Spouse and I are in our early 40's. Spouse has access to a mega backdoor Roth. Our strategy has been to save in this order:
- max employer 401k matches
- Roth IRA (2 backdoor Roths as our income increased)
- HSA if available
- max pretax 401k (one for each of us)
- max Roth 401k through post tax 401k conversions
We have been able to max all of our retirement accounts for the last few years. We now have about $1.2 million in pretax 401k and $400k in a combo of Roth IRA/ Roth 401k.
We are in the 24 percent marginal tax bracket.
We do not expect to have to fully fund retirement with these accounts as we live pretty frugally and should have a few paid off real estate properties to provide income by the time we quit work.
At what point do we think about not maxing out pretax 401k in favor of being able to put in more after tax 401k and converting into Roth 401k? We do not want end up paying more than 24 percent in income taxes in retirement due to required minimum distributions but we are not sure when we would even need to worry about that.