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re: 401k
Posted on 1/10/20 at 8:21 am to bluewing
Posted on 1/10/20 at 8:21 am to bluewing
For those that have switched or split between a regular 401k to a Roth 401k, have you seen a change in your take home pay and/or taxes at the end of the yr? I just started splitting this year but I’m hesitant to put more into the Roth until I see what it does to me come tax time next yr.
This post was edited on 1/10/20 at 8:47 am
2
Posted on 1/10/20 at 8:29 am to GCTigahs
quote:
change in your take hom
Your take home pay is lower with a Roth 401k
Posted on 1/10/20 at 8:37 am to GCTigahs
quote:
For those that have switched or split between a regular 401k to a Roth 401k, have you seen a change in your take home pay and/or taxes at the end of the yr? I just started splitting this year but I’m hesitant to put more into the Roth until I see what it does to me come tax time next yr.
That is easy to calculate. Use your highest marginal tax rate to do the calculation.
For example:
- $5,000 to 401k previously = zero taxes
- $2,500 to 401k = zero taxes
- $2,500 to roth 401k = $705 in taxes (assuming 22% marginal tax rate)
If you don't want your take home pay to change, reduce the Roth contribution so that your Roth + taxes = the amount you reduced the traditional by.
This post was edited on 1/10/20 at 8:40 am
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