How to Vote with Your Retirement Contributions

These days, a lot of us are looking at each other in campus hallways and r/Professors and asking what we can do about the political situation. Currently, alongside many other very important but less professionally-relevant affronts: NIH and NSF study sections are being cancelled without warning, professors have been declared the enemy, expertise is being devalued in federal appointments, and colleges and universities are being taken over by unqualified political hacks. Of course, some of us were likely upset in prior administrations and may have wanted to do something about that too. I have my own strongly held opinions about which of those views are more justified, but that’s not what the rest of this post is about. Instead, I present to you a strategy to use your retirement savings to support or deny support to federal administrations based on your feelings about them. What’s more, if done correctly I think this strategy is likely to have minimal effects on your retirement bottom line.

The TL;DR is this: Those of us with employer-sponsored retirement plans (or IRAs, or HSAs, or 457(b)s) often have a choice of whether to characterize our retirement contributions as traditional/pre-tax or Roth/post-tax contributions.The choice between these options is effectively whether to pay taxes on our income now or defer it until later. If you make these choices based on whether or not you support the administration in power, you can effectively withhold significant taxes from administrations you don’t like and instead give them to administrations you do like.

Let’s Review Some Basics

Traditional vs. Roth Retirement Contributions

IRAs, 403(b)s, 457(b)s, 401(k)s, and every other dumb acronym or statue section number shorthand we use when discussing investing essentially all work by freeing you from taxation as your investments grow (so you aren’t taxed on capital gains when you sell profitable investments) and also giving you a tax break either at the time of contribution (in the case of traditional contributions) or at the time of withdrawal (in the case of Roth). (HSAs if used to cover medical expenses give you all three advantages – hence the label ‘triple-tax advantaged’ that’s frequently applied to them – but they’re less relevant to the present discussion.)

This means that when it comes to your retirement contribution, you have some control over when and how much you pay in taxes. If you want to reduce your taxes in a given year, contribute more to traditional retirement accounts; if you want to pay more taxes in a given year (instead of later), contribute more to Roth retirement accounts.

Review: The Three-Legged Stool of Retirement

Mind you, whether Roth or traditional makes the most financial sense for you depends on your current salary, your spouse’s salary if applicable, your savings rate, whether you have a pension, what state you currently live in or plan to retire in, and lots of other factors beyond the scope of this post. I’ll write a full treatment of the subject for an academic audience eventually. 

For now, I’ll just note that there are great benefits associated with having some funds in both traditional and Roth. The ‘three-legged stool of retirement’ concept refers to the benefits of having some retirement funds in three different retirement fund buckets: traditional, Roth, and taxable brokerage funds. 

This is best considered in terms of how you’ll file taxes in retirement. Assuming that the United States of X at that time still uses a similar tax structure with an untaxed standard deduction (currently $15,000 for single filers and $30,000 for married filing jointly filers) followed by income brackets with progressively higher taxation rates on each marginal dollar, one tax-optimal strategy is to withdraw traditional retirement funds to fill up the standard deduction, meaning you will never pay income taxes on this money. It probably also makes sense for most people to fill up other very low tax brackets like the 10% (currently the next $11,925 / $23,850; see link above for all current tax brackets) and 12% (currently the next $36,550 / $72,600). In this way, you could have an effective taxation rate of 8.8% if your withdrawals hit the upper bound of the 12% bracket exactly, which is a great deal. (Note I’m ignoring social security here since that makes things unnecessarily complicated for this post’s purposes. I’m also assuming tax brackets in retirement are the same on an inflation-adjusted basis as they are now.)

If you don’t plan to retire on more than $63,475 per year (single) or $126,950 (joint), you can probably stop there. However if you hope to earn more in retirement, there are advantages to having funds in Roth and taxable brokerage accounts as well. Roth makes a ton of sense if you think you will be in a higher marginal tax bracket in retirement than you are currently (so load up on Roth during grad school, postdoc, and during low income years if you can). If that’s the case or if you just make too much for a traditional IRA but are eligible for a Roth IRA, then being able to withdraw Roth dollars to supplement that income without additional taxes in retirement is a great option. 

A sometimes underappreciated also great option is to withdraw from taxable brokerage funds. These funds are subject to long-term capital gains taxes (if you’ve held the investments for at least a year), not personal income taxes, and capital gains taxes are far more generous to those with accounts in the range academics are likely to have. Plus, you only pay taxes on the profits, not the original purchasing price. Finally, taxable brokerage funds have significant advantages for charitable donations and for passing on inheritances. 

Since these three types of investment funds are taxed at different times and at different rates and have different withdrawal rules subject to different penalties, it can be advantageous to have at least some funds available in all three buckets. So most of us can probably get some benefit from having funds in at least a combination of traditional and Roth accounts.

Ok, now that we’ve eaten our broccoli of basic financial education, let’s get to the main point.

How to Vote with your Retirement Contributions

Traditional During Favored Administrations, Roth/Brokerage During Disfavored Administrations

This is the crux of the proposal. To vote with your tax dollars, you should preferentially make traditional retirement contributions during administrations you don’t like, and Roth contributions during administrations you do like.

Note however that although these dollars will look the same in your TIAA account, Roth dollars are worth more than traditional dollars in terms of retirement spending power since they’ve already been taxed. If you want to match the purchasing power of your contributions, you’d have to make assumptions about your marginal taxation rate now and in retirement. For simplicity, let’s assume you expect your marginal dollar to be taxed at the 22% rate both now and in retirement. In that case, each traditional dollar is worth 78% of the value of a Roth dollar. You can also scale your contributions to match so that you’re left with the same amount of after-tax take home pay regardless of whether you contribute to traditional or Roth – once more assuming a 22% marginal taxation rate, contribute 78% as much to Roth as you would to traditional.

