Taxes, 401k, IRA etc.

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Feb 7th 2013, 7:35 pm

#16

nun

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Joined: Aug 2004

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Re: Taxes, 401k, IRA etc.

Quote:

Originally Posted by Anian

If everything tax-wise stays as it currently is (or taxes get higher), a Roth 401k seems to generally give more money by the time your retire if you only 30, however no one will actually tell you this because it counts as financial advice and you could sue them. So don't consider what I have said to be advice on choosing one! Lots of comparison tools on the net where you can plug your figures in and see how yours turns out.

The relative merit of the IRA/401k vs the ROTH/ROTH 401k depend on your current and future income tax rates. My retirement income will be a lot less than my current income and I anticipate that my tax rate will be a lot lowwer too, so I do as much tax deferred saving as I can, ie 401k etc. Howver, as I'm eligible to make ROTH contributions I do those too and I will probably do IRA to ROTH rollovers in years where my taxable income is low. The ROTH/ROTH 401k also has the advantage that it's free of all tax in the US and the UK and it makes tax reporting trivial.