For all my previous jobs I've used the regular 401k. New employer has an option to invest in 401k Roth. I understand the difference of pre vs post tax. Also I generally do the the traditional to Roth conversion ($6k per year using backdoor). Can I continue to do this if I go with 401k Which one should I sign up for? EDIT: Here's my understanding of the different vehicles: 1. Regular 401K - Everyone knows and loves this 2. Roth 401K - Similar to 401K except that its funded from after tax money. Withdrawals are not taxed after retirement 3. Traditional IRA - Invest in IRA with after tax money no income restrictions 4. Roth IRA - You can only invest if you earn < $x. So those who are not eligible do a rollover from Traditional to Roth aka Backdoor roth
They are [REDACTED]
I am confused by your post. Please see my edit.
Sorry bro, deleting so I donât confuse anyone else
âRoth 401k does not existâ is a lie and you should never trust strangers in the internet (unless they provide a link to Wikipedia).
https://www.investopedia.com/terms/r/roth401k.asp your wrong
You are definitely wrong. Do I need to show you my Roth 401k balance?
I put the 30k in normal 401k with the target fund and I put 6k from my checking account into Roth IRA to invest in stocks I want
How do you put 30K when the limit is mandated by IRS? 2020 limit is 19.5K
The match
Roth. Always roth. Taxes are only going up.
If you have mega backdoor, you save extra $37500
Max total $57000
Employer needs to have this option right? We can't do it ourselves
Roth 401k will grow tax free. This is the better option.
Aglee
It depends on your tax bracket now. There are break even calculators. Generally I think it makes sense to do Roth when younger and in lower tax bracket and longer time to grow tax free and then shift to regular 401K as income and tax advantages pay off. Also - if you can I do regular 401K then all after tax put into megabackdoor Roth for $50k+ yearly savings which I think gives you best of both worlds however Roth 401K + megabackdoor may also be a reasonable approach
It largely depends on your current tax bracket. If its low then roth, if its high regular. But generally do Roth
I think the vast majority of techie blinders should go pre-tax. You are at or nearly at the highest marginal rates. Do you really expect your retirement income to match your 250k plus TC?
No... but taxes are very low right now and likely will only go up.
Here's the thing though. You're going to build your portfolio to say $3M upon retirement, which is highly doable working in tech. Then say you decide to live off 4% SWR, which comes to about $120k/year. Sure, thats less than your current salary, but you're still in the same tax bracket pretty much
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You can do both
19.5k in each?!
IRAs are capped at $6k/yr and cap goes up ~500 every 5-10 years.