re: 401k vs roth 401K contributions

I mean it’s really 50/50. If taxes are the same then there’s no change either way correct?

The more years you have until retirement the more beneficial the Roth option will be to you. Why? Because the more compounding/time your money will be invested.

Here's an example:

Let's say you are 35 and you will retire at 65. If you get a 7% annualized return your money will double every 10 years, or 3 times until you retire. So let's say you max at $19K. Would you rather pay tax today on $19K or pay tax on $152K ($19K doubled 3 times) later? If your money doesn't have the time to compound then this calculation isn't as impactful.

Another consideration is that taxes are essentially on sale for the next 7 years or so since the recent tax legislation.

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The difference also lies in the fact that someone will most likely be investing different amounts TODAY between traditional and Roth options. You can’t say oh 5,000 in a Roth today vs 5,000 in a traditional account in a truly fair assessment.

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The difference also lies in the fact that someone will most likely be investing different amounts TODAY between traditional and Roth options. You can’t say oh 5,000 in a Roth today vs 5,000 in a traditional account in a truly fair assessment.

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Exactly. On face without a doubt $19k in a roth is better than $19k in a trad 401k. BUt that's not an apples to apples comparison.

But I will say, for the average person myself included at times, we would be better off simply having that same amount pulled from our paycheck every 2 weeks then overthinking it and blowing it on some other crap we likely don't need.

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I know we can’t predict the future but I have a hard time thinking taxes in 10-20 years could be lower or even equal to where we are now. I don’t see how this could be possible given the trend with govt obligations and shifting political environment.

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Again though, my grandfather probably said this in the 60s.

Let's say they are higher though, I mean what's realistic? At what point is it worth paying your taxes now over keeping the money for 20 years? 5% higher? I'll keep my money. 10% higher? I'd still keep my money.

What are the chances taxes are 15% or more? I mean we really think the 20% tax rate now will be 35% in 20 years?

I'll tell you the only thing I know is guaranteed. If you pay your taxes now instead of in 20 years, you aren't getting that money back. So that's a big risk to take imo.

I don't know where taxes will be when I'm in retirement. But, I'd like access to a tax free pool of money (Roth) to use in retirement for big purchases like a new car, roof, a/c, vacation etc. I'll draw my regular living expenses from my taxable retirement account and then extras from Roth so I don't potentially raise my tax rates/bracket in the years I need to pay for those extras. Therefore, I save a little into the Roth 401k and will likely stop when I have say $100-150,000 saved. I also do a back-door Roth on top of my 401k and max out my health savings account which becomes a retirement account at age 65.