Hello everyone! I'm relatively new to Mustachianism (although definitely not new to frugality). The blog has been amazingly helpful from a big picture standpoint, and just recently learned that these forums are great from a minute detail standpoint. This, along with a multitude of other factors, has given me the kick I need to really commit to investing in my future and becoming FI early, and hopefully VERY early.
Without further ado, here is the question: I only make around $25k a year (well below the next tax bracket, 25% at $37k), and I live in a state with no income tax (Nevada). Although the pay is dreadful and I'm working on getting out, the company that I currently work for matches 100% up to 6% and the custodian service (T. Rowe Price) recently began to allow their users to diversify between Roth and traditional contributions into the 401(k), at an allocation of your choice. My current contributions to this plan are 35% of my paycheck going in Roth, and 25% going in traditional. The answer seems quite obvious to me, but I just wanted to double check before I made any long-ish term decisions: I should be contributing 100% Roth due to a mixture of my low income and lack of state income tax, correct?
I chose the 35/25 split somewhat sheepishly, seeing the benefits of Roth contributions, but also seeing many informational sources treat the Roth choice as a wary exception, rather than a confidently superior choice (given, the people who were writing about it, as well as their colleagues, are almost surely well into higher tax brackets than me and would probably benefit more from the tax-advantage of traditional contributions).
Thank you everyone, and sorry for the noob question!
---
Also, bonus question for those who don't mind: I'm currently 22, and while my pay is quite terrible (especially among the Mustached crowd it seems), I plan on getting into a better field in the coming years, and have been blessed enough to be able to save like mad the last couple years. This year I started with about $25k cash in savings (I know... Personal Capital has already yelled at me!), and since wising up to the Mustachian / FIRE / Boglehead mindset, have already capped my current year + prior year Roth IRA contributions at Vanguard ($11k) with my savings. I also plan on maxing my 401(k) contributions this year, or getting very close (my current projection is about $17.7 - $18k estimating only on base pay), by taking home very small paychecks and using my excess cash savings to supplement my living expenses in the mean time. After all is said and done, I will still have about $10k in savings, drifting slowly downwards over the course of the year or more until I eventually reach an equilibrium.
Should I chop off, say, $5-$7k of this and invest it into a taxable Vanguard account for the time being? I still live with my parents, so realistically my emergency fund, although I don't overlook it, would not be a life-or-death factor. I also plan on continuing this for several years, or at least until I can get into a field / job that pays decently (right now moving out would probably mean cutting my savings at least in half. I love living with my family and don't plan on sacrificing my financial advantage for a lower standard of living AND lower savings rate). The only medium to long-term expense / purchase that I am planning for is in-state college starting next semester, of which a decent chunk should be subsidized by my company's tuition reimbursement ($5.3k annual for full-time employees).
I know conventional wisdom is to max 401(k), then max Roth IRA, then dabble in taxable options, but I feel like my situation is a little exceptional, and I don't want to miss out on the early advantage I have available to me despite my mediocre pay. Any ideas on this would be greatly appreciated!
