[Andrea]

Curious what people would do, or what variables to consider. I have been maxing out all of my tax advantaged accounts as much as possible, but it does leave me close to being short sometimes.

Since I’m 47, I’m thinking it’s better to get savings into the ROTH and have to sell some brokerage, if/when I need access to more money.

I do have an emergency HSA account. I’m likely in 15% cap gains now and in retirement.

Thoughts?

[Frank]

I wouldn’t worry about it — if you are in a high tax bracket now and will be in a lower one later, don’t be doing any conversions, etc.

You will have plenty of time to do this in your 60s when your income is lower and also use Rule 72(t) to get money out of retirement accounts penalty free.

You do want to have open at least one Roth IRA just to get the five year rule that pertains to those running for you.

[Bill]

If you are finding yourself short frequently, then your budget it off and you probably also need a bigger cash cushion.

Life is lumpy and there are going to be unexpected expenses, so build in some slack.

[Rick]

I like the idea of moving money from brokerage into Roth via your workplace mega back door Roth. A bit of fungible money theory. Even if part of the indirect cost is some hit to liquidity.

Roth contribution windows close each year or tax year and once closed it’s closed forever.

Brokerage is such a big catcher’s mitt for ways and reasons that future funds lands into it and many of those things occur late to very late in your fire journey (downsize house, sell stock grants or espp, inheritance, and many more reasons).

Fund the former and use the latter if needed.

[Seann]

There’s a lot of moving parts when it comes to minimizing the amount of taxes you pay over a lifetime.

I have come to the conclusion that there are benefits to both a traditional IRA and a Roth IRA and the only way to benefit from both is to participate in both.

[Author]

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