https://boards.hellobee.com/ Pregnancy, Baby and Parenting blog, by Hellobee en Mon, 13 Apr 2026 09:51:01 +0000 https://boards.hellobee.com/topic/roth401k-v-401k#post-2852841 Tue, 23 Oct 2018 11:56:34 +0000 Adira 2852841@https://boards.hellobee.com/ <p>@PurplePeony: Thanks for clarifying!! </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852839 Tue, 23 Oct 2018 11:52:04 +0000 PurplePeony 2852839@https://boards.hellobee.com/ <p>@Adira: you have to roll your Roth 401(k) into a Roth IRA. I edited above to clarify that. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852837 Tue, 23 Oct 2018 11:46:27 +0000 Adira 2852837@https://boards.hellobee.com/ <p>@PurplePeony: Are you sure about that with the RMDs? This IRS FAQ says the RMD applies to both traditional and roth 401ks.</p> <p><a href="https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions" rel="nofollow">https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions</a> </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852834 Tue, 23 Oct 2018 11:31:08 +0000 PurplePeony 2852834@https://boards.hellobee.com/ <p>@Anagram: Roth IRAs also don’t require you to take required minimum distributions (RMDs) when you reach 70 1/2. With tax-deferred accounts, the government forces you to take a certain percentage—and pay taxes on it—every year after you reach that age. The bigger your balance, the more you have to take out, even if you don’t need it to live on. You can reinvest it, of course, but only after paying the taxes, and having to take RMDs can end up bumping you into a higher tax bracket. With Roth IRAs, you can truly only withdraw what you need (if your money is in a Roth 401(k), you do have to roll it into a Roth IRA to get this benefit but that’s easy to do). Also, in the event there’s money left in your retirement accounts when you die, it’s far more beneficial for your heirs to inherit a Roth than a tax-deferred account. Another benefit is you can withdraw your Roth contributions (but not earnings) penalty-free after you’ve held the account at least 5 years, even before you’re 59 1/2—not that most people should be using that option regularly, but there are scenarios where that flexibility can be a huge plus.</p> <p>My plan is to aim for about a 50-50 split between traditional and Roth assets. When I retire, I’ll roll my Roth 401(k) portion into a Roth IRA and withdraw only what I need to supplement our income after taking the RMDs from my traditional account. Since all distributions from a Roth (principal and earnings) are tax-free after 59 1/2, I’d rather draw down the taxable account first and let the Roth keep growing for as long as possible, even in retirement.</p> <p>Of course, this could all get upended if there are any changes to the laws governing retirement accounts, but I think it’s a good idea to hedge my bets with both types. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852815 Tue, 23 Oct 2018 10:23:34 +0000 gotkimchi 2852815@https://boards.hellobee.com/ <p>@Adira: @Anagram: just because my tax guy (who is retirement age) said that as he moves towards retirement he wishes all of his money was in a Roth. And also I don’t trust the government that our tax bracket will actually be lower you know? Like a lot of shit can change in the next 30 years and I’m just assuming it won’t be in my favor :silly: </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852813 Tue, 23 Oct 2018 10:20:10 +0000 Anagram 2852813@https://boards.hellobee.com/ <p>@gotkimchi: Here's a calculator I found, if you want to play around with plugging in different numbers.</p> <p>The hard part for me is always guessing our tax bracket in retirement. We're in our late 30s, but still retirement seems so far away. I have no idea what I'll tax bracket will actually be at that point, so I usually go by the conventional wisdom that we'll be a lower bracket. But i don't really know for sure.</p> <p><a href="https://www.aarp.org/work/retirement-planning/roth_vs_traditional_401k_calculator.html" rel="nofollow">https://www.aarp.org/work/retirement-planning/roth_vs_traditional_401k_calculator.html</a> </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852796 Tue, 23 Oct 2018 09:49:08 +0000 Adira 2852796@https://boards.hellobee.com/ <p>@Anagram: This is my question too!</p> <p>I have all of mine in a traditional 401k. I'm an engineer and make a pretty good income, and I imagine in retirement I won't need nearly as much (mortgage will be paid off, no daycare, hopefully no college costs). I'm planning on my income to be LESS in retirement. