So I’ve been following this community for some time now and the consensus is that if you believe you will be in a lower marginal tax rate in retire than you think you are in today then traditional is better.
So if I’m maxing out my 401k and invest $19000 this year. I’m 31 so the earliest I would retire is 29 years from now. I’m currently in the 24% marginal tax rate so $19000x24%=$4560 in taxes.
Since all gains on a Roth 401k is tax free assuming even a 5% annual return $19000*1.0529 = $78206.75 by the time I retire. $4560/$78206.75 = 5.83%.
Doesn’t this mean if I think my margin tax rate is going to be above 5.83% marginal tax rate I should do a Roth?
Am I missing something here?
Submitted March 30, 2019 at 02:42AM by control1110 https://ift.tt/2JPjqHX
