All content copyright © 2010-2024 Frank Revelo, www.frankrevelo.com
Infrastructure expense are those which cannot be postponed indefinitely, and which provide the foundation or infrastructure for a lifestyle, whereas discretionary expenses are those which can be indefinitely postponed. Examples of infrastructure expenses: mobile phone service; mailbox service; personal domain and website; storage locker; apartment rent for renters; mortgage, property tax, insurance, utilities and required maintenance for homeowners; taxes, insurance and required maintenance for automobile owners; medical insurance. Examples of discretionary expenses: food, clothes and gear, transportation, entertainment, etc. (Eating is non-discretionary, since it can't be postponed indefinitely without starving to death. However, there are plenty of ways to eat for free in modern society, so buying food is discretionary.)
The more expenses that are discretionary, the greater the flexibility and resilience in the face of unexpected financial setbacks and disasters. Also, there is a psychological tendency in most people to focus on discretionary expenses and ignore infrastructure expenses. This is why people get angry when food and gas prices rise, but ignore much more significant changes in medical insurance and housing costs. When most expenses are discretionary, most people can live happily within a small budget. Whereas when most of the budget is comprised of infrastructure expenses, the typical feeling is one of being poor, limited in options, and generally miserable. Staying within the budget becomes difficult for most people under these conditions. If the budget is a hard one—no savings, no credit cards, a monthly pension and everything paid for in cash—then it doesn't matter if staying within the budget is difficult or not, since the budget simply can't be exceeded. However, most people reading this page and planning for a lifestyle of long-term travel will be financing this lifestyle at least partly out of savings. For these people, it is very easy to exceed the budget by simply dipping into those savings faster than was planned, with the final result being to run out of savings too soon. It is thus essential for these people to reduce infrastructure expenses as a proportion of the total budget to the minimum level possible.
As of 2024, my infrastructure expenses are under $2500/year (storage lockers, mailbox, mobile phone services, bank accounts, domain and website, see here for details). Add discretionary expenses of about $1500/year transportation (mainly air travel), $500/year dental/medical, $2000/year clothes/gear, $50/day food/shelter/miscellaneous and total is about $24000/year. Infrastructure is thus a very small portion of my budget and most of my expenses are discretionary, which partly explains why I feel like a king living on a budget that is modest by American standards. (Actual living expenses about $18000 in 2023, $20000 in 2022, $15000 in 2021, $18000 in 2020, $16000 in 2019, $16000 in 2018. Living expenses does not include income taxes or cash gifts.)
Another factor is that, beyond the basics, spending money tends to reduce rather than increase happiness, or such has been my experience. Not owning an automobile makes me happier than owning one. Owning a single bicycle makes me happier than owning multiple bicycles. Having a single set of sturdy home-made clothes suitable for outdoor use and easily cleaned in the sink, plus spares in the storage locker, makes me happier than would a varied wardrobe of fancy store-bought clothes which can't be worn outdoors and which require machine laundering and/or dry-cleaning. Cheap motels are usually better for me than expensive ones, partly because the clientele at the latter tend to be insecure middle-class types terrified of falling and obsessed with rising in social status, an attitude which is contagious and which is definitely not conducive to my happiness, and partly because too much comfort sucks me into its vortex and makes me want to settle down, but being stationary is also not conducive to my happiness, which is also the reason for not having a fixed residence. Eating at restaurants is typically a nuisance compared to eating in the park with foods from the grocery store. And so on.
Above budget could be cut in half, to $12000/year, by trading time and discomfort for reduced transportation costs (long layovers, long bus trips), confining foreign travel to cheap countries in Latin America and eastern Europe instead of western Europe, being careful to stay in cheap motels while in the United States, and otherwise pinching pennies. In theory, discretionary expenses for a long-term traveler could be cut still further, bringing total to about $6000/year, by living like the locals when traveling in cheap countries, and living like a homeless person while traveling in the United States (mostly wild camping rather than staying in motels), but not many are willing to live like that.
Medical insurance is a major infrastructure expense for most people. I haven't had medical insurance since 1995, when I quit my corporate job at age 35. Aside from reducing infrastructure expenses, lack of medical insurance encourages me to take care of my health and limit my risk-taking, which is desirable in itself, apart from money considerations. That is, there are times when neither the possibility of pain nor even that of being permanently crippled is sufficient to keep me from doing something rash that might result in severe body injury, whereas the prospect of paying huge medical bills might. Similarly, lack of dental insurance encourages me to brush and floss my teeth each night. Cost of medical insurance for someone age 35-65 in the United States in 2024 would be about $6000/year, with annual deductible of $6000. $6000/year saved amounts to $180,000 over 30 years, not counting investment gains. That should be more than sufficient to pay for any healthcare expenses I am likely to have beyond the $6000 annual deductible.
