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Any McKinsey & Company fishes open to referring?
Best office chair? My back is so angry with me.
Pro
When you’re at the highest tax bracket you’ll hit
Rising Star
Traditional ALWAYS makes more sense than Roth. If you max out on Roth, the amount taxed means you lose out on several million dollars of growth by the time you retire
Pre-tax: $100k. Grows 2x to $200k. Taxes at 30% down to $140k.
Post-tax: $70k (after 30% tax). Grows 2x to $140k.
So… all else equal $140k equals $140k. No you don’t lose out on “several million of growth.” Am I missing something?
I think it’s more to do with what tax bracket you expect when you retire. Typically one would expect to be in a lower bracket, but it may make sense to hedge against tax policy changes and do half and half. In the long run, it won’t make much of a difference.
Pro
VP you make a good point that matches are only traditional so maybe if I contribute to Roth that will balance out a bit, more in line with that 50/50 strategy.
Rising Star
What’s the logic behind 50/50?
Basic hedge. Not knowing which is better.
I do 50/50 as well.