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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? →