welcome to the group.
Roth IRA max is good, but do Traditional 401k, not Roth 401k. Klangfool may come along and say something like until you have millions in your 401k you should do Traditional 401k, not Roth 401k. This is usually for a few reasons. RMDs on smaller 401ks are not that much. You don't have to worry about RMDs impacting tax brackets until/unless you have a million or more in 401k. Also not all of SS is taxable so that helps you stay in a lower bracket. And the standard deduction goes up over time. All of this means you will likely be in a lower tax bracket later than now, so do the tax deferred, not Roth 401k. Also if you do oversave in your 401k in tax deferred, you can always retire early and do Roth conversions when in a lower tax bracket (after retirement, but before claiming SS). So you give yourself some flexibility that way. If you do Roth 401k, you can't undo that later.
Roth IRA max is good, but do Traditional 401k, not Roth 401k. Klangfool may come along and say something like until you have millions in your 401k you should do Traditional 401k, not Roth 401k. This is usually for a few reasons. RMDs on smaller 401ks are not that much. You don't have to worry about RMDs impacting tax brackets until/unless you have a million or more in 401k. Also not all of SS is taxable so that helps you stay in a lower bracket. And the standard deduction goes up over time. All of this means you will likely be in a lower tax bracket later than now, so do the tax deferred, not Roth 401k. Also if you do oversave in your 401k in tax deferred, you can always retire early and do Roth conversions when in a lower tax bracket (after retirement, but before claiming SS). So you give yourself some flexibility that way. If you do Roth 401k, you can't undo that later.
Statistics: Posted by arcticpineapplecorp. — Sun Aug 04, 2024 2:23 pm — Replies 1 — Views 78