{ "media_type": "text", "post_content": "If you live in NYC now but plan to move out eventually does it make sense to pick pre-tax 401k over a Roth 401k?", "post_id": "603ee6097b1ae100216d8b0c", "reply_count": 16, "vote_count": 3, "bowl_id": "5aa3ebca6a56fa0013ec82de", "bowl_name": "New York City" }

If you live in NYC now but plan to move out eventually does it make sense to pick pre-tax 401k over a Roth 401k?

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I don’t think it matters where you live as much as what you think your future tax bracket will be when you take distributions. Regardless of what you think your tax bracket is later, many believe taxes will go up so advocate for the Roth now because your principle and capital gains are tax free

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Well it all depends how much you’re investing, too. Play around with some calculators where you input your investments and assume an annualized return of like 7% over 30+ years. If you start early and invest consistently in low cost funds you might really surprise yourself with how much income you can have

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I go with traditional 401k. If you make too much money you will be rich anyways, low risk there in paying a bit more. If you go with roth and dont make enough...you're in potential trouble and the traditional tax savings would have helped you top up. You need to make a ton of money in retirement to get your effective or average tax rate in retirement > marginal tax rate in your working years.

helpful

Honestly you do you, it’s great you’re investing a 401k regardless of the tax status. Just don’t assume things will be the same in 30+ years

smart

Nooooooo! Roth 4 life!!

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Can you imagine what tax rates are going to be in the future!? They are going to be crazy high!

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