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Roth 401(k): It’s Official

by Flexo on December 18, 2007

in Investing

As I mentioned recently, I am now eligible to participate in my company’s Roth 401(k). I spent some time yesterday to adjust my 25% pre-tax 401(k) contribution in order to take advantage of this offer. Even though the calculator I mentioned earlier told me I’d likely benefit the most from depositing my full contribution to the Roth, I decided to split the contribution almost evenly — 13% vs. 12% of my salary in favor of the Roth.

Depending on how things go with alternative income next year, I hope to increase my total contribution to fully maximize my 401(k) contributions to the $15,500 limit.

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Tagged as: 401(k), Investing, Retirement, roth



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Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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  • bob
    Yea - my company was one of the first to offer the Roth and I am so glad, the benefits of it are great - and I think a lot of people will be better off with the Roth than the traditional
  • Yay Flexo! I am in love with the Roth 401k! My company just announced this week that we are getting one too. I'll be switching.
  • kitty
    When I tried to use this calculator, I noticed a problem with it -- even thought I specified my 28% tax bracket and max allowed 401K contribution, it still calculated my invested tax savings value as $0. How can 28% (actually more if you add NY State taxes, but the calculator didn't include it) of 15500 invested for many years until I retire is $0? Interestingly when I played with other numbers, I still got the same result - $0 for tax savings that I get to invest myself. All of these savings I can put in Roth IRA on my own. I brought it up in the thread, but I don't think anybody replied.

    Have you checked your results from the calculator to make sure your results weren't affected by the same bug?

    At any rate, I am staying with regular 401K. If I sell some stocks, this may be the only thing that keeps me from being hit by the AMT, and if I don't sell stocks, this 401K deduction may keep my income low enough to be able to put something to Roth IRA.
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