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As a Mustachian, I've been nodding and following along with the principles of MMM. I've also delved into MadFientist's content which has been really helpful. I haven't heard (or perhaps missed) much mention of ROTH 401k's in either's content though. From what I understand you can have EITHER a traditional 401k OR a ROTH 401k.
For the first time since I have started investing, I will max out my normal 401k this year. I'll max it out over the next 4-5 years and end up with a balance between $120-$150k (30-35% of my FI nest egg).I then plan on maxing my HSA each year as well, then funneling the rest into a taxable brokerage account. Based on the content I've read, early retiree's typically have a lower tax rate (and lower income) in retirement than they do during their career. Because of this, I've always assumed the plan would be to stick to the regular 401k and when I hit my number to begin the ROTH conversion ladder while living off my taxable brokerage account.
My company happens to offer both, and recently I spoke with a colleague who is very passionate about his ROTH 401k. He is not planning on retiring early, nor does he really have any inkling as to how soon I'll be giving FIRE a shot. Depending on the market, I'll probably be ready for greener pastures as early as 2022 or as late as 2024. I feel like I have pretty well accounted for most hurdles.
Questions:
Am I missing anything when it comes to the advantages of a ROTH 401k over my normal 401k? My position is that my regular 401k is better.
Would a ROTH 401k destroy the chance of a 'conversion ladder' method?
Even in my colleague's case