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One factor that you didn't mention is how much you have already saved for your retirement. If you already have a huge next egg then diversifying it to taxable accounts could make sense, but if you just really got started saving a few years ago and have a modest nest egg then I would have a hard time seeing how giving up the 25% deductible 401K contribution would be a good choice.

Eventually having a combination of account types is very desirable to give you more flexibility in case your situation changes. you have a year with high expenses like buying a car, or the tax laws are very different in the future. Having some money n a taxable account may also allow you to reduce the taxes paid on your social security income.

...I investing fairly heavily for retirement and will benefit from a defined benefit plan with a result that my best guess is my income in retirement will be similar to that while working..... Any thoughts? ...

I would take a hard look at your assumption that you will need the same income in retirement as now. While you will have some additional expenses you will not have, some taxes(like social security), retirement savings, and possibly no mortgage payment if you have a paid off house by then. Just these could easily add up to a third or more of your current income that will not be needed in retirement.

You also need to consider your income requirement throughout your retirement and not just the day you turn 65. By the time you are in your mid seventies you will naturally slow down and as long as you stay in relatively good health you may not spend all that much each month even if you have ample means.

In addition there is a very significant chance that you won't live to retire or to be retired very long. Within about the last year a neighbor of mine and a co-worker died in their late 50's or early 60's just a few years before they would have retired. Here is a link to a very simplistic life expectancy calculator. You can search with Google for more complex ones. Do not just focus only our average life expectancy. Look the percentage chance that you will not live to be say 65, or 75.

You might want to recrunch the numbers to see if a more modest retirement income goal is reasonable and if you could plan for less and either retire early or spend and enjoy more now.

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