Recently my wife decided to leave her full time job to pursue her career in coaching more agressively. As such, her previous income of ~$40k per year will no longer apply, and we will rely solely on my income, with some income coming in from coaching (approx $1K per month). We have no kids yet and no debt beyond our mortgage, so we have the ability to max out retirement contributions for our IRAs and my TSP, with the remainder of our extra income going to taxable accounts. Previously she would contribute to her 401k, I would contribute to Roth TSP and Roth IRA, but with a change in income, I'm wondering if it would be more beneficial to switch to Traditional vs Roth contributions to reduce our taxable income (or some combination thereof).
Projected, our taxable income would look something like this (based on 2014 W2 info, filing jointly):
Military Officer O-3 - $64983.60
Contractor (Coach) - $12000 (estimated)
Subtotal: $76983.60
Retirement Contributions: $29000
Total before Itemized or Standard Deduction: 47983.60
Generally it always made sense to contribute to Roth anything if you are in the Military, since a majority of income isn't taxed, and most people fall in lower tax brackets to begin with, so contributing to traditional retirement accounts didn't make sense. However, contributing to traditional accounts would keep us in the 15% bracket vs 25% bracket in case her salary increases over the year. I've tried to do a bit of research, but I think I am on information overload. I know this has been addressed in the forum in other cases, and probably other blogs as well, but any advice from other mustachians out there would be greatly appreciated. I've tried fostering this conversation at work, but I get nothing but I get blank stares when I talk about maxing contributions out every month. Thanks!