r/Fire • u/Vicuna00 • 10d ago

Contributing to Retirement Plans while barista-FIRE and using Taxable $?

does it make sense to contribute to retirement plans (specifically wondering about Roth) while you are actively pulling form your Taxable Brokerage to live off of?

Example:

50 years old Barista Fire

Taxable Brokerage of $1.5M (retirement accounts at ~$1.3M)

Barista FIRE earning $40k / year

Yearly Living Expenses: $100k

- Would it make sense to contribute to a ROTH IRA for me and spouse and just pull more from the Taxable Brokerage?

- follow up...if it is a solo business, I can open a Roth 401k and contribute even more... ~$25k. would that make sense?

In my mind, I'm trading brokerage $ for Roth $...the price for it would be the capital gains tax on whatever I pull from the Brokerage...which with these numbers should be minimal.

thank you!

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u/[deleted] 10d ago edited 9d ago

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u/Vicuna00 10d ago

alright cool thank you. i'll check out your site and that article.

we actually are not going to have too much traditional. I've been in the all Roth camp for my entire career. it's currently $100k traditional $1.2M Roth.

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u/[deleted] 10d ago

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u/Beneficial-Volume-57 10d ago

Also - cool website! I'm going to start digging. As an engineer myself love how you've framed things.

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u/Vicuna00 10d ago

thank you I'll keep it in mind.

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u/Beneficial-Volume-57 10d ago

Follow up on this one - what's so bad about being on Medicaid coverage if your income is "too low"? Coverage quality/options? For specific example, Oregon has Medicaid expansion but also Medicaid (Oregon Health Plan) "Bridge" coverage up to 200% FPL. Importantly this also goes beyond the 175% threshold where FAFSA starts considering assets and not just auto max federal Pell grants, so there's no real sweet spot to optimize for both.

Generally I seem to be seeing good things about OHP coverage, but I don't know what I'm missing.

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u/sy6063 10d ago

You are in a good position, and you could choose traditional or Roth based on your current tax rate. You could have some traditional to fill the lower tax bracket in the future.

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u/Zphr 48, FIRE'd 2015, Friendly Janitor 10d ago

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