My employer switched our 401K plans this year and is now offering both a regular 401K and Roth 401K. I'm just really getting into investing for the 1st time since I paid off all my debts and fully funded my EF.
I make about $95,000/year which is variable. I work a job where I get a base salary plus commissions. I expect to have some years where I make more and some years where I make less. Which is why I want to invest as much as I can in the years I make more. My tax bracket may also vary a bit because of this.
I plan to fully fund a roth IRA which I just set up and started adding to.
I also have a regular IRA with about $12,000 in it but am not contributing towards it currently (this is from a previous employer 401K that I rolled over).
I participate in my company's ESPP, right now I'm doing about 7% but plan to increase that to the full 15% in the next round and eventually put this into Roth IRA and some regular Vanguard investments for other things like paying cash for my next car.
I do currently add to a regular Vanguard investment account regularly so I have some investments I could immediately withdraw from if needed in the future (eventual new car and home improvements like new roof, etc...)
My company does not match 401K, currently I do 5% in a regular 401K because that was the only option previously. Now my company has the option for the Roth 401K.
Questions:
Should I be contributing to Roth 401K, Regular 401K or both? I plan to up this to 10% possibly and could do 5% in each unless there's a reason why I should be specifically targeting one of them. I'm really not sure with my variable income which one will be more beneficial.
Should I be contributing more to my regular IRA? Or just leave this one alone? I don't have a ton of great options with my 401K so I'm willing to put more money here vs. my 401K if I have to choose.
Thanks!