To Roth 401K or Traditional

Whats your projected tax situation and any other income sources at withdrawal? Married or single? Heirs? Health care plan in early retirement?

Roth may be useful to top.off income so you dont go over ACA subsidy MAGI limits. Same later when IRMAA starts being calculated off income at 63. Roth not subject to RMDs and heirs receive it tax free plus 10 years additional tax free growth. Then, there's always the risk that tax rates go up between now and then. Remember you arent just planning for withdrawals in 14 yrs at 55 but another 30+ years after. Locking in 22% now may not be a bad trade off.

There really is no one size fits all answer, it is very situation dependent. I'm not saying go Roth over traditional just cant rule it out without much more context.

We're MFJ and I pretty much plan to stay within the 12% tax bracket (assuming it still exists) for the rest of our lives. I'm thinking if I start doing Traditional 401K to Roth 401k conversions in some low income years, in addition to withdrawing pretax to live off at 55, then I'm projecting my pretax balance to be in the neighborhood of $1.5M to $2M for RMD purposes. Maybe even keep doing conversions as much as possible for inheritance purposes.

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We're MFJ and I pretty much plan to stay within the 12% tax bracket (assuming it still exists) for the rest of our lives.

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What's your wife's plans?

If you have $1M at 41, I don't see that happening. I think you are going to learn all about IRMAA and RMD's and you'll think very differently about Roth, which you need to do at your age when there is still time for smaller changes to give you big results.

In my opinion, and it is only opinion, everyone needs some Roth assets, at least something like 80% trad/20% Roth, just for flexibility in retirement for things like new roofs, new cars, new AC, so that those things don't force you to bust a bracket and cause a large taxable event. At least with a Roth, you can choose the timing of it.

Another thing pertinent to an early retiree is health insurance. You need to start thinking about it, and planning for it now. One thing some early retiree's do, years before, is start converting traditional IRA assets to Roth. You can withdraw the conversions tax and penalty free at any age as long as the conversion is 5 years old and the account is also 5 years old. People build what's called a Roth Ladder to get through a few years with a lower taxable income which gives them lower health insurance costs. The conversion rules in 401K aren't the same.

It sounds like you don't have any IRA assets to convert, just 401K. Some employers allow an in-service rollover, where you can roll over part of your 401K to an IRA. I've never had it, but if your employer really gives a 9% match maybe they offer that. Most plans allow it only after 59.5, but some will allow it once a year at any age.

I wouldn’t recommend this. Any Roth assets should be left for the last bucket you spend. It’s growing tax free. It should be the most aggressive allocation you have.

I do agree with your premise though. But instead of growing just pre-tax and Roth accounts most people should also be growing a non-qualified or taxable account. It’s the most flexible bucket of money you can have. And you can utilize tax loss harvesting to help avoid any major capital gains.

Ideally, you retire with pre-tax, Roth and a large taxable investment account. That way when you’re retired you have all kinds of options.

Many people would be better off later in life not maxing out retirement accounts and just contributing for the match and then growing the non-qualified taxable account.

Once again, there isn't a one size fits all solution here. I don't have anyone to leave anything to. I am not concerned about conserving my Roth. It is logical to draw from it last still, but it was very useful to me for the four years I was retired (starting age 55) before I returned to work.