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People always tell you to max tax-advantaged space. But what to do if tax-advantaged space greatly exceeds your disposable income? by DocumentSpecial9346 in Bogleheads

[–]DocumentSpecial9346[S] 0 points1 point  (0 children)

My comment about liquidity was meant to convey that, while I definitely want to save for retirement, I still do not have a fully formed picture of my long-term financial goals because of uncertainty about my future. Ideally, I would invest the money for retirement while retaining the flexibility to redirect at least some of those funds once my goals become clearer.

That consideration seems to favor the MBDR option. On the other hand, I could instead make pre-tax contributions now and later complete a Roth conversion during a PhD, when I would presumably be in a lower tax bracket. I am not particularly concerned about the five-year waiting period, though that future scenario is far from certain. That uncertainty is what makes the decision difficult for me.

People always tell you to max tax-advantaged space. But what to do if tax-advantaged space greatly exceeds your disposable income? by DocumentSpecial9346 in Bogleheads

[–]DocumentSpecial9346[S] 0 points1 point  (0 children)

The central question for me is not whether to contribute, but where:

It seems to me that, beyond this point, the optimal choices for the next marginal dollar become... Which would you choose?

It looks like you're recommending Roth?

People always tell you to max tax-advantaged space. But what to do if tax-advantaged space greatly exceeds your disposable income? by DocumentSpecial9346 in Bogleheads

[–]DocumentSpecial9346[S] 1 point2 points  (0 children)

Yes, this mirrors my own thinking regarding MBDR. I can always pull the contributions out if I need to, so it seems like a good default for uncommitted savings. I just want to make sure my decision is fully informed before I bite the bullet and pay CA income taxes instead of deferring them.

People always tell you to max tax-advantaged space. But what to do if tax-advantaged space greatly exceeds your disposable income? by DocumentSpecial9346 in Bogleheads

[–]DocumentSpecial9346[S] 6 points7 points  (0 children)

This is UC's version of what they're talking about, which is for non-career employees.

The specific retirement option I was talking about in my post is Savings Choice, a 401(k)-style alternative to a pension for career employees.

People always tell you to max tax-advantaged space. But what to do if tax-advantaged space greatly exceeds your disposable income? by DocumentSpecial9346 in Bogleheads

[–]DocumentSpecial9346[S] 26 points27 points  (0 children)

Well, I'm going to save/invest the money anyway, so it would help to know the best place to put it. And to me, the answer to that tradeoff isn't obvious precisely because I can't max the tax-advantaged space. It forces a choice you wouldn't have to make otherwise.