Should 401k be contributed Roth or Pre-Tax?
Question in title.
Question in title.
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you can do whatever the fuck you want
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A few things here:
401ks often have employer matches, so you should max your 401k, then contribute to an IRA if you are able to.
For traditional 401(k) contributions, you get the tax deduction now but withdrawals are taxed as ordinary income at retirement. For Roth 401(k) contributions, you pay tax now but withdrawals at retirement are tax-free.
So traditional 401(k) contributions would make sense if you think your current marginal tax rate (i.e. current tax bracket) is larger than what you expect your marginal tax rate to be at retirement, and Roth 401(k) contributions would make sense if you think your current rate is less than what you expect your retirement rate will be.
Two other less-discussed but still valid points:
(Disclaimer: not investment, tax, or legal advice.)
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