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I've been writing a thesis and am at the point that I would like recommendations for improvements/critiques.

The two files are the thesis itself (19 pages doublespaced) and the underlying excel model. My professor is having a hard time understanding my excel model. I'm assuming there are probably excel gurus on this board who can delve into it on a deeper level and give some good feedback.

Below are download links as well as the introduction to the thesis.

Generally, most articles regarding Roth and Traditional taxation structures are titled “Roth vs. Traditional” as if there is an upcoming boxing match between the two. These articles list vague circumstances where one should be used over the other and ignore that an investor can have the best of both worlds.
With the Roth 401k becoming ever popular since its inception in 2006, employees with access to both taxation vehicles have had to choose which taxation structure to pick with little guidance as to which one would be more beneficial. The choice between taxation structures can dramatically impact the lifestyle that an individual receives in retirement. This paper formulates a strategy for maximizing the after-tax payouts of a 401k by using both taxation structures.
The formulation of this strategy should be fiscally rewarding to workers with access to both types of 401ks who are early on in their careers. This paper will also be useful to 401k managers, certified financial planners, employers who are considering the benefits of making a Roth 401k available to their workers, as well as individuals are generally interested in the topic of retirement taxation.
This paper found that the optimal solution for a 401k (in most circumstances) is to choose a Roth taxation structure in the earlier years of employment where income is lower and contributions will grow the longest and have the largest impact on tax rate at withdrawal. Then, at a certain point termed the “Switching Point”, it is beneficial to stop contributions to the Roth 401k, keep the current funds in the Roth 401k, allow them to grow, and then start contributing to a Traditional 401k until retirement. This strategy allows the investor to gain the most money in retirement at no cost other than the time to learn this strategy and open an additional Traditional taxation structure which is generally free and effortless. The switching point times vary based upon a variety of factors such as salary, amount of years contributing, amount of years in retirement, interest rate, amount contributed annually, and additionally taxable income earned during retirement. The tax rate at contribution as well as the tax rate at retirement are not factors as they are determined by the factors previously listed. The tax rate at contribution is determined by the salary earned in the year of contribution while the tax rate at withdrawal is determined by a variety of factors such as choice of taxation structure, contribution amount, interest rate, length of contribution as well as length of withdrawal.




1. Use a combo of 401k types (Roth early Trad late) to minimize taxes

2. Taxation thresholds for social security are not indexed for inflation giving massive tax benefits to going purely with a Roth structure.

3. Contribution amounts relative to your salary drastically change your switching point

4. D/L excel sheet use as calc.

5. Current calculators are inefficient as they make a user input their tax rate at retirement into the calc when it is determined by the vary answer the calc is supposed to give. i.e. current calcs use circular logic to give crucial financial advice.
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