Modern medicine does well fixing straightforward problems of an acute surgical nature: broken bones; lacerations; appendicitis; plastic surgery for cleft lips; removal of basal carcinomas; etc. But it is not so good when the problem is chronic and systemic: metastatic cancer; strokes and heart attacks due to long-term degradation of the circulatory system due to poor diet; worn cartilage and torn ligaments due to abuse of the joints; systemic infections that are resistant to antibiotics; etc. Many of these chronic and systemic problems can be avoided by good health habits, which has nothing to do with medical insurance. Indeed, if money is tight, far better to spend it buying decent food and otherwise preventing illness, than on curing illness with medical care, to speak nothing of buying medical insurance, which provides neither prevention nor cure but merely a roundabout way of paying for the cure (assuming a cure is even possible).
Even for problems where modern medicine can do something, it is often best to let the body heal itself rather than run the risk of an incompetent doctor making the problem worse or of contracting a hospital infection. For example, most minor lacerations will heal themselves, especially if you give the body plenty of bed rest. The pain of a kidney stone is indeed intense (I'm speaking from experience), but most stones pass naturally in a few days. Intervening to speed the process up can cause other problems. Best to wait a week or so before visiting the doctor. This is what I did, and the stone was gone before the week was up. Saved myself money, saved myself a bunch of hassle waiting around in the doctor's office and filling out forms, and ended up healthy again once the ordeal was over.
Some will say my perspective is skewed due to my good health, which is a matter of good luck. My response is that the role played by luck is over-estimated where health is concerned (and under-estimated where wealth is concerned). Those who want to be healthy generally are healthy. And those who want to be sick (and many do, for complex psychological reasons) generally do become sick.
Automobiles are another major infrastructure expense that can easily be eliminated for those who are retired and traveling much of the year, and sometimes even for those who are still working. For example, I gave up my car in 1990 while living and working in Washington, DC and also lived without a car for many years in San Francisco, while working from home, before moving to Reno, Nevada when I retired. For the most part, I've been transporting myself since 1990 the old-fashioned way—by foot—though I also used mass transit frequently in Washington and recently I've been using my bicycle in Reno. There are websites which rate cities by "walkability", but the ratings are frequently misleading, in my experience. For example, Reno is poorly rated for walkability and yet I find it very walkable.
Housing is a major infrastructure expense for most people. For renters with a lease and for homeowners, housing expense is mostly infrastructure, since it can't be postponed or reduced easily. For travelers with the options of expensive motel, cheap motel, camping in organized campground, or wild camping for free, housing expense is mostly discretionary, since wild camping makes it possible to reduce the expense arbitrarily low.
To perform a full analysis of housing costs, we must first discuss the concept of "safe withdrawal rate" or SWR. It is difficult to consistently earn high real (after tax and inflation) rates of return on passive investments, such as stocks, bonds and real-estate that is managed by someone else. Furthermore, even to get modest real returns, it has historically been necessary to accept either significant volatility (as with stocks and long-term bonds) or illiquidity (as with real-estate). Volatility or illiquidity, combined with the modest average real returns the average investor can reasonably expect to achieve, means that even spending just 4% of starting capital per year will eventually deplete the capital. However, provided the volatility/illiquidity is not too extreme and we only need the spending to last 30 or so years, then 4% is a safe withdrawal rate. That is, a person who retires about age 60, and invests in a mixed stock/bond portfolio, can spend 4% of initial capital per year, adjusted each year for inflation, without too much risk of running out of money before reaching age 90, which is a realistic estimate for average life expectancy in the developed world at age 60. There is much more that can be said on this subject, but the 4% bottom line is what matters. That 4% figure is a real wake-up call for the average small saver or retiree, who typically has delusionary notions of being able to spend 10% or more of initial capital per year. Indeed, even the 4% figure may be optimistic as of 2023, as it is possible that we are entering a long period of low real returns on capital.
