Misc.

Roth vs Traditional 401k for people making 200 - 300k

Amazon kudobear
6d

I am planing to start maxing out my 401k this years and wondering if I should go roth or traditional or half and half.

I plan to retire at around 50 years old and based on the trajectory, I will have around 6 million net worth outside my primary residence.

TC: 220k, will probably be quite stable between 200 - 300k in the next few years.

Any input is appreciated.

P.s I don't plan to put in any money in backdoor or mega backdoor Roth plan. I am only willing to contribute 20k to 401k because I can't withdraw them until age 59.5 and I would love to have more other passive income stream built up between the gap of my initial retirement and 59.5.

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  • Oracle / R&DlHEA77
    You are very confused. You probably mean to ask about 401k contributions not IRA contributions. At your income level, you should go 100% traditional in your 401k.
    6d6
    • Infinera nG0!#@
      Why not Roth ?
      6d
    • Amazon kudobear
      OP
      My concern is that with 6mil invested, on avg 7% I could be making 400k after retirement. If I ended up withdraw all the profit. Wouldn't I ended up paying more with traditional 401k
      6d
    • Amazon kudobear
      OP
      Thank you so much. The article is pretty insightful. I guess I will go full traditional 401k then and potentially convert to roth in the future.
      6d
    • Oracle / R&DlHEA77
      You mean full *traditional 401k*, not IRA!

      And yes, this guy's blog is very good.
      6d
    • Infinera nG0!#@
      If your family combined income is already above AMT, why wouldn’t you do Roth 401K?
      6d
  • Google / EngBluths
    If you aren’t doing backdoor, how do you plan to put money in Roth IRA? You make too much money.
    6d3
    • Amazon kudobear
      OP
      Through company's plan? I thought you cannot invest Roth IRA on your own bit you can do it through company's 401k plan.
      6d
    • Workday / Engefficient
      You are talking about mega backdoor? Does amazon 401k plan allow that?
      6d
    • Oracle / R&DlHEA77
      Others on Blind have said that it does not. But that's irrelevant because the OP thinks 401k and IRA are the same, which they are absolutely not.
      6d
  • Microsoft am sjbg
    You are incorrect about not able to withdraw 401(k) there is more than one strategy to tap that money before retirement age
    6d3
  • Amazon kudobear
    OP
    Thanks for the input, changed title and question to 401k instead of IRA.
    6d0
  • Apple / EngcpKz41
    Do Roth 100%. Especially considering you live in a no income tax state right now. Assuming Seattle .
    6d4
    • Amazon kudobear
      OP
      So based on 2019 tax bracket, I will be paying 35% on the fund I put in 401k if I do roth. I am thinking that about putting in traditional 401k for now and convert to Roth later.
      6d
    • Apple / EngcpKz41
      Not a good strategy at all.
      6d
    • Amazon kudobear
      OP
      Could you clarify please? I don't think I would withdraw more than 200k per year after I retire. If so, traditional IRA seems to be a better deal at the moment
      6d
    • Apple / EngcpKz41
      Traditional has minimum distribution requirements.
      6d
  • Roku / Eng
    Mr.Scrooge

    RokuEng

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    Yahoo, Oath
    Mr.Scroogemore
    Yoe?
    6d1

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