A few more questions that popped up:
I can't tell if I'm putting in anywhere near the max anymore. Here is my W2 from last year, where I was partially making $54k for some of the year.
My wages were $56377.73, my 401(k) contributions were $11,854.93, and my Roth 401(k) contributions were $3,681.52.
Is this anywhere near the $18k cap, if you combine them? There is no way I can do both $18k to 401(k) and $5.5k to Roth, not until I'm totally out of debt. And I'm not sure that's even optimal because I'd basically be living like a pauper now in order to have millions in retirement I wouldn't even use.
On that same note, how do I convert my total account balances between pre and post tax? I.e. if I have a $50k balance, but 40k is pre-tax and 10k is post-tax, how much would it be in post tax? What about pre-tax?
Thanks
First, your paystubs should have the amounts you put towards each 401(k) acccount both for that pay period and cumulatively for the year.
So, if your September 30th paystub shows you are contributing $455.99 per pay period to your traditional 401(k), you get paid every two weeks (so have six pay periods remaining), and the total amount contributed that year-to-date is $9,119.80, you can figure out that to hit $14,318.48 ($18K less expected Roth 401(k) for entire year), you need to contribute $866.44 per week going forward.
I think people aren't necessarily saying that you need to max both your 401(k) and your IRA, but that, if you are going to put away retirement savings (whatever amount you feel comfortable contributing), put it ALL in traditional accounts. So, for any 401(k) space you use, make it all traditional 401(k) space. For any IRA space you use, make it all traditional IRA space.
What does your crystal ball say that your marginal tax rate will be in each year of retirement when you would want to use/convert those traditional retirement balances? If you know it will be 15%, you will keep 85% of the money...
Pre-tax: 40,000 + (10,000 / 85%) = 40,000 + 11,765 = 51,765
Post-tax: (40,000 x 85%) + 10,000 = 34,000 + 10,000 = 44,000
But, that only works if you know your marginal tax rate will be 15%. If your marginal rate is different, it changes. For more reading on this, many people recommend
this post by GoCurryCracker.