Traditional 401k or Roth 401k

BGIS
cocaina

Go to company page BGIS

cocaina
Mar 23 14 Comments

Which would be best if your employer does not match? I make 🥜 now but plan to make much more in the future. I’m thinking 100% into Roth IRA would be better so I can pay taxes on those investments now and not in the future when I make more. #personalfinance #investments

YoE: TC 115k

14

comments

Want to comment? LOG IN or SIGN UP
  1. TOP
  2. RECENT
  3. OLD
 TOP 14 Comments
  • Roth 401k if you think you’ll be withdrawing more money from it than you are making now (i.e. >$115k inflation-adjusted) or have a strong conviction that taxes are going to go up then. Otherwise traditional.

    I think most tech workers make more than they will withdraw so they max traditional 401ks and even after do backdoor Roths. Your case could go either way tbh. I don’t think either is right or wrong.
    Mar 23 1
  • accesso / Eng
    ff40

    Go to company page accesso Eng

     ff40
    I use a Roth 401k. Historically fed income tax is near an all time low. Considering the US is spending more money than ever I don’t see a future where fed income tax would be lower than today. They can really only go up from here. Therefore Im betting that taxes will be lowest now rather than later and that paying taxes now will have the best pay off. If we see taxes rise substantially I would switch to a traditional 401k.
    Mar 23 0
  • Twilio
    naoBeiw6

    Go to company page Twilio

    naoBeiw6
    Since you say you don’t make much now it’s probably better to do a traditional 401k since that’s pre-tax money. And then switch to Roth 401k when you make more
    Mar 23 3
  • Roth let’s you effectively put in more money
    Mar 23 4
    • Tridiuum
      kwlbb123

      Tridiuum

      kwlbb123
      how could i be so stupid? yes you are right! the 20k i put into the roth was tax free to begin with! i will put in a prayer for your hedge fund
      Mar 23
    • https://thefinancebuff.com/roth-401k-for-people-who-contribute-max.html

      “A few comments to that post said Roth is better because a Roth 401k lets you effectively shelter more from taxes than a Traditional 401k. That’s true. My response was that the higher effective maximum comes into play only if someone actually contributes the maximum allowed, currently at $17,500 per person per year.”
      Mar 23