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401k and 401K Roth Contribution

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Money Talk > Retirement Planning

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Lili_Rabbit
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401k and 401K Roth Contribution  Reply with quote  

Hello, I have a question regarding my 401K and 401K Roth. In my new job, the company matches 6% for either 401k or 401k Roth. Currently I can only contribute up to 6% of my earnings (I wish I could do more but I can't until I get 2 credit cards off my back). Should I contribute 3% 401k and 3%401k Roth?

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Post Tue Feb 07, 2017 5:05 pm
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Publius
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This depends a lot on the period in your career, your salary (and therfore your current tax bracket) and the nature of your other retirement funds.

If you don't have anything in other ROTH accounts and your aren't in the highest tax bracket, it is probably a better bet to use the ROTH. The earlier you are in your career, the better the ROTH pans out as well as all the growth is tax free -- the longer the horizon, the more opportunity there is for compounding to work for you.

Here's a link to a decent calculator that will give you some idea of the difference.

https://research.scottrade.com/KnowledgeCenter/Public/Calculators/RothVsTraditionalIRA?
Post Wed Feb 08, 2017 4:03 pm
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