I currently contribute 12% to a traditional 401k. Employer matches 4%.
I have a pay increase on the horizon and may use this as an opportunity to revise my contributions mixed between traditional and roth.
Any suggestions on how to balance a 12% contribution between the two? I’m in my early/mid 30s. Thinking of going 8% traditional and 4% roth or 10% traditional and 2% roth.
Thanks for any ideas.
401k Advice: Traditional vs Roth Allocations
byu/Micksar ininvesting
Posted by Micksar
3 Comments
Unless your significantly saving in taxes, i would prioritize the roth over the traditional.
I would prioritize Roth for near term. I heard some rumors that Roth conversions might soon become harder to do in order to help lower the national debt.
It depends on your income and tax strategy, not arbitrary percentage.
The only way for you to understand the difference in tax savings is to understand how income taxes work and how you want to retire.