I advocate to stop paying income taxes

$700,000 at age 95 spending $5500 a month? Not counting spending on health care and long-term care? Are you NUTS!!

Great discussion.

We will move in retirement to a state that doesn't take every bit of retirement income. I know we will be taked on 401k withdrawals. However, my contributions are post tax, and hers are pre-tax. We will have to pay the piper but will try to minimize state taxes by moving. It will still be a burden.

That's why I have been a Roth 401k man my entire career.

Now hit $3m and pull 4% each year. That’s $120,000 a year to enjoy life stress free and teach your children how to manage money and inherit it!

For the life of me, I’ll never understand why Democrats want more taxation. If the U.S. government wasn’t confiscating my wealth and sending it overseas to fund foreign wars, I might get behind the idea that taxes are an honorable thing. They are not honorable. The U.S. government does more for non-citizens than its own. It’s disgusting. And one more thing, the U.S. government could tax (confiscate) every single American dollar at a rate of 99% and guess what? The politicians will be filthy rich and the country will be indebted up to its eye balls. Sadly, the best politicians are the ones that are no longer breathing.

Nice segue into talking about a Roth. Still sticking to a traditional.

This is why we need a business man in office

Oh fer cryin out loud...if you have 1 million in 401k you are doing very well. You will not be eating out 5 times a week, driving everyday, or travel to Europe 3 times a year when youre 80.

I like the part where he doesn't explain how/why a $1M 401k (today) is actually only worth $650k (future), then goes on this rant about how the govt overspends.

That's why a 401k is a huge mistake, and I would never do one with any significant amount of money. The performance is terrible, you're a lot better off investing it in other ways - you don't get the huge tax bill later and you have much bigger growth.

The primary advantage of a tax-deferred account is you are able to save a lot more than you would have, otherwise. That additional contribution rate, combined with the power of compound interest, is how people are able to retire with dignity.

What a moron.

I don’t know if you’ve looked at the offerings on inflation protected income annuities per $1000 invested but they’re terrible . You’re not going to get more that a 3% escalator either.

Basically you pay taxes till you die

you aren’t paying payroll taxes on the 401k again. That has already been done. You pay federal income tax at the marginal rate. Check out a guy named Sean Mullaney for his videos on how that works.

Never withdraw a lump sum from a TIRA. You put it in slow, take it out slow. And BTW, if RMDs bump you into a higher tax bracket, it means you succeeded, not failed. It is one of the best 'problems ' to have late in life.

If you get taxed 35% on your 401k you royally messed up

Assuming a “best case” 35% effective tax rate on withdrawals from a $1M portfolio is wild lol

This scares the crap out of me , my wife and I have save very well for our retirement. This government is going to change the tax and etc and punish those that have saved .

Maybe if you live in California, NY where state, city, county taxes are ridiculous but the average person at maximum will pay 25% and that depending on how he takes out his money. So in reality it’s more like $750-800K net. One million is Plenty for a couple and that’s not including there social security checks as well. You can live comfortably on $1million and retire at 60

Scare tactic dude.

I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?

Get debt to increase your score, so you can get more debt. The system is a scam.

Bidenomics

This is nonsense. Clickbait . To everyone watching, find a good CFP, get your money in 3 buckets. Tax avoidance is not tax evasion

Didn't the Biden administration, about a year and a half ago, change the definition of what a recession is? That way the economy wasn't in a recession.

Of course the amount of money is at an all time high, that's just inflation right there.

Vote republican so dems quit spending our money on illegals and wars!!

this is why economics is a joke, just cuz we have fed printing a bubble doesnt mean the internals are shit

Remember, a Roth 401K is only post tax on the amount you put in, not what your employer matched.

Great job democrats

You take it out gradually...not all at once

No-brainer Roth conversion: 12% bracket.😀

It doesnt all get taxed at once, for most ppl theyd be paying 22% or lower fed income rates on those 401k dollars not 35% like in your example. Sayong $1m in a 401k is not really $1m is about as insightful as saying your $100k salary isnt really $100k because you havent paid taxes yet.

And if we convert to Roth....we pay that tax now......and they probably change the rules in the future and tax us again 😅.

You only pull out up to the standard deduction every year, then more IF needed.

So what the money made money to pay the taxes in fold..you have to pay to play.so.what.. No problem I will pay it..nothing is for free

then should’ve set up a Roth or backdoor Roth.

These financial shorts are fantastic! Thanks for sharing all this knowledge. More people need this info!

The federal government is not a household nor does it work like one using that as an example is dishonest at best.

he also doesn't know how government works.

Not sure who would follow this

I’ve been interested in a Roth conversion as I plan my upcoming retirement, as most of my $ is in a regular 401k. And I get it that the tax burden will be due at some point later if nothing is done. My only question or issue is do you really think a person that late in age will have that big of income needs? When data shows spending declines after age 75 or so.?

Only the US government can print money with the money machine. Just think if ordinary citizens had a money making machines in their basements debt would never be a problem. Why can you print Trillions for the war in Ukraine and not print enough to cover the expenses of Americas Debt? Things to ponder people.

If you are not age 59 1/2 or older then you cannot have the taxes withheld from the conversion amount. This is considered a distribution and subject to a 10% penalty. Secondly, doing a conversion late in the year is not an option in state that is pay as you go. If you do then you have to fill out additional form. If the form is incorrect it will result in an additional penalty from the state you live in. It just further complicates things. Lastly, everytime I watch one of these videos paying the taxes is made out to be pretty straight forward. It's not. For example, say you convert 100k and you are in the 22% tax bracket. One would assume you would need to pay 22k in taxes. No, what you need to due since we have a progressive tax system is estimate your reportable income. You do this by filling out an estimate form. Once you have done that then you will know how much more in taxes you will need to pay each quarter. This also applies if you live in a pay as you go state. Bottom line is conversions are just another program made to be way more complicated than it should be.

How long until all of that debt is called? Or until foreign interest no longer trust US treasury bonds?

#EndTheFed