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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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.
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.