That's why I think it's silly to be complaining about an extra $5k in your Roth.
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marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
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All of which far exceed the tax savings of a couple extra grand in a Roth.
Not complaining, just stating the fact that it's not only the rich who will be affected by this.
Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).
Not sure how you came to a total tax savings of $1-5k but I digress.
I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.
Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes
So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.
But let me answer your other question/point:
The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)
Consider the value of a single year's contribution. (we can do both scenarios)
$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k
So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k
You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.
So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200
And that's how much you're saving 30 years from now, not today.
I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.