Anyway, suppose a person travels 9 months per year and spends the remaining 3 months (13 weeks) in a fixed location. What is the best option for housing while not traveling? Assume we have $200,000 starting capital for housing. (Note that the SWR accounts for inflation, so no further adjustments are needed in the calculations below.)
For both houses and RV's, preparing plumbing for sub-freezing conditions is quite a nuisance. If RV has to be driven to a storage location, that is a further nuisance. There is no preparation needed with an apartment, other than notifying landlord. Preparation with motel consists in carrying a few boxes of belongings to storage locker, which takes a few hours if storage locker is not too far away.
With house or apartment, there is possibility of a fire or burglary or other catastrophe that might require tour to be interrupted. Problems like this are unlikely with well-run storage facilities made of steel and concrete, which have been designed with round-the-clock security in mind. There is the possibility of spontaneous combustion of items stored in a neighboring storage locker, which could cause smoke and smell contamination. So clothes and electronics should be protected by plastic containers inside storage locker.
RV's are discussed because there is frequent mention of RV boondocking as the ultimate low-cost housing option. And indeed RV's might work out well for those whose preferred mode of travel is via RV, and who migrate south in the winter and hence never have to prepare plumbing for sub-freezing storage conditions. But there doesn't seem to be much cost advantage for those, like me, whose preferred mode of travel is via foot or bicycle. If housing cost is an issue, it seems simpler to just travel and camp more and thus spend less time living in a fixed location in motels. RV's as housing are vastly more trouble than motels, and so only make sense for someone who actually wants to travel by RV, as opposed to using it as a housing option when not traveling.
Simplest and least troublesome solution is thus also very economical. Namely, just live in motel when not traveling. This fits in with general trend nowadays towards "sharing economy"—think of AirBnb or Uber. From owner's perspective, don't let valuable resources, such as housing units and automobiles, sit idle, but rather rent out these resources on short-term basis when not using them. From renter's point of view, rather than buying excess capacity just because everything is cheaper in bulk, rent only what you need when you need it.
Obviously, as amount of time spent spent in fixed location increases, balance of advantages tips towards apartment that is simply left vacant while traveling, rather than motel. Issue of fires, burglaries and other catastrophes can be dealt with by maintaining storage locker in addition to apartment, and keeping number of possessions in apartment to minimum while traveling. Then again, some of us would pay extra to live in a motel versus an apartment, simply because we feel more at home in motels.
Owning a house usually provides highest standard of living for given monthly cost, assuming initial choice of house is a good one (no unpleasant surprises with respect to repairs or neighbors) and owner has personality such that basic house management (including preparing plumbing for sub-freezing conditions before leaving on tour, and possibly interrupting tour in event of fire, burglary, tree falling on house or other catastrophe) is not seen as burdensome chore. (Maintaining house is especially difficult for elderly people.) For those concerned about leaving an inheritance to their children, house option has further advantage that only financial capital subject to 4% SWR will be gone after 30 or so years, whereas house itself should still be around and worth more than what we paid for it, assuming it was properly maintained, since houses tend to keep up with inflation unless neighborhood becomes blighted.
Condominiums and coops, or apartment building units that are owned rather than rented, are something of a compromise between owning detached house and renting apartment, and sometimes make sense. Though be careful about board of directors elected by unit owners. An harmonious group is normally far stronger and more effective than would be suggested by simply summing the individuals who compose the group, since individuals can complement one another. Weaknesses in one individual can be offset by strengths in another, and vice-versa. Group members can stagger their traveling, so that group as a whole is never entirely absent. Illnesses will also normally be staggered, assuming group is careful to quarantine those who are sick with contagious diseases. As individuals age and die off, group can be replenished by new and younger members, so that group as a whole is never old and feeble. Belonging to a group can thus be a great advantage to the individual, PROVIDED the individual blends into the group harmoniously and behavior of the group assists in satisfying the individual's desires, as opposed to frustrating the same. Woe be to the individual when there is conflict between individual and group, since the group's strength and effectiveness now becomes a double-edged sword that turns against the individual. In other words, membership in the "right group for you" is typically a blessing, whereas membership in the wrong group is typically a disaster.
Changing 4% SWR number to 3%, to account for low-return environment, tends to enhance attractiveness of owning versus renting. Then again, if market is efficient, prices for housing might rise by exactly enough to leave rent versus buy analysis unchanged. One thing is certain: changing from 4% to 3% SWR reduces cash inflows from given amount of starting capital, and thus makes it more important than ever to minimize ongoing non-discretionary cash outflows (infrastructure expenses). That is, it becomes more important than ever not to get locked into high ongoing expenses, regardless of housing option chosen.
