My employer just offered the option of the Roth 401k. I have done some research, but still have yet to hear a compelling argument of one over another. I understand that, in general, if you believe you are in a higher tax bracket now then at retirement, go traditional. If lower now than in retirement, go Roth. I also understand that there are advantages and disadvantages to both. If all things remained the same (big IF), I would assume that I am in a higher bracket now then at retirement. However, I am also intrigued at the notion of diversifying my tax situation. What would you do in my situation and why? Traditional, Roth, or combination of both?
Some quick personal information:
- 30 years old, married, 2 kids under 3. Plan to retire from the
traditional job market around 50.
- 100% of my salary is saved. We live off my wife's salary, so take
home pay is not a consideration.
- Household income is above the limits for a Roth IRA, so currently
only have about 10k invested in Roth IRA's with no future
- Contribute the max to my 401k and plan to continue doing so.
If there is additional information needed, just ask. Thanks again for
all your help.
- posted 12 years ago