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WealthChem

Which tax buckets hold your retirement money?

Two people can retire with the same balance and keep very different amounts after taxes. The difference is where the money sits, tax-wise — and sorting your accounts into four buckets takes about two minutes.

Nothing you enter is saved or sent anywhere — the math runs entirely in your browser.

Brokerage, savings, CDs — taxed as you go

401(k), Traditional IRA, pension — taxed later, on withdrawal

Roth IRA, Roth 401(k), HSA — *qualified withdrawals, current law

Cash-value policy loans*, annuities, Social Security — rules vary by product

Your tax-bucket mix

$0

total across the four buckets

Retirement savings by tax bucketTaxable 10%, Tax-Deferred 80%, Tax-Free (qualified withdrawals, current law) 10%, Insurance and Other 0%. The largest bucket is Tax-Deferred at 80%.80%Tax-Deferred
  • Taxable10%
  • Tax-Deferred80%
  • Tax-Free*10%
  • Insurance & Other0%

Your mix leans on Tax-Deferred (80%)

Most of your future withdrawals will follow the Tax-Deferred bucket's tax rules. Adding to the other buckets over time gives future-you more room to choose where each year's income comes from.

Your next moves (educational, not advice)

  1. Read how RMDs and future tax rates affect the taxed-later bucket — withdrawals there are generally taxed as ordinary income, and required distributions eventually take the timing out of your hands.
  2. A tax professional can discuss whether Roth conversion timing fits your bracket — conversions add taxable income in the year you make them.
  3. Look into whether Roth contributions fit your plan going forward, to start building a bucket of potentially tax-free qualified withdrawals.
Want to talk through your result? No pitch, no obligationRead: what's actually tax-free — and what isn't

WealthChem tax-bucket worksheet — educational estimate only

Taxable: $20,000 (10%) · Tax-Deferred: $160,000 (80%) · Tax-Free*: $20,000 (10%) · Insurance & Other: $0 (0%)

Total $200,000. Largest bucket: Tax-Deferred at 80%. Tax-Free* means qualified withdrawals under current law; policy loans are potentially tax-advantaged and reduce cash value and death benefit. Talk with a tax professional about your situation.

Generated by wealthchem.com/tools/retirement-buckets. Not financial or tax advice.

The formula, in the open

Your Savings Mix = Taxable + Tax-Deferred + Tax-Free* + Insurance & Other* *Tax-Free: qualified withdrawals, under current law *Insurance & Other: policy loans potentially tax-advantaged; rules apply
Tax-Free* means qualified withdrawals under current law — for example, Roth money after age 59½ once the 5-year rule is met, or HSA dollars spent on qualified medical expenses. Insurance & Other follows product-specific rules: cash-value policy loans can be potentially tax-advantaged under current law, but loans and withdrawals reduce cash value and death benefit.

Assumptions

  • Balances are sorted by how withdrawals are generally taxed under current federal law — not by what they're invested in
  • Roth and HSA dollars count as tax-free only for qualified withdrawals; non-qualified withdrawals can be taxed and penalized
  • Tax law can change — these buckets describe today's rules

Limitations

  • Shows where money sits, not its after-tax value — a tax-deferred dollar buys less in retirement than a same-size dollar of qualified tax-free money
  • Doesn't model state taxes, early-withdrawal penalties, RMD timing, or product fees and loan interest
  • Education, not tax advice — a tax professional can apply these buckets to your actual return

Want the concept behind the math? Tax-free retirement income: what is actually tax-free and what is not? →