Yes, MDM is correct. That is the thread I was remembering when replying to yours.
As far as your specific situation is concerned, I'll outlay 2 options:
OPTION 1: Everything into 401k
I am assuming a fluid amount of 11,000$ to go into savings-
$11,000 avoiding 15% tax = +$1650.00
Match up to 4% dollar for dollar (assuming 40,000$ as 25% tax in 2017 starts at 80k and this is your wife's fund) = $1600.00 FREE MONEY
Drain of 1.51% per year = Drain of $166.10 in year 1, $332.20 in year 2, etc
Total
Gains Option 1 for (5) years: +$13,756.50
OPTION 2: Max 401k to the 4% match, then tIRA the rest (assuming you can keep the saver's credit...)
$11,000 avoiding 15% tax = +$1650.00 (assuming the tIRA deductions will remain total-income deductible)
Match up to 4% dollar for dollar (assuming 40,000$ as 25% tax in 2017 starts at 80k and this is your wife's fund) = $1600.00 FREE MONEY
This leaves 1600$ in the 401k to be subjected to the
pillaging increased fees and $9400.00 into you AND your wife's tIRA buckets. Also note, you can deposit into 2017's buckets until 4/17/2018, or whenever you file your taxes, whichever is earlier. Maybe something to look at.
$1600 drain of 1.51% per year = 24.16 in year 1, 48.32 in 2, etc
$9400 drain of 0.04% per year = 3.76 in year 1, 7.52 in 2 etc (HENCE THE POWER OF LOW FEES!!!)
Total
Gains Option 2 for (5) years: +$15,831.20
For a difference of
$2074.70 for Option 2 across five years.
*Yes I know compounding doesn't actually work that way, but its 98% accurate and keeps the math simple
**Either way, saving money is better than not saving money, so if you doubt you will actually deposit into the tIRA and keep it there, may be worth electing for plan A
*** I have not included investment gains, ONLY tax avoidance / fee avoidance gains in the numbers. The actual gains on investments will skew these numbers to be even further apart.
**** FACEPUNCH!!!! What are you doing with your finances such that you cannot max out BOTH the $18000 401k and the $11000 tIRA for you and your wife, (Not eve counting your opportunity for 401k, which I am guassing you have)! Unless you are in an EXTREMELY High Cost of Living area, at 80k a year you need to be doing everything you can to max out the tax-deferred options. Your future self will thank you. A case study may help if you are willing to do one. Just look here:
https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/ (Edits to clarify....)