Author Topic: Mega-Backdoor Roth or Taxable Investments  (Read 1226 times)

emiloots

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Mega-Backdoor Roth or Taxable Investments
« on: May 25, 2017, 07:17:31 PM »
I have to ability to contribute up to 25% of my salary after-tax (in addition to up to 25% pre-tax) and recharacterize the after tax contributions twice a year.  However, I'm one of the fortunate ones with a pension so my income tax bracket will not drop significantly in retirement.  Is it still worth going to mega-backdoor route or should I just invest in taxable accounts?  I know there's no bad options here - I count myself lucky on all fronts.  If I delay taking my pension until 62, I will get the full amount so the one perk to the mega backdoor would be to bridge the gap between retirement and when I start pulling my pension.  The earliest I (voluntarily) retire will be 52, golden handcuffs with the retiree healthcare. 

MDM

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Re: Mega-Backdoor Roth or Taxable Investments
« Reply #1 on: May 25, 2017, 11:26:48 PM »
...I'm one of the fortunate ones with a pension so my income tax bracket will not drop significantly in retirement.
Thus making a Roth more attractive for you than for those without pensions.

Quote
Is it still worth going to mega-backdoor route or should I just invest in taxable accounts?
Roth, because that way you never pay taxes again, as opposed to a taxable account.