Traditional 401k vs. ROTH 401k

[BearBoy0222]

Hello All!

Just created a profile after being a reader for a while. Looking for some advice on if I need to be contributing to a Traditional 401k or a ROTH 401k, at this point in my life. Here are some more details about me for insight:

I am 26 years old and have a full time job making around ~$73k a year (including bonuses).  Last year I bought a house and put 20% down (I plan to keep as a rental property in the future). Below is a summary of my investment accounts as of today 1/13/2018:

Traditional 401k: ~$74k
ROTH IRA: ~$14k
Personal Investing Account: ~$5.5k

I try to contribute the maximum allowed in my 401k each year and switching to a ROTH 401k would make that more difficult.

Now that my employer started offering the ROTH 401k option this year, what are your guys thoughts on where I should be putting the money?

[MDM]

I am 26 years old and have a full time job making around ~$73k a year (including bonuses).
...
Now that my employer started offering the ROTH 401k option this year, what are your guys thoughts on where I should be putting the money?

BearBoy0222, welcome to the forum.

With the information given, you would save 22% using a traditional 401k.

It requires a traditional account balance of ~$1.3 million to reach the 22% bracket using 4% withdrawals from the traditional balance alone.

Until you expect to have that much, or additional retirement income that decreases the needed traditional balance to a level you expect to have, contributing to traditional is a reasonable thing to do.

See How To: Write a "Case Study" Topic if there are more details to your situation.