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852795 Tue, 23 Oct 2018 09:45:07 +0000 Anagram 2852795@https://boards.hellobee.com/ <p>@gotkimchi: I'm not an expert on this stuff, just an interested follower. You said you'd prefer to have most of your retirement savings in a roth401k. Why? Do you expect your income tax bracket in retirement to be higher than your current income tax bracket? </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852721 Mon, 22 Oct 2018 18:20:40 +0000 gotkimchi 2852721@https://boards.hellobee.com/ <p>@PurplePeony: haha I was using paycheck city too! It’s close but always off by 60 bucks or so. I can change it online but it sometimes takes a paycheck to kick in. I think that’s a good theory to jus up the Roth when I can </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852719 Mon, 22 Oct 2018 18:05:44 +0000 PurplePeony 2852719@https://boards.hellobee.com/ <p>@gotkimchi: does your work make it easy to adjust your contributions whenever you want? I have self-service so I just submit changes online and it gets processed automatically, which has allowed me to play with amounts as much as I like. I also tried using paycheckcity.com to estimate how making changes would affect my take-home, and although it was pretty close I could never get it to calculate quite correctly...worth a try, though. My philosophy is just to bump up my Roth percentages as much as I can, whenever I can. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852716 Mon, 22 Oct 2018 17:48:09 +0000 gotkimchi 2852716@https://boards.hellobee.com/ <p>@PurplePeony: this is one reason I’d love to move some to my Roth - to even out the balances because 75% of our current retirement accts pretax. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852705 Mon, 22 Oct 2018 17:29:47 +0000 codeitall 2852705@https://boards.hellobee.com/ <p>We do a mix. When I've had a maternity leave that year, our income drops, so I've upped our Roth contributions those years because we don't need the tax benefits as much. If I was really on top of it, I'd do Roth conversions those years (all company contributions are pre-tax).</p> <p>I will say that we've become a double income family and I anticipate not having dual-income in the future, so we've mostly shifted to pre-tax this year. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852471 Sun, 21 Oct 2018 23:20:55 +0000 PurplePeony 2852471@https://boards.hellobee.com/ <p>I struggled with the same question and eventually decided to allocate $500 to my Roth and $230 to the traditional side per pay period in 2019 in order to max out my contributions for the year (unofficially projected to be $19k, up from $18.5k in 2018; official numbers should be announced soon). My employer matches 5% of my salary but by law that always goes on the traditional side. I’d love to eventually up the Roth contributions to get a more even split in my overall retirement account balances (right now they’re heavily weighted toward the traditional side) but the increased taxes/decreased take-home don’t pencil out right now. I’ll probably adjust my contributions as I’m able to, though. I listen to a lot of personal finance podcasts and the general consensus seems to be that it’s a good time to put money in Roth accounts, since taxes rates are currently at historic lows — but it’s not a bad idea to hedge your bets by having a mix of asset types, since there’s always a chance Congress could make changes to the Roth structure in the future that would make it less of a good deal. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852455 Sun, 21 Oct 2018 20:24:21 +0000 gotkimchi 2852455@https://boards.hellobee.com/ <p>@JCCovi: interesting thanks! </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852437 Sun, 21 Oct 2018 17:49:35 +0000 JCCovi 2852437@https://boards.hellobee.com/ <p>We do 50/50 but move it around as we need more/less cash. </p> <p>You can always use a backdoor Roth in the future: roll your traditional into a Roth and pay taxes on it if you have a low income year in the future. </p> https://boards.hellobee.com/topic/roth401k-v-401k#post-2852416 Sun, 21 Oct 2018 13:45:12 +0000 gotkimchi 2852416@https://boards.hellobee.com/ <p>My work is newly allowing us to use a roth401k in 2019. I understand the differences but I’m struggling with how much to put in. I contribute 10% to my 401k and work matches 5%. My preference for retirement would be for all of it to be in the Roth but I think we need the income reduction that comes with the regular 401k. So what do you guys do? All of it? 50/50? Something else? </p>