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I will make about $11k this year and approximately the same next year. (I bought 5 years when I was working from 1999-2005. My 5 years only counts if I put in an actual 10 years. And by getting an actual 10 years in, we will be eligible for health care in retirement.

Presumably, you would also be eligible for some type of pension, in addition to health care?

The ESOP was a benefit added when they took away the pension. DH gets employer stock at the end of each year (not a publicly owned company) based on his years of service and salary. Each fall, we can rollover a certain percentage. This year it's 8% (but might be reduced based on total redemptions). I have to request the rollover shortly. When he leaves the company, the stock price will be locked in, and he can roll it over to an IRA and it will be given within five years depending on how you leave the company.

Since it's not a publicly owned company, he's probably not going to be able to use the NUA process - the company has to be publicly owned. There are some questions and comments at the end of the Kitces article about people with private company stock. That said, it's always going to be a good option to keep in mind if the company goes public before he rolls it to an IRA.

It didn't occur to me that it didn't have to be an all or nothing decision. I like the idea of maybe doing half regular and half Roth.

Given the additional information you've shared about the company being private, and therefore, pretty much locking in the ESOP to a traditional account, I'd suggest going all Roth, if you can stand the net income loss. Just given your current balances in Traditional accounts (no additions) and a 6% growth rate, you are looking at a $230k initial RMDs when you hit 70 1/2. And that's not including your potential pension, SS, or, as already pointed out, any additions to his ESOP and 401(k). Here's an RMD calculator you can play with if you want to make different assumptions:

Projecting taxes in the future is always a crapshoot, since, as we have seen recently, Congress can change the law at any time, but under current tax law (which has changed the inflation rate for things like standard deductions and the brackets to the chained CPI), we can probably expect a 2.5% increase for the brackets/. Under current tax law, where the rules revert to the old rules in 2026, and making a really broad assumption that your SS and pensions would eat up the standard deduction and exemptions allowed, that RMD would put you well into the 28% bracket. If the new rules/rates become permanent, you would be well into the 24% bracket. And assuming that, at some point, one of you will be filing singly, the single filer will likely be in one of the top 2 brackets.

In any of those cases, putting money into a Roth account now, even at 22%, would be a savings. You would have to be putting money in at 24% before it might just be a wash.

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