retirement account advice out of residency

[etscch01]

Hey everyone, new general pediatrician out of residency for about 6 months now. Wanted to get others opinions on traditional 401k vs Roth 401k contributions. Do you feel that the tax advantages now are a definite reason to contribute traditionally vs Roth? It makes sense that Roth would be more advantageous if you expect to be in a higher tax bracket in retirement. I also have access to a 457b and an HSA, both of which I'm maxing out currently. Does having these additional accounts change your thinking?

 

Thanks in advance for your response. Really appreciate all the wisdom and experience on these boards!

 

Chris

[PhysicianOnFIRE]

It will depend largely on your marginal tax rate. At 28% and above, I think deferring tax is going to be a better option for most. Under the 25% bracket (which I doubt you would be), Roth is smart.

If you can afford it, I would max all the tax deferred space available, and if you have money leftover, consider a backdoor Roth.

Best,

-PoF

[etscch01]

Thanks for the advice PoF,

I'm currently sitting at 28%, but anticipate getting to 33% after I'm off guarantee and on production in another 18 months. More compelling evidence to contribute traditionally.

Chris

[jfoxcpacfp]

etscch01 wrote:

Hey everyone, new general pediatrician out of residency for about 6 months now. Wanted to get others opinions on traditional 401k vs Roth 401k contributions. Do you feel that the tax advantages now are a definite reason to contribute traditionally vs Roth? It makes sense that Roth would be more advantageous if you expect to be in a higher tax bracket in retirement. I also have access to a 457b and an HSA, both of which I’m maxing out currently. Does having these additional accounts change your thinking?

 

Click to expand...

Put me on the Roth bandwagon. The opportunity to grow tax-free wealth by foregoing an advance deduction is, imo, a benefit that is hard to overcome. You'll thank me at age 59.5.