Originally Posted by
EWRflyr
I'm over 50, so it's actually $30,500 for me this year ($31,000 in 2025). By putting the money in now while I'm in my prime earning years in the highest tax brackets I will be, I save income taxes on $30,000+ per year. I wil pay taxes on that money in retirement when I'm certainly not going to be making the money I make now and I'll be in a lower tax bracket. And this money has the opportunity to grow before retirement. If I decided to have this as take home pay, with federal and my local taxes that will turn into less than $20,000. Putting that into a basic savings or money market account will not come close to off setting the taxes on that, plus I have very few health care expenses at all.
It's not always that simple though. Our youngsters are more often than not better off putting their money in as Roth and taking the tax hit now. 20-30 years of growth tax free more often than not offsets the initial tax hit. Everyone should do your research or spend the $ to get advice on it. When you start getting close to retirement and see how much tax you're going to pay when you do start withdrawing (and the Medicare increase you'll pay) it can be eye opening lol. But these are 1st world problems thankfully.