Math question 401k

[SubL stache]

I just got my 401k to fully funded this year 18,500 by 12/31.  It is in a mix of traditional and Roth to keep my tax rate at the 22% threshold.

My wife works part time and earns 25,000.  We are only contributing $100 per month Roth to her 401k, it's all we can do at the moment.

I'm about to get a pay raise and am considering my options:

If I flip both of our 401ks to 100% traditional it will move us into the 12% bracket  and I can increase hers to 18,500 taking full advantage of 2 deferred accounts.  Now I know Roth vs traditional doesn't matter if the tax rate is the same on withdrawal (commutive property I believe)

The twist is that my wife wants to stay at home in the next 2-3 years.  Is it better to fully fund her 401k for next 3 years even though we would be in the 12%, or is it still a math wash?  To further complicate things I will be moving into the High paid employee bracket in the next 2 years causing my deferral to be limited based on employee participation...so my instinct is to get as much into these deferred accounts as possible before she doesn't have a 401k and my contributions are limited.  But this may be a fallacy in my thinking and the math may be the same.

Does that make any sense?

[Joel]

Personally, I try to maximize traditional retirement contributions when my marginal federal tax rate exceeds 15%.

[i_have_so_much_to_learn]

I agree with Joel. While she's out of work you can buy her Roth IRAs, as well. To be clear, I'm assuming you have many years until retirement. Age until retirement matters in this type of discussion.

[MustacheAndaHalf]

If either spouse works, both spouses can setup IRAs.  You might check for income limits which are even lower when you have a 401(k) plan available at your work.

I don't follow why she's limited to $1200/year to her 401(k), but you contribute $18,500 per year to your 401(k).  Can you pay for $4,000 of her expenses so she can contribute thousands more to her 401(k)?  This is especially important if she has a 401(k) plan with a company match.  You want to grab all the free company match money that you can.