Preceding section is negative towards owning a house, but doesn't give the full story, since it assumes a fairly well-funded traveler, such as those with a good pension or social security benefit, or those with substantial wealth in the form of financial assets. For those with a small pension or no pension at all, and with moderate or small wealth, there is another way of looking at things.
Currently, and likely in the future as well, the tax and government welfare systems of the United States favor those who are rich in income-producing tangible assets (real-estate, motor vehicles, tools, machinery) but poor in financial assets (bank accounts, stocks, bonds) and cash income. The underlying reason is because these "yeoman" types tend to identify with the plutocrats who run the show. In exchange for supporting the plutocrats, the plutocrats have created a system that favors yeoman types over commoners who are cash-rich but poor in income-producing tangible assets—the salaried wage slaves aka proletariat. Britain has a similar culture, because unlike the other European countries and Japan, Britain never had a revolution or lost a major war or otherwise went through a social upheaval in which the hereditary landed aristocracy was fully stripped of its ancestral privileges in favor of the industrialist bourgeoisie. I'm not sure about Canada, Australia and New Zealand, but I would imagine they all resemble the United States with regards to favoring yeoman types over salaried wage slaves. That is, all these countries likely have low property taxes and special privileges for owner-occupied real-estate and activities which tend towards self-sufficiency, but high taxes on cash income and commerce.
Let's cut to some specifics. Eligibility for earned income tax credit, food stamps, supplemental social security, medicaid and other government welfare programs is normally based strictly on cash income and financial assets, with one unit of owner-occupied housing, plus the land on which that owner-occupied housing sits (up to some limited number of acres), plus one motor vehicle, excluded from consideration. Other tangible assets, like clothing, tools, machinery, livestock, etc may or may not be excluded from consideration according to law. However, in practice the government is typically incapable of appraising the value of small quantities of used tangible assets other than motor vehicles, even assuming the government is aware of their existence. Because of the interaction between the income tax system and eligibility for welfare programs, the effective tax rate on low-income people is often extremely high, like over 100%. That is, situations frequently occur where a person is worse off financially if their cash income increases, due to losing eligibility for all sorts of welfare programs.
For a person with limited wealth and limited or no pension, who wants to travel much of the year, the best advice is to put all wealth into income-producing tangible assets, and to especially favor income that is imputed rather than in cash form and thus taxable. For example, owner-occupied real-estate produces imputed rent income, which is the value of the housing services received by the owner-occupant, in excess of expenses (taxes, insurance, utilities, maintenance and repairs). The savings are two-fold with imputed income. First, the owner-occupant is not taxed when he earns the income necessary to obtain cash to pay a landlord, because there is no landlord and hence no such cash is necessary. Second, the owner-occupant is not taxed when he receives the imputed income (the housing services) whereas a landlord would be taxed. For cultural reasons, I think it unlikely that either imputed rent or other forms of imputed income will ever be taxed in the United States. (Imputed rent IS taxed in some countries, such as the Netherlands currently.) In general, the more things you can do for yourself, using tangible assets that you own and thus the greater your imputed income, the less taxable income you need to obtain cash to pay other people. The lower your taxable income, the greater likelihood that you will be eligible for welfare programs.
However, you'll surely need some cash. Try to obtain it by running a small business, where once again the tax structure is set up in your favor, courtesy of the plutocrats who know that small business owners tend to support plutocracy. (Mind you, what the plutocrats give the small businesses with one hand, they take away with the other. Thus politicians who answer to the Walmart heirs are happy to give small businesses a few tax break crumbs, but then give even bigger tax breaks to Walmart and also do nothing to protect small businesses from the brutal competitive pressures of Walmart. Though the tax breaks for small businesses are mostly crumbs, they are better than nothing, which is why I recommend scooping them up if possible.) In particular, renting out rooms in your owner-occupied real-estate is an excellent way to earn money in a way that is tax-favored and won't upset your eligibility for welfare programs if you do it right. Even better, exchange housing services for other services via non-cash transactions. For example, allow roommates to live rent-free or with reduced rent in your house in exchange for maintaining the house while you are traveling and providing you with garden-grown vegetables when you are not traveling. Using your motor vehicle (a truck preferably) as part of a small business is another smart move. In general, share tangible assets (real-estate, motor vehicle, tools, machinery) between a small business and your personal life. The cash income these tangible assets throw off as part of the small business can be offset by business expenses. The imputed income these tangible assets throw off when used in your personal life is tax-free to begin with, because it is imputed rather than real. Skate close to the edge of the law, but be careful about going over the edge. The Internal Revenue Service is well aware that many small businesses are in violation of the law, and audits them heavily.
