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Greetings, Gbaker, and welcome.

<<My wife and I are 30 yrs old and we've accumulated about $200,000 over the last five years in mutual funds, 401k, 403b, Roth-IRA's and individual stocks. About half is in tax-deferred accounts and half is in taxable accounts. From a distribution standpoint, should we continue to max out the tax-deferred savings or would it be in our best interest to cut back on it and invest primarily in taxable accounts and the Roth-IRA's? I want to maximize growth but at the same time minimize the tax hit when we retire. I suspect our tax bracket will be higher when we retire than the current 20% for long-term gains.>>

Anything in a tax-deferred investment will be taxed at ordinary rates on withdrawal. Taxable accounts can be structured to be mostly taxed at lower capital gains rates on gains, and the Roth can escape all gains taxation. Whether you should concentrate on taxable investments is for you to decide based on your present and future tax brackets. If you expect to be in a much higher bracket at retirement, then perhaps taxable investments now might make sense. Only you and your tax advisor can run those numbers, though.

You may want to read Step 4 of the 13 Steps to Foolish Retirement Planning to see if a taxable investment in lieu of 401k/403b contributions beyond an employer's match make sense for you. You can find that missive at:

http://www.fool.com/Retirement/Retirement.htm

That step won't solve your dilemma, but it may help.

Regards…..Pixy


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