No. of Recommendations: 1
You guys are fortunate in that your nest egg is large enough, early enough that we are now in the realm of opinion. As an example; your 425K 401k will easily grow to $4mm plus by you mid-fifties. At age 59 1/2 you are probably going to facing the equivalent of a min, mandatory distribution around $150k to $175k per year. Wait until 70 1/2 & that min. distribution will jump to some number in excess of $500k per year.


If you believe that our federal tax system of graduated brackets will more-or-less still be in place in 15 - 20 years; the time when you might first start tapping some of these assets; you should be running multiple scenarios on an after tax basis. Doing so will immediately lead to several conclusions:

1. It is better to put the money in an after tax account using a LTBH strategy such that the max. tax you pay is 20% versus 39.6%.

2. You will become more and more desirious to make investments outside the stock markets for several reasons:

a. The stock market is only one place to invest.

b. Other investments in real estate & natural resources will start to look much more advantageous particularly from a taxation (reduction as well as credits) basis.

I am by no means suggesting that you abandon your current positioning and leap elsewhere; rather I am suggesting that you run more models and start on a long term program of re-orienting yourselves towards (1) and (2) above. There is no rush right now but here will be 10 - 15 years from now.

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