5

To first order, assuming your tax rate in retirement will be the same as now, you would be indifferent between traditional and Roth -- an equal reduction in current take-home pay will lead to equal after-tax retirement income. Note that the employer match always goes into a traditional account, so that does not affect the decision (since you are maxing out ...


3

Home ownership is an important piece of many retirement plans. The idea of paying rent or having to move any time a landlord doesn't want to renew your lease at 50+ years old doesn't sound pleasant to me, but many people are life-long renters, you just need to craft a plan that suits you. Even if you do want to own a home eventually, it doesn't have to be ...


2

I would take the free rent in exchange for management, for the simple reason that it's zero risk. You don't say whether you have previous experience doing property management. (If you do, you can disregard this.) Suppose you buy the house, rent out the rooms, and then discover that you hate doing that sort of management? Or worse, that you can't actually ...


2

My 401k custodian emailed me this information a few years ago: The IRS now says that a Traditional IRA and a Rollover IRA are the same account and follow the same rules. This means that you could make a contribution to your Rollover IRA. The only issue you may run into down the road (and it has nothing to do with the title of the account) is that if you ...


1

There is one variable that is often overlooked in the Traditional vs Roth calculation: It's possible your state income tax will be lower in retirement. For example, in Illinois and Mississippi, there is a state income tax, but not on retirement income. Or, when you retire you may move to a state without income tax. If you pay income tax today, but may not ...


1

Keep in mind, matching funds go into the traditional side of the 401(k). I am nearly 58, retired at 50. Roth came a bit too late for us. We were already in a high bracket, and stuck with the traditional 401(k). In the end, you can’t know what the tax rates will be in retirement. And the goal of a mix of the two types, 60/40 if you favor one over the other, ...


1

When you withdraw an excess contribution to an IRA, you are also expected to withdraw any gains attributable to that contribution, and those gains are taxable income (not classified as capital gains) to the IRA holder. For example, your IRA was worth $40K at the end of 2018 and you contributed $10,000 to the IRA for 2019, thus making a $4000 excess ...


Only top voted, non community-wiki answers of a minimum length are eligible