Of course that’s all conjecture, but you have to take some kind of guess at what inflation will be like on average. I believe I used 3.25% to calculate those numbers.

Don’t forget that $1M will not be in 25 years what it is today. Even today, at a reasonable 4%, that’s only $40,000 per year, which is not much if you want to enjoy your retirement. Imagine what that will be like in 25 years. Well, it will still be $40,000 … but it will *seem* like much less in today’s dollars. You get the picture.

Personally, I’m shooting for $4.5M by age 59 (30 years from now), which will surprisingly only throw off $70,000 per year in today’s dollars, due to the inflation.

I’m thinking about the scenario where your motivation to do a roth conversion or contribution now is because you believe income tax rates will rise significantly in the future, so you pay income taxes now to protect your future withdraws/income from those high rates. But down the road with the national government needing money, instead of (or in addition to higher income tax rates), the government institutes a VAT, so the investor’s original motivation is no longer valid (the government gets more of your retirement money than you originally planned for).

I’m curious about your reasons for going with a roth conversion next year. I’ve considered it as well, but believe that congress will find a way around the current advantage of roths (income tax free withdraws) by going with a VAT or some other national sales tax. So with a conversion, you may end of paying taxes now to convert and taxes much later when you purchase something after withdrawing funds from a roth. Bottom line, our national government is going need to raise revenues eventually and they can only get money from people who have money, so they’ll find a way. I have a roth 401k option which is nice, but I’m not sure which is the better way to go with contributions for this same reason.

I guess I should continue to max out my retirement accounts. Although, there is the risk that the government will void the 72(t) exception. However, I think this is remote.

Searching MMB, it looks like you have already thought about this, see http://www.mymoneyblog.com/arc.....r-ira.html

Invest in retirement accounts until I reach an amount that would grow to about 700K to 1M by age 60. Then invest the rest in taxable accounts until I have enough to quit working to the point where the regular taxable accounts can more than carry me to age 59.5. I think you’ve discussed this before but I didn’t really give it much thought then.

The IRS rule 72(t) allows for substantially equal withdrawals from an IRA prior to age 59.5 without penalty. There are a few formulas an account holder can choose and must keep the same plan for 5 years or until the person turns 59.5 whichever is longer.

For myself I have a similar concern – my family tends to not get very old and I so I want to be able to access my money whenever I please. I’ve been using a regular brokerage account for my investments, for this reason. Sometimes I feel that this is not the smartest thing tax-wise but I’d hate to see it disappear behind this 25 year barrier.

This is exactly what I do. We’ve already agreed on this before. Thus, I’m just taking up space in your comments.

(_8′()

A concern I have recently (maybe because it’s everywhere on the net) is the declining value of the US Dollar. If the Dow goes to 30,000 but the dollar is worth less, do we really have anymore wealth? Gold seems too high and who knows if it is a true measure of currency.

Most of your retirement savings, ~$200k is in tax-sheltered accounts that can only be tapped at age 59.5. Assuming you are 35 (although, I think you are younger), it seems like you have more than enough post-60 nest egg already. Even at 6%, and no further contributions, you will have $1M by the time you can withdraw it.

As I understand it, your goal is be financially independent long before you turn 60. It seems like this will require more contributions to your non-tax-sheltered accounts, as they will have less time to grow.

Just wondering what your thoughts are on this topic. I am in a similar position and am already thinking about not putting anything in my Roth next year.

What company are you using to manage your taxable investment accounts?