Retirement Account Tax Diversification Visualizer
"See how combining Roth, Traditional, and Taxable accounts can reduce your future tax burden and boost your retirement income."
Tax diversification is one of the most overlooked aspects of retirement planning. This visual tool helps you estimate how different combinations of Roth, Traditional, and Taxable accounts can affect your after-tax income in retirement. Adjust your portfolio mix, tax assumptions, and withdrawal strategy to find the balance that keeps more of your money working for you, not the IRS.
Optional: Simulate rising tax environment
Tax diversification means spreading your retirement savings across accounts that are taxed differently, Roth (tax-free), Traditional (tax-deferred), and Taxable (capital gains). This gives you flexibility to choose where to withdraw from each year to minimize total taxes.
Why It Matters
- • Protects against unpredictable future tax changes
- • Enables smarter withdrawal sequencing
- • Helps control taxable income in retirement
- • Can increase longevity of savings by 10-15%
Example Scenario
With a 50/30/20 split (Roth/Traditional/Taxable) and moderate returns: Total pre-tax value: $1,000,000 After-tax spendable amount: $920,000
Optimization Tips
- • Consider Roth conversions in low-income years
- • Use taxable accounts for flexibility before 59½
- • Balance RMD requirements with tax planning
- • Review and adjust allocations annually