[‎‎‎‎Clancy]

Looking for advice on Roth 401k vs traditional 401k contributions
I’m 52 and planning to retire in 3 years.

I’m in the 24% tax bracket federally and 9.9% state tax bracket.

I have mostly traditional 401k and IRA invested, but began doing back door Roth IRA about 18 months ago.

Last year I changed my traditional 401k contribution to all Roth but given my tax bracket and desire to retire early I’m wondering if it would be best to revert back to pre tax traditional 401k and then convert to Roth after I retire and my income is lower.

Perhaps a hybrid and do 70% pre tax and 30% Roth 401k?

Thank you!

[Rick]

It’s possible but unlikely that you chose not to mention a very large pension, strong desire to claim SS at age 62, and a current pretax value already approaching $1m.

Outside that combo, I cannot think of anything that would come close to making roth401k now worth it paying 34% marginal tax rate now versus an 8-16% effective tax rate for a Roth conversion in retirement.
Go pretax now.

[Dave]

If your income in retirement will put you in a lower tax bracket do 100% pre tax in the 401K.

[Ron]

How will you find your spending during early retirement? Note, I personally found it better to contribute to traditional during early retirement versus Roth.

Different, since I was already retired, but I calculated tax advantages from lowering my income exceeded that of having the money in Roth earlier.

[Tony]

I did this. I switched to Roth. I’m 59. I have three kids that will inherit what I don’t use and Roth is the best to inherit.

I’ll spend out of traditional first.

[Author]

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