Saving 22% for you seems a clear indication to use traditional. Saving 12% is less clear. You might go through the Investment Order post and do your own back-of-the-envelope projections of your withdrawal tax rates.
After doing withdrawal rate calculations, I ended up at
10%. This would lean towards using traditional as my retirement tax rate would be lower
BUT….I feel some things in my calculation/assumptions are off and would really like to double check here. from the investment order list, I am applying only steps 2 & 3 as no guaranteed income & not so sure on SS.
Newb Calculations:
Assuming I don’t contribute 6k to traditional IRA and instead Roth IRA
Step 2:)
FV of current Pre-tax 401k Balance: $33,897
17 year work period
3% return rate
19k yearly contribution (401k limit)
PMT made at end:
FV:$469,645.50 x .04 annual withdraw = $18,785 ordinary income
Step 3:)
FV of current Taxable Account Balance: $42,110
17 year work period
3% return rate
15k yearly contribution
PMT made at end:
FV:$396,025.23 x .02 qualified dividends = $7,920 qualified dividends <—tax free under 2018 changes where taxable income under $38,600 single & $77,200 MFJ = tax free. My taxable income seems to be whats above —$18,785
$18,779 - 12,000 standard deduction = $6,770 taxable income —> 10% withdrawal rate?
Not sure why but feels like I could be missing something here…