I am 31 years old and 3 years out of residency as a general pediatrician making $230k/year. Since starting with my current employer I have been contributing 8% of my salary to a Roth 401k with the addition of 5% of my salary to "after tax" payments made and rolled into my Roth 401k (which I believe is the "Mega Backdoor Roth" method). My employer is also matching an additional 6%. I currently have about $100k in my Roth 401k with the following sources (56% Roth 401k, 23% Employer match, 21% Roth-conversions).
I understand that given I may be in my 'peak earning years', a traditional 401k would provide the best tax break. However it seems that reason alone in deciding Roth vs Traditional 401k does not take into account that the main benefit of the Roth 401k is the growth is tax-free for 30+ years which I anticipate to be a large amount since I am still early in my career. Also given the limits on contributions you are able to make each year, isn't every dollar I put into the Roth actually better since it won't be taxed again? Am I thinking of this incorrectly and should I actually be making traditional 401k contributions? Thanks for any advice.
I understand that given I may be in my 'peak earning years', a traditional 401k would provide the best tax break. However it seems that reason alone in deciding Roth vs Traditional 401k does not take into account that the main benefit of the Roth 401k is the growth is tax-free for 30+ years which I anticipate to be a large amount since I am still early in my career. Also given the limits on contributions you are able to make each year, isn't every dollar I put into the Roth actually better since it won't be taxed again? Am I thinking of this incorrectly and should I actually be making traditional 401k contributions? Thanks for any advice.
Comment