I think this is the critical factor
Most people won't take the time to formulate a personal feeling on income tax rates, lol! I am good with any strategy as long as somebody is comfortable with their logical belief of how things will transpire and they employ a strategy founded on those beliefs.
For me personally, I like to think of it as not tax rates as a whole but where will MY tax rate be.
My scattered thoughts on tax planning for early retirement:
- If I'm retiring early I won't be withdrawing $250k per year - I will live a modest retirement (if my family of 4 can survive on $45k now how would I suddenly spend that much money anyways as a family of 2)?
- Apparently we now think that $80k in taxable income is a middle class number that should only be taxed at 12%. I think now that these tax cuts in place it will be very hard to roll them back. Everybody thinks the RICH can afford more taxes - but they themselves don't want to pay more. No politician wants to be the one who raised taxes on middle class families.
- Thus - if I can have a slightly below average middle class early retirement...taxes are largely a non event - I don't pay them now - and I don't pay them then
- I am finally conceding to Roth in 2019 as I want to diversify my accounts and that 12% today is just too darn enticing. I won't willingly pay 22% though - no thanks, I'm hoping that through savvy strategies I will never pay 22%
- One of my other fears of Roth is that sometime down the line a politician will say this was a terrible idea. There are millions of dollars in earnings that are un-taxed...people weren't supposed to get rich via Roth. And then they'll put some limit and say you owe taxes on roth balances above $250k or $500k or something like that. I am fully aware that this is a conspiracy theory but for me I just don't want to be too heavy in Roth.