My impression is that the “Substantially Equal Periodic Payments” option is rarely a good idea in practice because it’s so inflexible in not letting you stop withdrawals later, potentially even hitting you with severe penalties if you somehow miss a single payment. I agree that most people are better off saving into a pretax 401k when possible and then rolling the money over to Roth during low-income years or when necessary. I don’t think this particularly undermines jefftk’s high-level point that tax-advantaged retirement savings can be worthwhile even conditional on relatively short expected AI timelines.
I prefer pre-tax contributions over Roth ones now because of my expectation that probably there will be an AI capabilities explosion well before I reach 59.5. If I had all or most of my assets in Roth accounts it would be terrible.
Why would money in Roth accounts be so much worse than having in in pretax accounts in the AI explosion case? If you wanted the money (which would then be almost entirely earnings) immediately you could get it by paying tax+10% either way. But your accounts would be up so much that you’d only need a tiny fraction of them to fund your immediate consumption, the rest you could keep investing inside the 401k/IRA structure.
Some altruistically-motivated projects would be valid investments for a Checkbook IRA. I guess if you wanted to donate 401k/IRA earnings to charity you’d still have to pay the 10% penalty (though not the tax if the donation was deductible) but that seems the same whether it’s pretax or a heavily-appreciated Roth.
My impression is that the “Substantially Equal Periodic Payments” option is rarely a good idea in practice because it’s so inflexible in not letting you stop withdrawals later, potentially even hitting you with severe penalties if you somehow miss a single payment. I agree that most people are better off saving into a pretax 401k when possible and then rolling the money over to Roth during low-income years or when necessary. I don’t think this particularly undermines jefftk’s high-level point that tax-advantaged retirement savings can be worthwhile even conditional on relatively short expected AI timelines.
Why would money in Roth accounts be so much worse than having in in pretax accounts in the AI explosion case? If you wanted the money (which would then be almost entirely earnings) immediately you could get it by paying tax+10% either way. But your accounts would be up so much that you’d only need a tiny fraction of them to fund your immediate consumption, the rest you could keep investing inside the 401k/IRA structure.
Maybe you want to use the money altruistically? To spend on labor, compute, etc?
Some altruistically-motivated projects would be valid investments for a Checkbook IRA. I guess if you wanted to donate 401k/IRA earnings to charity you’d still have to pay the 10% penalty (though not the tax if the donation was deductible) but that seems the same whether it’s pretax or a heavily-appreciated Roth.