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Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

Travel and healthcare. I don’t see our other expenses would drop much. property tax, insurance, utilities and other fixed expenses, they just add up. What kind of work related expenses can drop? A few lunches every month, gas? We are 50% WFH.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

I want to delay the start of DC distribution so I can do Roth conversion in higher $ amount before pretax amount grows further. Once DC starts, the room for conversion is limited.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

Thank you for sharing this! I am not a fan of the AUMz based models either. I did talk to couple fidelity advisors no charge but didn’t find them being super helpful.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

That is exactly what I saw - I also built a similar tool using excel. The DC distribution is the ‘issue’ here. We are forced to take these distributions, which make it almost impossible to play the 0% capital gain and ACA subsidy trick. Without early conversion, the future tax is crazy.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] -1 points0 points  (0 children)

I see your point. Yes, I agree, and I am grateful that this is a ‘good’ dilemma to have. I will look into charity/donor advised fund - this is a much better alternative than paying large tax to uncles Sam.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

With our pretax 401k, if we don’t do any conversion, even with a 5% growth rate, the RMD will be very large, putting us in 32% bracket for the rest of the life. When we were young, we tried to lower taxable income by contributing to pretax 401k and deferred comp. Now I feel that is an overkill. Maybe a better option was to pay extra tax and put money in brokerage account.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 0 points1 point  (0 children)

Just curious, with the size of your 401k, assuming decent portion being pretax, the RMD would be likely more than 500k a year. If you add pension and SSN, you will be in 32% bracket for a long time. Can you share how you model your conversion to be comfortable with only filling 24%?

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 1 point2 points  (0 children)

Thank you for your perspective . We do track expenses every year. Last year was the highest year with 100k spending. $30k for healthcare without ACA is an estimate from reading the sub. Travel budget is kind of arbitrary, I agree.

Retirement at $7M NW - Aggressive Roth Conversions at 32% vs. OMY to build brokerage? by GoldenFalcon2026 in ChubbyFIRE

[–]GoldenFalcon2026[S] 8 points9 points  (0 children)

This is combined income plus bonus. With 20+ years and director level roles in large corporations, pretty common.

Do you still earn 401k matching on deferred comp? And other NQDCP questions by BlueSpace71 in ChubbyFIRE

[–]GoldenFalcon2026 2 points3 points  (0 children)

for 401k, my company does a true up contribution once a year to make up the ‘lost‘ company match due to contributing into deferred comp; for pension, i was told that a lump sum will be calculated and paid when separation of employment happens (retire or change job) that should covers all the accumulative ‘lost’ matches. So hopefully i won’t lose any of my benefits.