Marginal tax rate vs Roth

[docnews]

At what marginal tax rate would you invest in Roth 401k over Traditional 401k plus Taxable Account?

This assumes no significant debt, enough income to max HSA/bdRoth and the i401k either way plus saving 40% of post-tax income.

The reason for the question is my marginal rate after pass thru deduction is about 19%. I don't foresee taxes on the wealthy staying this low in the future. Though I realize you fill the lower brackets first but I will still have significant traditional 401k (only employer portion $19k/56k potentially going to be Roth at this point; not doing special 401k plan set up).

[Peds]

docnews wrote:

The reason for the question is my marginal rate after pass thru deduction is about 19%

Click to expand...

if that is true i think Roth is probably a good choice.

 

[Molar Mechanic]

Especially since you effectively get to put 19% more into a Roth than you do traditional.  If you can still max the accounts, I'd probably load up on Roth.

[q-school]

it depends on your overall wealth, how early you are going to retire, and your health in the later years.

if you retire young enough, you should have plenty of lower bracket space to convert at a better rate.

if you plan on working forever, it probably won't matter much.

ymmv

 

[Lordosis]

A lot depends on how much you plan to spend in retirement.  If you make 300K and spend 200K a year and continue this spending into retirement somehow you will be in a much higher tax bracket then if you make 300K and spend 70K.  Trying to predict future tax law changes might be harder then trying to predict the market.