Tech IndustryDec 26, 2018
Facebookanonna
IRA for New Grad?
New grad n00b here - do you recommend Traditional or Roth for young people just starting their careers? I will be starting SWE at FB in the summer. From my understanding, the main trade-off is taxes upfront or later - Traditional: defer now since will be taxed less in retirement - Roth: tax-free earnings, uncertainty of tax rate in future I will most likely try to take advantage of Mega backdoor Roth while at FB, don’t know much about it other than allowing more contributions.
Poll
46 Participants
Select only one answer
Do Roth. If you start with traditional it's more complicated to do a backdoor Roth later
Max 401k before worrying about ira
No, take match, then max Ira, then max 401k
Yes, IRA contribution would be after max 401k
If you're single, the 2019 income limit for being allowed to deduct Traditional IRA contributions is like $74k. So you almost certainly won't benefit from Traditional IRA. If your income will be above $122k, you'll also need to do the (regular) backdoor to contribute to a Roth IRA. Unless you meant to ask about 401(k) contributions? For those you can benefit from Traditional 401(k) or Roth 401(k) at any income.
Would it make sense to do a traditional for 2018 before starting full time (I would be under 74k income) then start Roth for 2019? Or just do Roth from the beginning?