When you contribute to a traditional 401k, you can deduct the contributions from your income at tax time. For example if you contribute $23000 and your tax rate is 24%, you would lower your federal tax bill by about $5500. You can then do other things with that $5500, like investing in a Backdoor Roth IRA or taxable account.When i started my first job, my dad recommended it for me ( he is deceased now ) as something to do if my company offered it. Part of the problem i have is understanding if a ROTH or traditional 401k is going to be better for me long term. It's not really clear on how to determine this. One suggestion online was to "diversity" instead of gamble and simply have your spouse open up a traditional which is what i did.As someone with close age and comparable salary, i'm curious why you contribute to Roth 401k instead of traditional.can you clarify what you mean by this?I would think the tax savings from a traditional 401k would help?
When you withdraw that money in retirement, you will pay income tax on it at whatever your rate is in retirement, which may be lower than your rate now.
Statistics: Posted by muffins14 — Thu Mar 14, 2024 8:06 am — Replies 9 — Views 479