Roth 401k vs. Normal 401k

Palantir / Eng
yaaaaaa

Go to company page Palantir Eng

 yaaaaaa
Jan 25, 2020 14 Comments

Looking for advice on whether to max a Roth 401k or a normal 401k. No company match, already maxing a backdoor Roth IRA. I live in NYC and my marginal tax rate is ~40%. I understand the tax implications of both, but dont’t know how to figure out which one is best for my situation.

Base: 160k
Bonus: ~23k
Equity: hard to value
YOE: 1

14

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 TOP 14 Comments
  • New / Mgmt
    rpgl35

    New Mgmt

     rpgl35
    I’ve always been told do a Roth if you’re younger than 40 and expect to be in a higher tax bracket when you retire. Pay as you go ends up being cheaper than pay at the end.
    Jan 25, 2020 0
  • I prefer Roth but hopefully USA doesn’t pull a France in the long term future and say actually we need more taxes to save SSN and start trying to dig into peoples Roth earnings when they withdrawal at qualifying age
    Jan 25, 2020 0
  • Walmart
    JazzyWally

    Go to company page Walmart

    JazzyWally
    If you’re in NYC only do Roth if you think you will retire there.
    Jan 25, 2020 0
  • PayPal / Eng
    argb

    Go to company page PayPal Eng

     argb
    It's tricky to figure out which would end up saving you on taxes on the long term, it is beneficial to have both in this case you need to figure out how much to put on each. In my last company that was private with no match I did mostly Roth, and in my last year I did some traditional 401k. It was like a 3:1 distribution Roth: traditional overall.
    I like Roth because the gains are tax free in the future, and you are trading off short term tax benefits over long term.
    Jan 25, 2020 0
  • Yext
    ogCo50

    Go to company page Yext

    ogCo50
    Normal for sure. Save money on taxes now and invest it for more earnings
    Jan 25, 2020 3