So I can put $18k of my own money in there, which can be allocated in any % between pre-tax and post-tax. If I put $18k pre-tax, then I'll get dinged later. If I want to put in $10,724.43 pre-tax and $7,275.57 post-tax, then the $10,724.43 will get dinged later and the $7,275.57 is safe.
That means that, when I retire, let's say $1M is in there, $700 normal and $300 Roth. That means it's considered just one giant $1M account, but I get taxed on 70% of whatever I take out? Let's say I'm in the 20% tax bracket, and I want to get $25k a year cash, I would need to withdraw $29,069.76, which would lower the balance to $970,930.24, and then I would need to earn at least 2.994% interest that year to grow back to the $1M.
The reason I am putting some into the Roth is I have no idea where I will be in 34 years. I can't even plan out my weekend plans for Halloween. I have not seen any valuable tools to help with this. See previous paragraph: I have no idea if my split should be 900 / 100, 700 / 300, 1000 / 0, etc.
It seems like I'm trying to hedge against something I don't know. Paying all the taxes now is my option premium. I can either lose big and drop in the tax bracket at retirement and I paid extra taxes now than I could have then. Or I could win big and taxes go to 70% and I already paid mine. And because a stock has a 50/50 shot to either go up or down, I arrived at a 50/50 split between pre and post tax contributions.
Could be 100% completely wrong like most of what I post about on this site, though