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Here‘s the question you have to ask yourself: Is tax likely to go up or down in the future?
When I look at the current spending, debt levels, and fed policies, we have no choice but to raise the government’s income, which translates to higher taxes. The question is who will pay for it: the poor, the rich, or companies. I bet that it’s going to be the poor.
I think it’s mostly going to be companies, and the middle class (further bifurcating your “poor” population into a poor and middle classes). And I think most (at least in this bowl) plan on being middle class at retirement.
I don’t understand why so many people convince themselves they’ll want to retire on a lower income than they had early in their careers. You are probably going to have some level of success in your career. Lifestyle inflation is a thing. And many people eventually want kids.
When those things set in, you’ll realize even if you still want to FIRE, your number is going to be based on what it takes to support the lifestyle you want, and that lifestyle will probably be a lot more expensive than your first years out of school.
So if you’re under 30, unless you plan to have a career where you never get raises beyond inflation, you should probably be in Roth.
And I stand by the points that a) kids are expensive and b) lifestyle inflation is a thing. You may be happy making 65k, bringing home 40k after tax and spending <30k today to save >25%, but that doesn’t mean you’ll be able to do that at 40, or want to retire like that. My brother easily spends 25-30k each year just on summer vacations for his family of 4. I spend a bit less but only because I don’t have kids. If/when I retire, it better include a nice ski condo and those don’t come cheap.
Roth 100%. The tax-free growth over 30-40 years is why
You're right!! Stand corrected
Why do you think that you will be in a higher bracket when you are retired? You might be but most are not
I have a feeling that the rates for higher incomes will be higher. No idea if anyone will actually raise rates in lower bracket. You need to consider your facts and do what you think is best for you. For many just splitting will be best. I just think that when people say Roth is a no brainer, they often don’t really know and are often wrong
Rising Star
IMO there is no way tax rates are lower than your current rate in the future so I would do Roth
Rising Star
65 when I qualify for Medicare 😃
Roth all the way
Saying one or the other with no knowledge of the individuals facts is not really useful. Roth is the right answer for many but wrong for many
Pre tax 401k and mega back door Roth combo for the win 😭
😭