Originally Posted by
GogglesPisano
That's always been one I can't figure out.. How can your tax rate ever be higher when you're retired? Seems like a Roth 401k exposes you to way more taxation now when you're making 6 figures, than the potential taxes on a straight 401k when you retire.
Depends on how long you have until retirement. Its more than just tax rates, it also includes taxes on the gains. If you have 30+ years to go, $10,000 now may grow to $100,000 at retirement. Better to pay income tax on the 10 large now and keep the $90,000 in gains later tax free.
If you only have a few years until retirement, the math probably works better in favor of a traditional 401k/IRA.
Of course everyones situation is different so do your own diligence/consult with an advisor etc.