Motel and apartment options that work best for me are bad choices for people of limited means, because these options require a substantial cash income, and, as noted, substantial cash incomes are often subject to extremely high marginal tax rates for people of limited means. There is no circumstance in which my own income would be low enough to make me eligible for welfare programs, thus there is no good reason for me to limit my income. Rather, my efforts are best directed towards limiting my cash expenditures.
Conventional advice is 60/40 stock/bond allocation and then withdraw 4% of original value of savings each year, adjusted for inflation. 4% is called Safe Withdrawal Rate (SWR) because 100% chance of success, based on historical backtests (assuming USA stocks/bonds), where success defined as not depleting savings within 30 years, which is realistic upper limit of remaining life expectancy for someone who retires at age 60. Of course, past results do not guarantee future performance, so just because 4% SWR mostly worked in the past doesn't mean it will mostly work in the future.
Several problems with 4% SWR strategy but main one is psychological, in my opinion. Assuming withdrawals are actually necessary to support minimum comfortable standard of living, versus supplementing government pension which pays for necessities while withdrawals from savings pay for luxuries, retiree is likely to feel extreme psychological distress as savings drop towards zero late in life. Based on year of retirement, most historical backtests using 4% SWR actually showed no depletion but rather growth of wealth over time, and often considerable growth. That is, in most backtests, 4% SWR was too conservative and 5-7% would have worked. And even higher SWR would work if remaining life expectancy were known to be less than 30 years. Only about 10% of backtests dwindled towards zero, but that 10% is nevertheless cause for concern. Also, 4% SWR failed in many backtests if remaining life expectancy more than 30 years.
Simplest fix for potential shortfall with 4% SWR is to vary withdrawal based on investment performance, especially in first few years after retirement. That is, if investments plunge in value soon after retiring, withdraw less than was originally planned. Various formulas have been proposed for how exactly to vary withdrawals.
My proposal is to split savings into two buckets. First bucket used to create reliable base income. Multiply expected government pension (Social Security in USA) by number of years between age at retirement and age pension begins and put that amount into short-term government bonds. Remaining savings into mix of nominal bonds and stocks. Only spend interest and dividends from second bucket. Over time, allocation of second bucket will naturally tend to become more stock heavy, as real value of bonds is diminished by inflation and real value of stocks increases (because some portion of corporate profits are reinvested for growth rather than paid out as dividends).
Rule of only spending interest/dividends from second bucket is probably too conservative for retirees over age 60 but is more realistic than 4% SWR scheme for early retirees with long life expectancy, such as someone retiring at age 45 whose parents lived into their 90's. Assuming enough savings that there is something in second bucket, then two bucket scheme eliminates psychological issues with wealth depleting towards zero in old age and guarantees there will be inheritance for children.
As of Oct 2023, interest rates on nominal 10 year USA Treasury bonds are about 4.5%, VTI ETF (USA stock market) pays about 1.6% dividends, VXUS ETF (non-USA stocks) pays about 3.1%. Initial mix of 40% bonds, 30% VTI and 30% VXUS would thus pay about 3.3% as of Oct 2023. This is substantially less than 4% SWR. However, income likely to rise over time in real terms, assuming initial allocation is stock heavy, which is desirable for very early retirees, who may be comfortable living frugally while young but who often develop expensive tastes or expensive medical problems as they age.
Depending on number of years to retirement and percentage of savings in base income bucket, above proposal might have withdrawal rate higher than 4%. Example 1: early retire at 60, pension of $20K/year at age 65, put entire $100K of savings into short-term bonds, so withdrawal rate 20%. Example 2: early retire at 50, pension of $30K/year at age 70, put $600K of savings into short-term bonds, remaining $200K savings allocated as described above (40/30/30 paying 3.3% or $7K/year), so total allowed spending of $37K/year, or 4.6% withdrawal rate relative to $800K initial savings. Example 3: savings high relative to expected pension, so can dispense with base income bucket and simply live off interest/dividends from bonds/stocks, so withdrawal rate of 3.3% if allocation described above.
