Consider the Calculations section of the t vs. R wiki. The math can get a little complicated, but for the Simplest situation the math is indeed simple.Are you talking about contributions made multiple times during your career and distributions taken at multiple years during retirement?For example. in my case, my tax-deferred contributions deferred at 25% and then maybe a little at 15%, coming off the top. If I had take an RMD today, most would be taxed at 12% and then maybe a little at 22%, filling from the bottom.I don't quite understand how it's filling up from the bottom. Or maybe I'm having trouble seeing it that way. The income bucket is fungible, no? It fills up as the year goes on. Why would I say that a RMD dollar has a specific tax rate?Don’t forget that when you are saving into tax deferred it comes off the top, so it saves you from getting taxed at the highest tax bracket.
When you are taking an RMD, you are filling up from the bottom.
Unless social security and pension income puts you back into the same highest tax bracket, then some of the RMD income is taxed at a lower rate.
Has somebody done cumulative analysis using time value of money? It will not be easy to find real average tax saved during accumulation and tax paid during distribution. Besides we are not really interested in tax but rather what is left after the tax. The math will be extremely complicated and I might not even understand it!
Statistics: Posted by FiveK — Sun Aug 25, 2024 5:59 pm