Currently 23, first year post-grad. I’m currently putting about 20% into Roth 401k, nothing into Roth IRA. Originally had traditional 401k but just switched current / future contributions to Roth 401k. Company 401k match only 6%.

Should I be maxing our Roth IRA and then focus on 401k contributions?

Help please, so many options!!

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OP, if you’re planning to go to grad school, you could opt for a Trad 401K vs Roth 401K for the next few years, then convert from former to latter when you’re in school (and presumably in a much lower tax bracket).

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Hi, jumping in late. Could someone explain why the idea of a Roth 401k early on in a career doesn’t make sense 99% of the time? I’ve seen multiple threads and excel models point to a Roth being better than traditional early on.

I’m fine hearing in-the-weed explanations or good easy to digest links

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Very helpful, thank you

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Outdated number wise

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In addition to the flowchart I would add:
HSA even before Roth IRA
Traditional 401k over Roth 401k

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^^ Exactly what A1 said 👍

My wealth advisor says to split between Roths and traditionals as much as you can so you have optionality when you retire depending on your tax situation.

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This is bad advice, there’s no need to hedge your bet with a Roth 401k when the traditional is a winner 99% of the time.

Also you can easily bypass income limits for Roth IRA, it’s a well established and legal practice that takes 5 minutes called “backdoor Roth contributions”.

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Thanks everyone, especially S1. Thinking I’ll shift back to traditional 401k (only have had 2 paychecks go into Roth 401k so far) then and also start contributing to Roth IRA as well.

My 23 year old self and future retiring self thank you all!!

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Would also look into something called mega backdoor Roth.

If Deloitte offers both an “after-tax 401k” (not Roth 401k) as well as “non-hardship in-service distributions” then this is an advanced method to funnel an additional $20-30k per year into a Roth IRA

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