USA stocks expensive relative to bonds as of Oct 2023, with PE of 20 for VTI, which translates to earnings yield of 5%. Subtracting 2% for economic depreciation exceeding accounting depreciation, for things like technology changes causing entire businesses to be suddenly written off as worthless, reduces yield to 3%, or 1% risk premium over long-term inflation-protected bonds (TIPS). More realistic would be PE of 14-16, which gives 2-3% risk premium over long TIPS. This analysis implies USA stocks need to fall about 20-30% to be fairly valued relative to TIPS. Inflation likely to repeatedly push above 2% target, but 2% real interest rates will soon bring it back down, given private sector indebtedness, so long TIPS at 2% or 10 year bonds at 4.5% both low risk. Fall in stock prices unlikely to affect dividend rate, but probably prudent to replace USA stocks with USA bonds as of Oct 2023, then wait until stock prices drop before switching back. Market timing is dubious practice in general for average investors, but not particularly dangerous in this case.
USA stocks also expensive as of Oct 2023 relative to non-USA stocks (PE 20 for VTI versus 12 for VXUS). One explanation might be that USA stocks have been bid up in price by investors worried about another world war. North America is world's great safe haven, an impregnable fortress, and hence USA stocks presumably will survive world war better than non-USA stocks. However, this explanation doesn't account for low interest rates (high prices) on non-USA bonds. Another explanation is that investors are being slow to come to grips with combined changes from era of low inflationary pressure and real interest rates to era of higher inflationary pressure and real interest rates, and from era of USA hegemony to era of multipolarity. High prices of USA stocks and non-USA bonds relative to USA bonds and non-USA stocks should eventually rationalize, as investors incorporate new economic/political situation into their thinking.
Market value of mostly stock portfolio will be volatile, which might cause some investors to panic. Best way to deal with volatility is stop looking at market values. Business opportunity here for investment management companies to create special limited versions of website and smartphone apps which only show market value for money-market fund (where interest/dividends deposited before being transferred to bank account), plus estimate of interest/dividends that account holder can expect per year, plus information necessary to file income tax forms.
Owner-occupied real-estate commonly owned by retirees. If it makes sense to gradually deplete savings over 30 years with 4% SWR, then wouldn't it also make sense to gradually deplete housing equity with 30 year reverse mortgage? Imagine sense of panic as retiree approaches 30 year deadline in good health, so faced with prospect of losing their house, and being forced to move, and having no inheritance to leave their children. But this is very similar to what happens with 4% 30 year SWR scheme. Whereas living on interest/dividends resembles living until death in house that is owned free and clear. Real estate equivalent of interest/dividends is imputed rent, meaning what house would rent for on open market less expenses normally paid by landlord (property tax, insurance, repairs and depreciation allowance, some utilities).
As of 2023, some foreign countries with dual tax treaties with USA do not recognize Roth retirement account withdrawals as tax free. Since 1099-R is filed by custodian with IRS for such withdrawals, in theory IRS might pass this information on to foreign countries in which retiree is tax resident,though not clear if such information sharing currently happens in practice.
Taxation of Roth withdrawals amounts to double taxation of some portion of withdrawals, because Roth contributions are after tax. Some expat retirees have gone so far as to change plans about where to retire simply to avoid taxation of Roth withdrawals. Another possibility is the following: after depleting taxable and IRA accounts, temporarily re-establish tax residency in USA, withdraw 10 years of living expenses from Roth to taxable account, re-establish tax residency in foreign country, repeat every 10 years. Nuisance, but better than changing retirement destination simply to avoid Roth taxation.
Roth is important because of possibility of future high inflation. USA has experienced double digit inflation many years since 1914, and might easily experience decades of double digit inflation in the future to work off current debt overhang. Also, USA income tax rates in the past were often much higher than currently and might again be higher in the future. Combination of decades of high inflation and high income tax rates would be devastating for wealth held in taxable or ordinary IRA accounts. Getting as much wealth into Roth as possible is best way to avoid taxation of illusory capital gains and interest/dividend income caused by inflation.
As of 2023, France recognizes Roth withdrawals as non-taxable because of how USA-France dual tax treaty was written. Some USA legislators are trying to get other dual tax treaties updated to recognize Roth accounts as non-taxable, so issue of foreign countries taxing Roth withdrawals might eventually disappear.