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As title, which is better if I’m working in a state income tax free state? Can you please explain in the comments?
Why not both?
Currently thinking to do 50% each
Whats your tc
Max limit is 69k. However you put it.
This is only if they have access to an after tax 401k (mega backdoor Roth). Idk about Nvidia but it’s not a given that every employer offers the after tax 401k. 23k is the limit for directly to a pretax or a Roth 401k.
If employer doesn’t support backdoor how to get 69k?
Roth if you think taxes will increase and you’ll cash out more than your tc, pretax otherwise
When you retire, do you expect your income to be higher than what you earn now? Will it be 0 since you stop working? Or will you have some passive income? Questions to ask yourself
You can pull money out of pre tax before 59, Roth cannot
Ehhh. Wrong answer In fact you can pull out your contributions tax and penalty free for roth after 5 years. Gains are taxed and penalized same for both
If you’re in the highest / second highest tax bracket do pretax 401k. Else do Roth
It depends on your federal tax bracket now and effective tax rate in retirement.
It kind of depends on you and your plans. Do you intend to retire early, and if so would you continue living where you are, or a state with income taxes? If you plan to retire where you are, you might have some Roth conversion opportunities where you might pay very minimal taxes on that money you converted from pre-tax to Roth. Pretty tough to give an opinion with the limited info. Also what’s your current income/tax bracket? Lots of unknowns here. The answer here isn’t exactly a one size fits all. Depends on your situation and your goals.