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I have developed the following strategy to minimize taxes and maximize benefits upon retirement. I'm interested in critiques of the methodology, as I've only recently seen it referenced anywhere in print.

Background: I am married - approximately 25% of assets in IRA and 401K
- approximately 50% of assets post-tax liquid
- Balance in home equity

Fortunately, I've been in a position where I make too much to open a Roth IRA (Not good for taxes, but good for current income). I'm a voracious saver, but learned belatedly during the tech crash that a strategy for withdrawl is either as important or MORE important than a strategy for saving!

My current strategy:

1. Live primarily off savings after early retirement until I can start to withdraw from IRAs and 401Ks at 59.5 or later. ( I can take it earlier by equal distributions - my goal is to make it continue to earn tax free as long as possible - and I don't need it.)

2. Limit income through investment vehicles each year to keep me below the 28% rate. Use the excess between that income and the maximum 28% rate to roll traditional IRA dollars into a Roth IRA, keeping taxes to a minimum and paying the rollover taxes out of "after tax" dollars.

3. Continue this until as much IRA money has moved from the Traditional IRAs to the Roth vehicles.

The purpose of this is to:

1. Manage your taxes to never be above 28% (Fed) This appears to be the
only solid way to tilt the Roth advantage to your side (I'm in a
high tax bracket now.)
2. Use post tax dollars to pay taxes on rollovers to Roth -
maximizing the later "tax-free" withdrawls.
3. Keep all possible assets earning "tax free" as long as possible.
Later, when more funds are needed, the Roth can be tapped without
tax concerns.

I'm very interested in people's assessment of this strategy. I've built some fairly detailed spreadsheets on how this would work and believe it to be solid. Please poke holes! I'd rather find out any nasty surprises now than later....

Thanks, DoneBy51
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