I am reading about the differences between Roth and traditional 401k. The big deciding factor seems to be relative tax % between now and retirement. An example from this article:
Imagine Sally and Sam max out their 401(k)s one year by each contributing $19,500. While Sally places her $19,500 contribution into a Roth 401(k), Sam places his $19,500 into a traditional 401(k). After 30 years, let’s assume both of their accounts have tripled in value to $58,500. Unfortunately, Sam still has to pay income taxes. Assuming that pays 30% in taxes, he will be left with only $40,950 to spend in retirement.
All of the examples have the same structures. They include guesses about future tax level "Assuming that pays 30% in taxes". Can we do better than guess?
What things might contribute to Sam's retirement income? Let's say he withdrawals 4% a year of his starting $58,500. That would be $2,340 a year. That would not land him in the 30% income bracket. He'd probably pay no taxes on that. So when people compute retirement income what other things qualify? If all you plan to live off of is your 401k, can't you already compute your income at retirement? (Assuming no changes to the tax code). What am I missing here?