This is a common misnomer that used to apply years ago. Now days if you retire with a retirement plan like we have, your tax bracket will either be the same or maybe 1-2% lower. There is no reason to wait for tax savings down the road. They won't be there.

When you retire you will lose most of the deductions you were accustomed to having while working.401(K), business deductions, state income tax(where I live), and interest on your home as hopefully it will be paid off. In our fifth year of retirement and we are paying the same rate we did the last year I worked.

Let me start with I am not expert. I spent a lot of time plugging in numbers to a spreadsheet (yes I built one) trying to solve this question. I am over 50. The bottom line was for normal rates of return 7-13% there was not that much difference between the two investment option in terms of what you get after taxes down the road. Most of the time the Roth 401k gave more per year but in the low hundred maybe as much as $250 dollars more.

Now there are a couple points that make that true. For the two plans to be similar, you must be investing the tax savings back into the plan. For example, if your tax savings on 23K is 8K, you must invest that 8K back into your 401k as after tax savings. If you do not invest the tax savings, then the Roth 401k kills and there is no comparison. The Roth will crush the traditional 401k.

The deciding factor for me was the fact that I don't have mandatory withdrawals from the Roth 401k like I will with the traditional 401k. That means hopefully, I never have to withdraw that money and it's there for my wife later down the road.

If you're still working at 70 1/2 there is no RMD from a Roth 401K. If you're retired, there are RMD's. (tax free) RMD's can be avoided by rolling the Roth 401K into a Roth IRA.

I don't know, it depends upon the situation. Depending upon your income before retirement (which often includes spousal income), you could easily be in the 39.6% top bracket, and drop down to the 28% bracket. That is, unless tax rates change....and who knows how to plan for that?

However, I think it's a really good idea to convert IRA's to a Roth, the sooner the better, unless one is going into a lower tax rate pretty soon, as long as one has the money to pay for taxes. We converted an IRA into a Roth several years ago, sucked it up and paid the taxes, and now it's worth triple the value. I would not want to pay taxes on the higher amount! If only the market would massively crash, we'd convert everything we could, and pay less in taxes.

All of my IRA's have been converted to Roth IRA's, and I have been doing the back door Roth from 2012.

I have not done a Roth 401K, but I am considering it.

I max out my 401K contributions each year.

Does the $60K limit apply to the Roth 401K as well?

I have almost maxed mine out for the year, but am considering Roth 401K for next year.

Thanks for all the gouge.

Yes, the total amount that the employee and employer can contribute toward any defined contribution plan is $60k if you are 50 or older.

Why are you considering changing to Roth 401k now? I'm assuming you're in a high bracket now, so just asking to see if you've considered the tax consequences.

I thought I would put my after tax 5% into a Roth 401k.

I am paying taxes on it anyway...

I will move the rest in retirement, unless the tax laws really change.

Is there somewhere to see what each year's pensionable earnings are (what the "High-5" is based on). I know we get a letter in the mail every year, but mine is nowhere to be found.

There used to be on the green screen but I haven't been able to get it to work in a couple of years. I haven't found anything similar on the replacement.