Hi there -- I have been lurking and reading all of your posts for some time now, and I am finally ready to jump in. I have a question…
My husband makes over $100K (we are in our mid 30s) and all of our retirement is in pre-tax accounts (mainly his 401K). I have been mulling over the idea to start saving some in a Roth since the contributions are after tax and the withrawals will not be taxed.
I know that when we withdraw his 401K money it will be taxed at our then current income rate. Roth money we contribute now is taxed at our now current rate. Won’t our rate NOW be higher than our rate THEN??
If we are wanting to increase our retirement savings, what would be the benefit of starting a Roth and paying taxes in our current tax bracket instead of upping his percentage with the 401K and waiting until he retires to pay tax on the money when he is making very little? (BTW-- he currently puts in 6% in his 401K and his company puts in 12%)
Thanks in advance for your comments!
My husband makes over $100K (we are in our mid 30s) and all of our retirement is in pre-tax accounts (mainly his 401K). I have been mulling over the idea to start saving some in a Roth since the contributions are after tax and the withrawals will not be taxed.
I know that when we withdraw his 401K money it will be taxed at our then current income rate. Roth money we contribute now is taxed at our now current rate. Won’t our rate NOW be higher than our rate THEN??
If we are wanting to increase our retirement savings, what would be the benefit of starting a Roth and paying taxes in our current tax bracket instead of upping his percentage with the 401K and waiting until he retires to pay tax on the money when he is making very little? (BTW-- he currently puts in 6% in his 401K and his company puts in 12%)
Thanks in advance for your comments!
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