AUTHOR: Rick Connor on 4/27/2026 FIRST: Mark Crothers on 4/27 | RECENT: Kenneth Tobin on 4/29
Comments
Eileen, thanks for reading and commenting. We spent the past weekend with a good friend who lost her husband at about the same age. It sounds like you have a strong understanding of your finances, and a great plan for your retirement. I hope your child's health situation gets better, they are lucky to have a strong, loving Mom.
Your original question was why was the marginal tax bracket used in the calculation. Tax is calculated using marginal rates (or sometimes LTCG or NIIT rates - but those rates are based on the bracket). The effective tax rate will change as your calculated tax bill changes, but it has no impact on, or place in, the calculation.
Because that is how taxes are calculated. Effective tax rates have no role in calculating an individual or couples tax. It is an artifact, or result, of the tax return. I'm not aware of a single IRS form or schedule that uses an effective tax rate.
Bill, thanks for reading and commenting. I'm a fan of Roth IRAs for many of the reasons you mention. Tax diversification of your retirement income is a very useful lever.
Patient, thanks for reading. I have no regrets about opening the Roth IRAs when we did. I thought it might be interesting to provide a real life example after 10 years.
Comments
Eileen, thanks for reading and commenting. We spent the past weekend with a good friend who lost her husband at about the same age. It sounds like you have a strong understanding of your finances, and a great plan for your retirement. I hope your child's health situation gets better, they are lucky to have a strong, loving Mom.
Post: Traditional or Roth
Link to comment from August 30, 2026
Your original question was why was the marginal tax bracket used in the calculation. Tax is calculated using marginal rates (or sometimes LTCG or NIIT rates - but those rates are based on the bracket). The effective tax rate will change as your calculated tax bill changes, but it has no impact on, or place in, the calculation.
Post: Traditional or Roth
Link to comment from August 30, 2026
Absolutely agree with your last sentence. I'm running some numbers on widows penalty for us, and will probably publish some results.
Post: Traditional or Roth
Link to comment from August 30, 2026
Boomer, thanks for your real life experience.
Post: Traditional or Roth
Link to comment from August 30, 2026
Because that is how taxes are calculated. Effective tax rates have no role in calculating an individual or couples tax. It is an artifact, or result, of the tax return. I'm not aware of a single IRS form or schedule that uses an effective tax rate.
Post: Traditional or Roth
Link to comment from August 30, 2026
John Urban wrote an article about the Widows Tax and the role of Roth IRAs about a month ago.
Post: Traditional or Roth
Link to comment from August 30, 2026
James, I've always enjoyed your articles. I'm happy we opened Roth IRAs when available and will continue to look for opportunities to convert.
Post: Traditional or Roth
Link to comment from August 30, 2026
Mark, thanks for reading and commenting. It sounds like your conversion approach and ours is very similar.
Post: Traditional or Roth
Link to comment from August 30, 2026
Bill, thanks for reading and commenting. I'm a fan of Roth IRAs for many of the reasons you mention. Tax diversification of your retirement income is a very useful lever.
Post: Traditional or Roth
Link to comment from August 30, 2026
Patient, thanks for reading. I have no regrets about opening the Roth IRAs when we did. I thought it might be interesting to provide a real life example after 10 years.
Post: Traditional or Roth
Link to comment from August 30, 2026