Almost every high earner I meet has already decided the pretax question before we sit down. The logic goes like this: "I'm in the top bracket now. I'll obviously be in a lower one when I retire. So I defer everything, take the deduction at today's high rate, and pay tax later when my rate is lower." Clean. Intuitive. And resting on an assumption most people never actually examine — that the lower bracket is a fact waiting for them, rather than a forecast they're making about a future they can't see.
I'm going to make my own bias clear up front, because I'd rather you argue with a stated position than a hidden one: for a high earner with a long runway to retirement, I lean toward paying the devil you know. Lock in a rate you can actually see today rather than betting decades of deferral on a rate you're guessing at. That's a preference, not gospel — and there's a real exception I'll get to. But let me explain why the "lower bracket later" assumption is shakier than it feels.
The Lower Bracket Isn't Promised
Here's the part that surprises people. A large pretax balance doesn't sit quietly and wait for you to withdraw it gently. Once you hit your seventies, required minimum distributions force money out on a schedule the IRS sets, not one you choose. That forced income stacks on top of Social Security, any pension, and whatever else you're drawing — and it can push a "retired" couple into a bracket that looks a lot like their working years, sometimes higher.
Then there's the quieter one nobody plans for: the surviving spouse. When one partner passes, the survivor often keeps a similar income but files single, where the brackets are far less forgiving. The same dollars, taxed harder, at the worst possible time. The "lower bracket" that justified a decade of deferral can quietly evaporate exactly when it's needed most.
The lower bracket in retirement isn't a fact waiting for you. It's a forecast — about tax law, your income, and your spending, twenty-five years out.
None of this means your rate will be higher later. It might genuinely be lower. The point is narrower and, I think, more useful: "I'll be in a lower bracket" is a prediction about tax law, your own income, and your spending a quarter-century from now — three things nobody forecasts well. Building a decades-long strategy on top of it, as though it were settled, is a bigger bet than it feels like.
And the Math Was Never a Wash Anyway
There's a second assumption hiding underneath the first. Even setting brackets aside, the textbook case for pretax quietly depends on something almost nobody does. When you go pretax, you save tax today — that's money left in your pocket right now. For pretax and Roth to come out equal, that saved tax has to get invested, at the same return, for the same years, growing alongside the retirement account. On paper, that's what makes the two "a wash."
In practice, it doesn't happen. The tax you saved shows up as a little more take-home pay or a bigger refund, and it gets absorbed into life. Nothing forces that money into a brokerage account the way a payroll deduction forces your contribution in.
Roth's weakness on paper is its strength in practice: it doesn't depend on you being disciplined. It removes the one variable you're least likely to manage — your own behavior.
The Honest Exception
Now the part that keeps this from being dogma. The closer someone is to retirement, the less hazy the picture gets. For a 63-year-old retiring next year, "lower bracket later" isn't a wild guess — it's a short, visible bridge, and deferring into it can be exactly right. My preference for paying now is strongest where the runway is long and the fog is thick. It weakens as the runway shortens and the numbers come into focus.
So What Do You Actually Do?
Because the answer depends on so many moving, unknowable inputs — future rates, future law, your own income and spending — the smartest structure usually isn't all-in on one bucket. Money spread across pretax, Roth, and taxable gives you levers to pull later, whichever way things break. The goal was never to guess the winning bucket — it's to build something that isn't badly wrong under any scenario you can't control.
That's the part I actually get paid for — not to pretend I know where rates are headed, but to weigh these variables against what I know about a client and what they know about themselves: their income, their discipline, their timeline, how they're wired. "Pay the devil you know" is where I start for a long-runway high earner — not where every conversation ends. The math narrows the options. The judgment, yours and mine together, makes the call.
Joshua Staph, CIMA®
Founder, Verak Private Wealth · joshua@verakprivatewealth.com
· verakprivatewealth.com
The views expressed are those of the author and are for informational and educational purposes only. Not investment, tax, or legal advice. Tax treatment depends on your individual circumstances and may change under future legislation; consult a qualified tax advisor before acting. Any figures are hypothetical and not a projection or guarantee of future results.
Securities offered through Cambridge Investment Research, Inc., Member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Verak Private Wealth LLC and Cambridge are not affiliated.