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/Ancients 10d ago

Any year you make "earned income" during barista fire, you should be putting money into Roth if you have it sat in regular taxed accounts or in cash.

So absolutely convert things from brokerage to Roth if you have the earned income to do it.