constitution.

You do have to play by the rules today, but there is a general rule that many rich abide by to, "never volunteer to pay a tax today that can be deferred until tomorrow."

I would just say that calculating the odds that the Roth IRA may be attacked for taxes in the future should at least be a consideration in your decision to convert tax deferred funds into a Roth at this point of time.

 

Kind of is though. There's the "no ex post facto" provision, not that they always worry about that of course. Then there's the tax methodology itself, where pretty much everyone not on a campaign trail at the moment at least realize that the "wealth tax" fantasy is blatantly unconstitutional and would require an amendment, and fat chance of that although you never know. They could always get a few years out of it by "shopping" in the right circuits.

Means testing for SS and whatever mandatory medical abomination we're living under by then will hapen way before that does anyway because its just easier. Then they'll come for more, and it will be a lot more, because there is no way what already exists can ever be paid for and they intend to expand everything and extend it to everyone on earth who wants to come and partake. Fun times.