Can you explain the benefit to that versus putting the max in just the Roth (if you qualify)?That is a good point about needed to take the IRA maximum into account. It many cases an unmatched 401K could be used just like a traditional IRA if it is available and the limits have been reached. Here is some more detail about what I was talking about assuming that the IRA maximum is not an issue. There are three different scenarios with the following assumptions;1) The contributions will reduce the take home pay by $20002) The marginal tax rate is 30%.3) The money will be invested in the retirement accounts long enough to double four times to be 16 times the original amount.4) There is not any other taxable income at retirement.5) Everything is in current dollars.(no inflation adjustments)Scenario 1 : Everything in a RothContribution: $2,000Final amt(x16) $32,000Taxes $0Rtirement income $32,000Scenario 2 : Everything in a Traditional IRAContribution: $2,857 Tax refund $857Final amt(x16) $45,714Deductions $10,000Taxable inc. $33,714Taxes 30% $10,714Retirement income $35,000Scenario 3 : Evenly splitRothContribution: $1,000Final amt(x16) $16,000Taxes $0Retirement income $16,000Traditional IRAContribution: $1,429Tax refund $429Final amt(x16) $22,857Deductions $10,000Taxable inc. $12,857Taxes 10% $1,286 Retirement income $21,571(note: lower tax 10% tax bracket even if the tax rate were still 30% there would be a $3,000 ($10,000*.3)difference)Total Retirement income:$21,571+16,000=$37,571 which is about 17% more than scenario one.This example is clearly a bit simplistic and could vary greatly depending on which assumptions are made. Greg
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