These are good discussions --- and they really need to be evaluated on a case by case basis.... there is no one size fits all!
Most people will have Social Security --- and maybe a pension --- and then will have some dividend and interest income (hopefully!).... But for the most part your income should be lower when in retirement mode. Think about it just for a minute.... if you're 40 now --- you're going to work 25 more years -- SURELY your income will be higher 25 years from now...
So when they say -- withdrawals from a 401K should be taxed at a lower rate -- for the most part that is true. Remember that it takes a MILLION DOLLARS today to generate about a 5% taxable return. So that's only earning 50 grand a year taxable income. Dividends are only taxed at 20% maximum today..
How many folks out there retire with a million bucks? I don't know.
How many retire with 2 million?
My guess is most will be lucky to retire and have 750K in savings --- so maybe it's making 35K a year... that's not much "taxes" being generated... and considering some of it will be max tax rate of 20% -- Dividend income -- or Long Term Capital Gains @ 20%.... there's not much EARNED INCOME.
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