Yes, usual recommended approach is to max traditional 401k with Roth on the IRA side.Ya know what, Aristotle, I just did the math and you were completely correct. I would earn roughly 17% more by not paying taxes now according to the investment-return parameters I just tried out. Does this mean that I should stop making my employee contributions as Roth as well?
Thanks Aristotle for the reply. My reasoning is that I'm already maxing out my Solo 401k contributions (~23k Roth on employee side, and then 25% of profit on the pre-tax employer side), so I don't think converting that pre-tax portion to Roth will mean that there is less money in the account to start growing. I suppose the amount that I pay in taxes up front could just instead go into my brokerage account and that would mean I would have more money growing. I suppose I should graph out which would be better long-term, higher principal w/ a tax-hit or lower principal w/o taxes. I am anticipating working until pretty close to death rather than having a long retirement, and I am also anticipating that tax rates will go up; these two points suggest to me that my marginal tax rate might not be much higher now vs late in life.
Statistics: Posted by aristotelian — Wed Nov 27, 2024 7:31 am — Replies 11 — Views 467