[quote=AN][quote=flu][quote=plm][quote=cvmom][quote=flu]Employer match is always to a traditional IRA, which currently my employer has at 4% I think.[/quote]
Flu, you gave me a heart attack on this. But I did confirm that my company matches to Roth 401k contributions as well, not only to the traditional one. Just FYI[/quote]
If you don’t mind my question, why do people pick Roth 401k instead of traditional 401k? I thought the whole point was to defer taxes till retirement where the income is lower. Is it maybe to hit the AMT sweet spot but that’s another concept I’m having trouble grasping?[/quote]
Oh shucks. My doesn’t. That sucks.
Plm. Well, in the case of cvmom, it totally makes sense to contribute to a Roth 401k if the employers matches into your account. The employer contribution. Would be tax free and earnings from it would be tax free. As far as why one would contribute to a Roth 401k instead of traditional IRA. Part of me is worried about required minimum distribution that might make my taxable income greater post retirement than now. Also, I believe in the case of a Roth 401k, you can withdraw what you contribute without a tax penalty ( since it was after tax dollars anyways).
The other half of me days who knows what they will do to Roth accounts. And for I need some tax defferals.[/quote]I don’t think the match goes into ROTH. I’ve contributed to Roth in the past and the match part goes to traditional 401k. The reasoning I got is because they don’t know how much to withhold for taxes.
Plm, the reason why I contributed to Roth 401k was because I wasn’t making very much, so I want to take full advantage of the low tax bracket and I expect to be earning more in my retirement. Once I cross a certain threshold, I switch back to traditional.[/quote]
Thanks for explaining. Makes sense if you will be earning more in retirement. I suppose I’m fortunate to make too much so I want to defer taxes but unfortunate that I still have to pay high taxes!
