Couple With $1 Million in 401(k)s Questions Halting Contributions Over Future Taxes
Updated
Updated · Yahoo Finance · Sep 18
Couple With $1 Million in 401(k)s Questions Halting Contributions Over Future Taxes
1 articles · Updated · Yahoo Finance · Sep 18
Summary
$1 million in combined 401(k)s led a couple in their early 40s to ask whether they should stop traditional contributions and shift future savings to Roth accounts.
Their concern is that the balance could reach roughly $3 million to $3.5 million in 15 years, potentially creating higher taxable income during retirement.
Reddit responses largely argued the nest egg is not too large, with some saying the bigger risk is under-saving rather than owing taxes on withdrawals.
More substantive replies focused on required minimum distributions from large pretax accounts and warned the couple's assumed 6% withdrawal rate may be too aggressive versus a 4% benchmark.
The broader takeaway was that $1 million is not a universal cutoff for ending traditional 401(k) contributions; the right mix depends on tax planning, withdrawal needs and retirement timing.