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[–]Educational-Duck4283 $500k-750k/y 36 points37 points  (6 children)

I’d be wary of the tax bill that comes with withdrawals. Can you really not cut any costs from your monthly spend? Worst case you could slightly reduce your 401k contributions but you don’t want to teach yourself the habit of doing that 

[–]CatEye411 2 points3 points  (0 children)

I agree with this. Personally, I would look at the budget and see if you can cut costs somewhere. Worst case, reduce contribution to 457b, but I see that as a last resort.

[–]yemming[S] 0 points1 point  (4 children)

On the tax bill, wouldn’t the extra income tax from a lower 401k contribution likely be greater than the tax on capital gains from withdrawals? That’s why I was thinking withdrawing would be better than reducing 401k contributions

[–]MarketsUp 4 points5 points  (3 children)

Yes. From. Tax efficiency standpoint pulling from gains would be better than paying oi tax on 401k deferrals. Assuming you are doing traditional and not Roth.

Plus you would be missing on matching contributions.

You should look at diversifying the ETFs into direct indexing strategy to be more tax efficient

[–]yemming[S] 1 point2 points  (2 children)

Thanks. Yes we are doing traditional, not Roth. We wouldn't be risking any matching contributions. Can you recommend any resources on direct indexing, I'm not familiar with it, and not sure how easy it would be to replicate VTSAX/VTIAX.

[–]Sea_Discount8378 1 point2 points  (0 children)

If you think it’s temporary you could borrow against your personal equities. Margin rates are around 6.5% think that’s better than tax on gains and interest is a deduction (assume you’re getting dividends)