Does your employer offer both 401k and Roth 401k retirement choices? Which one should you choose - 401K or Roth 401K?
This is actually an easy and hard question at the same time.
It's easy to answer because there is only one determining factor - your tax rate, at both present and future time when you withdraw from your retirement account. Should you use marginal tax rate or effective rate? See our blog discussion here.
This is also a hard question at the same time, because while you know your current tax rate, it's a hard task to predict your future tax rate. Nevertheless, you need to make a prediction, in order to determine the answer.
Just plug in your numbers to the yellow areas in the 401k vs. Roth 401k online calculator below, then find out which option is more advantageous to you.
This is actually an easy and hard question at the same time.
It's easy to answer because there is only one determining factor - your tax rate, at both present and future time when you withdraw from your retirement account. Should you use marginal tax rate or effective rate? See our blog discussion here.
This is also a hard question at the same time, because while you know your current tax rate, it's a hard task to predict your future tax rate. Nevertheless, you need to make a prediction, in order to determine the answer.
Just plug in your numbers to the yellow areas in the 401k vs. Roth 401k online calculator below, then find out which option is more advantageous to you.
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