[kjam22]

The lie has been "invest in 401k's or IRA's as a way to reduce your tax, and then when you are living off of those accounts you'll be in a lower tax bracket anyway." That has not proved to be true in my case.

I think a savy investor should pay the tax on income as they go.

[Rusty0604]

It certainly proved right in my case. I not only saved taxes by being in a lower federal income tax bracket, but I moved from a high state income tax to a no state income tax.

[Mr. Jeeves]

I think a savvy investor should pay the tax on income as they go.

So do I. In fact, the government all but explicitly states that money held in tax-deferred accounts is not really yours until all the taxes are paid. Making their path to eventual confiscation and redistribution very smooth.

[sparklite2]

The lie has been “invest in 401k’s or IRA’s as a way to reduce your tax, and then when you are living off of those accounts you’ll be in a lower tax bracket anyway.” That has not proved to be true in my case.

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I’ve managed to do it for the last fifteen years. You can withdraw from your IRA an amount equal to half your SS income without triggering any tax, assuming you have no other income. I can just about live on SS alone, so the IRA money is gravy. Live below your means and it works.

[ironman]

No one size fits all, unfortunately the tax code is too complicated. There are tools that can help such as Optimal Retirement Planner.

https://www.i-orp.com/delta/index.html

[grania]

I'm with you. I'm retired, and the last thing I want is more taxable income. If I stay below a certain threshold, there are some tax advantages (federal and county/state/local) for Seniors.

If the taxes on retirement savings aren't paid ahead of time, you're at the mercy of the taxman for any new laws that are enacted.