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The most important piece is to max it out since you begin working. Have done that for 21 years since entering workforce in 2001.

I have used traditional 401k to get upfront tax savings.

100% equity - 65/35 US Intl split all index funds in cap growth/value dimensions.

Generally don’t even worry about fluctuations as you can’t touch them anyways till way down the line.

Lastly, you sequence the following if you want to approach retirement early my biggest learning. You will need a bridge if you retire early in the form of taxable investments say 50-60, then can tap traditional 401k/Ira, 70 tap SS if still around, then Roth funds last.

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In my younger years max traditional 401k and maxed Roth IRA until I couldn’t contribute to Roth IRA due to income limits. Think you are trying to be to precise in a 40-50 year journey the key thing is you save early and often, let compounding do the rest.

Key is to have a mix of emergency funds,
taxable investment portfolio, Traditional 401k / IRA, Roth 401k / IRA and hopefully something of SS as a pension tap at full benefits.

My whole goal was to always glide down once my children head to college in 5 years.

We have no debt, will downsize when they head to college. Will have 1M+ cash out once we sell our primary home with the rest cash to buy a more manageable footprint “downsize” which will bridge 50-60 and/or can glide to work I enjoy and continue Roth IRA contributions and or 401k or not (my wife and I plan to do extensive travel during these years) tap traditional 401ks/IRAs 60-70, SS 70 onwards, and bridge any income gaps with Traditional 401k/IRAs then Roth IRAs and HSA rest to children.

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Max out both, invest the remaining separately. Doesn’t have to be in publicly traded securities either, you could go private equity funding with just 20 to 30k into a startup and hold until / if ipo or buy back.

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Where can I look into PE funds?

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Hell yeah. Sorry I don’t have advice, but you’re doing great!

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Agree with others that you’re doing fantastic. Also agree that smart people will have different opinions on the Roth vs Traditional 401k contribution levels as it depends on your outlook on the future and potential retirement age among other factors.

All that said, I will make an argument I learned that has helped me greatly. If you are already maxing out your 401k and want to do more then it may make sense to do 100% traditional contributions and take the tax savings today and invest that as well.

Note - numbers below are examples to simplify…

Let’s say you are doing $20,500 today to max your 401k and it’s all Roth. That may actually require closer to $26,500 given the taxes paid. What if you switched it to all traditional and took the $6,000 you would have paid in taxes and invested it as well? It could be a Roth IRA, brokerage, or many other things but you’d then be saving even more and letting that compound.

For me, I choose to max traditional 401k and then conduct back door / mega back door Roth contributions + brokerage and other vehicles.

Hope this helps!

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This is very helpful! Thank you!

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26 making 187k? Explain

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Sure - what would you like to know?

How do you have $125k in the account if you have contributed for 3 years (~$60k) and you are down approx 20% overall? Has your company match accounted for over $60k in additional contributions?

likesmart

Math doesn’t work. And there is no match at Accenture in first 12-18 months of employment. I don’t see how this portfolio got to $125K at age 26

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Idk, I tell my kids to do as much Roth as they can afford. Your tax rate is probably lower now than it will be later. Roth is a relative bargain

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But wouldn’t it make sense for me to at least do the 6% in traditional so I get the match? So if I split 20% —> 14% Roth and 6% pre/traditional at least this way a bigger chunk will go to after tax and then I get the free match.

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Correct it's both. The thing that doesn't get the match is the post tax 401k. Use that one for mega backdoor Roth. Just remember to keep your Roth or traditional at 6% to keep the full match

If you're okay with investing as heavy as possible and being more cash light, definitely max the traditional 401k, backdoor Roth IRA (Mega backdoor if possible), max HSA, then find a place to invest that you can touch easily should you need money before your retirement accounts can kick in

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With so much uncertainty on what tax's laws will be in retirement and how much I expect to be making or withdrawing in MRD I've given up on finding the "right answer" on traditional vs Roth. A mix of both is the safest route.

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What do you do for Accenture to make 187k base! #help

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What's your level?

Correct me if I’m wrong but long term investments earnings are taxed at a lower percentage tax rate than income. If you are paying taxes on income to have interest free growth (Roth) for 125k, you are paying a higher percent tax rate for anything above 41k since according to this years bracket they will be taxes at 22%+. On the other hand you would pay long term capital gains tax on anything above 41k (by putting in traditional), you are effectively paying 15% tax up to ~400k. From what I understand these brackets may go up which is something to consider.

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I believe accenture matches both, but only 6% either way (might be wrong). I agree with everyone else here - only thing I might add is to opt out of mutual funds if you can find an ETF that mimics the same benchmark.

Mutual funds charge a might higher fee (I’ve seen 1.5% sometimes) for active management that almost makes up for it in excess returns

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The company match amount will go into traditional.

Hey so the best way is to meet with a financial advisor and I think Accenture provides that. I was able to redo my allocation based on recommendations from my financial advisor.

You are young....dnt go for this decade old plan.

Keep maxing it out - the market will improve before you retire and have to use the funds.

How can you invest in your Roth given your current income over the limit? Is it backdoor roth ira or you are filing as married w/ you as the only income?

Roth 401k doesn't have an income limit. You're confusing with Roth IRA. But with the IRA you can still backdoor it.

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Are you guys hiring? #help

How do you make that much 4 years in?. That’s out of the consultant band, so that means going up 4 levels in 4 years (A->SA->C->M) is close to impossible.

Not impossible, but I’d say top 20% performers with some luck sprinkled in. I’ve even seen 3.5 years

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