Quote:
Originally Posted by redpoint5
I'm probably conflating wealth and earning. Most people make it into the top 80% wealthy bracket, but they don't necessarily make it into the top 80% earning bracket.
I'll have to rethink my strategy.
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Wealth and Income are taxed very differently. The only real wealth tax is property taxes. For anything else wealth is only taxed when it is converted to income and then it is taxed at very favorable rates. Capital gains are taxed at 3 rates depending on income. The current rates for a couple are:
0% up to $83,000 per year
15% from $83,000 to $517,000
20% Above $517,000.
What percentage of people do you think make more than $83,000 in retirement off their investments? The vast majority of retirees pay nothing in taxes yet workers are told to not take a tax break today so that we can possibly get a tax break in the future that most people will never get.
Roths make sense for the very wealthy and people that need to tap retirement accounts before 59 1/2.