Author Topic: 401k Roth?  (Read 4085 times)

Baylor3217

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401k Roth?
« on: April 07, 2013, 06:40:12 PM »
My company started this last year.

Anyone doing it?

I already Max out 401k and Roth.

matchewed

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Re: 401k Roth?
« Reply #1 on: April 07, 2013, 06:54:38 PM »
I split personally. My company does a match based on gross pay (9%) no need to contribute to get this, it is automatic. I contribute a total of 13%, 10 into standard 401k and 3 into Roth 401k. With my Roth IRA on the side I think I have enough after tax accounts going.

James

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Re: 401k Roth?
« Reply #2 on: April 07, 2013, 06:59:57 PM »
I put most of my money into my regular 401k, but I still put a couple percent into the Roth 401k to give me more options at retirement in avoiding higher tax brackets.  The contributions to the Roth 401k counts against your overall 401k limit, the only difference is that the Roth 401k money is after tax and comes out tax free, but you probably already know that.  It's just nice to have money in both buckets during retirement, but you also have to weigh the current tax implications and just make an informed decision.

matchewed

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Re: 401k Roth?
« Reply #3 on: April 07, 2013, 07:13:03 PM »
Off topic but I gotta say I like your quote/signature James.

James

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Re: 401k Roth?
« Reply #4 on: April 07, 2013, 07:19:28 PM »
Off topic but I gotta say I like your quote/signature James.


Thanks.  :)

sherr

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Re: 401k Roth?
« Reply #5 on: April 08, 2013, 08:32:21 AM »
My company offers one. I used to contribute to it 50/50 with the Traditional 401k, then I realized I was likely wasting a lot of money in taxes (I'm in a 25% bracket). Now I contribute solely to the Traditional 401k.

I think it's kind of silly to hedge your bets (like I was doing) against the possibility of future tax rate increases if you plan on having a fairly mustachian retirement. If tax rates do go up (likely IMHO) it will probably not be on the poorest members of society. Who would vote for that? Democrats? Nope. Republicans? Nope. So if you plan on retiring in the 10 or 15% brackets you will likely not be subjected to many extra taxes.

I contribute to a Roth IRA only because I cannot deduct contributions to a Traditional IRA, which makes it fairly worthless. Otherwise I'd be whole-hog Traditional, and I would recommend that for anyone in a 25% or higher tax bracket.

JohnGalt

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Re: 401k Roth?
« Reply #6 on: April 08, 2013, 08:56:34 AM »
My current tax rate is so much higher than my expected withdrawal tax rate that I can't justify the roth contributions - though the flexibility would be nice.

Zaga

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Re: 401k Roth?
« Reply #7 on: April 08, 2013, 10:45:23 AM »
Same as everyone else, in the 25% tax bracket I just can't mathematically justify missing out on that deduction now.  We do put some into Roth IRA's, so we are tax diversifying a bit there.

Debbie M

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Re: 401k Roth?
« Reply #8 on: April 09, 2013, 05:16:03 PM »
I'm in the 15% bracket and have a pension that will be taxable.  So all my other retirement stuff is in Roth vehicles.  I'm unlikely to drop down into the 10% bracket, and tax rates at each level seem much more likely to go up than down.