What about Taxable Brokerage Contributions?

For this discussion’s purposes, you can treat taxable brokerage contributions as equivalent to Roth since they’ll both be taxed in the year you make the contribution. However, note that taxable brokerage contributions can be subject to tax drag to a degree depending on whether you trade frequently and the tax efficiency of your holdings. The upside is that you can access these funds whenever you want (as you can Roth contributions but not gains).

What about Roth Conversions?

Roth conversions allow you to convert pre-tax traditional dollars to post-tax Roth dollars at a time of your choosing – you’ll just pay ordinary income taxes on the converted dollars at your current marginal rate. Note this needs to be done in an IRA, not a 403(b) or other employer-linked retirement account. 

This means the same logic could apply to Roth conversions as to Roth contributions – if you wish, you can concentrate them during favored administrations. Just be careful as doing so with too much vigor in a given year could drive you into a higher marginal tax rate, potentially erasing the benefit of doing so.

Answers to Questions You May be Screaming at Your Screen Right Now

Will This Screw Me Over in Retirement?

Probably not. It depends on your retirement plan and your assumptions about the future distribution of presidential election results. However, since Nixon ran his Southern strategy in 1972, effectively ushering in modern presidential politics, there have been 8 Republican administrations (including the second Trump administration) and 6 Democratic administrations. It’s reasonable to assume that the future distribution will be roughly 50/50. If that’s how you want to balance traditional vs Roth/brokerage contributions in retirement, that could work very well.

If you want a different balance of traditional vs. Roth/brokerage, you also don’t need to go 100% traditional during disfavored administrations and 100% Roth/brokerage during favored administrations. Depending on your retirement vehicles and savings rate, that may not even be possible. The point is to tilt more of your contributions in the direction suggested above. If you want lower Roth balances than 50/50, you could keep some Roth contributions during disfavored administrations and keep some traditional contributions during favored administrations.

Probably the biggest downside of this approach is that it will make your tax buckets lumpier based on the sequence of returns received on contributions during administrations of different parties. Of course no one knows exactly what that will be, but the variance in the balance of traditional/Roth/brokerage funds at your age of retirement will be higher than if you had a constant contribution strategy through the years, which could work for or against you. But you can always adjust your contributions in the future if the distribution becomes lopsided compared to your preferred allocation.

Will This Make Any Real Difference?

Not really. But the chance that your vote sways an election is also incredibly miniscule, but we still think it’s important to vote. Investing in funds designed to avoid certain unethical industries and companies likely makes no difference to their bottom line, but tons of people still do it. This is just another way to live your life consistent with your values.

But ok, let’s imagine that every academic in the U.S. had the same political opinions, and all contributed the tax-adjusted equivalent of the max 403(b) contribution to their retirement every year, all marginal contributions were from the 22% tax bracket, and all followed the strategy above. Obviously none of that is true, but bear with me in the interest of estimating an upper limit difference we could make. According to the BLS, in May 2023 there were 1,267,700 individuals working in educational instruction and library occupations at colleges, universities, and professional schools, and 363,580 individuals in the same occupations at junior colleges, for a total workforce of 1,631,280. The current (2025) 403(b) contribution limit is $23,500. If all of us contributed that maximum pre-tax to our 403(b)s at the same time, we would collectively contribute $38,335,080,000 (>$38 billion!) to our 403(b)s, deferring $8,433,717,600 (>$8.4 billion) in federal taxes assuming all contributed dollars were counterfactually marginally taxed in the 22% bracket. That’s all money that would flow into the federal treasury if we made tax-adjusted identical contributions to our Roth or taxable brokerage accounts.

Of course, that’s a drop in the bucket compared to the fiscal year 2024 total expenditures of $6.8 trillion and federal deficit of $1.83 trillion, but it’s something. And of course there’s nothing stopping folks in every profession from adopting the same strategy; I just doubt many people disconnected from academia read my blog.

I’ll also note that the majority of federal expenditures don’t depend very much on who is president. Two-thirds of the US federal budget is mandatory spending like Social Security and Medicare, which is unlikely to substantially change between administrations absent a major and highly controversial legislative proposal. However, since those obligations will be funded through deficit spending if federal receipts are insufficient to fund them, I view marginal differences in taxable income as more likely to affect discretionary federal spending.

What About State and Local Taxes?

State and local taxes treat pre-tax vs. Roth/brokerage funds in similar ways as federal taxes. What if you support the federal administration but not your state administration or vice versa? That does complicate things somewhat. My only answer is that when federal and state administration both tilt the same way in your esteem, this should work well; when they tilt in opposite directions, you’ll have to decide which is more important or else just skip this strategy until your situation changes.

Final Thoughts

If you made it this far, you may be wondering if I actually intend to follow this proposal in my own retirement contributions. To that I can answer a definitive maybe. For some time now I have prioritized traditional retirement contributions over Roth so that my withdrawals can be taxed at lower rates in retirement than they would be now as outlined above. On the rare occasion when I have extra money to invest above and beyond my considerable limits on pre-tax contributions due to having access to a mandatory employer match, supplemental 403(b),  governmental 457(b), and HSA, I put it in taxable. However I also have a decent amount of Roth money through maxing my Roth IRA every year and making some Roth 403(b) contributions in previous years, so I know those funds will grow and be there for me when I need them.

So am I following the proposal above during the current administration? Yes, but only by doing what I was going to do anyway. My feelings about the administration currently in power will just be a reason for me to stick with this plan for the next few years and I’ll reevaluate after the 2028 election (which simultaneously can’t come soon enough and also I’m exhausted just thinking about it).