Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25223  
Subject: Re: Switch From a Roth 401k to a Traditional 401 Date: 12/23/2012 12:17 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Congratulations on your first board post! You were such a smart young person to begin investing at age 22. As your story demonstrates, you are just getting started with your earning power over the future decades. Your tax liability will most likely increase with your growing compensation and increasing tax rates. So the money that you invest in a Roth IRA and a Roth 401k now, when your tax liability is lower than it is expected to be in 30-40 years, will reduce your tax liability in retirement where distributions would be tax free. Plus, you can withdraw your original contributions from the IRA at any time tax and penalty free (though I recommend letting your investments continue to work for your retirement).

Fuskie
Who sees the only benefit of a Traditional 401k to be the current year tax deduction which provides temporary tax relief at the expense of future liabilities, which could also be achieved through other itemized deductions...
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement