401 k vs. U.P.S. stock

[1989]

Just remember the ROTH is for high income people. Most of us will not be in a higher tax bracket in retirement especially the way the whole pension thing is going. The money you lose now on OT is huge so you are better off not paying that tax now. I guess for married UPSERS with a huge nest egg a ROTH makes sense but I would bet most Teamsters will not make more money in retirement. There are calculators that will show you which is better depending on your projected retirement income.

High income earners can't have a roth.

If I take money taxed at 15%. $5000 a year for 30 years @ 4% I would have $308000. And would have paid $22500 in taxes over those 30 years.
$308000 minus total investment $172500 (150000 + 22500) = $135500 of earnings. I would be free to do anything with that money.

If I put that same $5000 a year in a 401K @ 4% I would have $308000 and will have to pay $46200 in taxes at a 15% tax rate.
$308000 minus total investment $196200 (150000 + 46200) = $111800 of earnings. I would have to withdrawal over several years or get a larger tax bill. Plus I forgot the fees you are paying.

Is my math wrong?

Roth = more earnings $135500 less restrictions
401K = less earnings $111800 (minus fees) more restrictions

 

[lastoasis]

High income earners can't have a roth.

If I take money taxed at 15%. $5000 a year for 30 years @ 4% I would have $308000. And would have paid $22500 in taxes over those 30 years.
$308000 minus total investment $172500 (150000 + 22500) = $135500 of earnings. I would be free to do anything with that money.

If I put that same $5000 a year in a 401K @ 4% I would have $308000 and will have to pay $46200 in taxes at a 15% tax rate.
$308000 minus total investment $196200 (150000 + 46200) = $111800 of earnings. I would have to withdrawal over several years or get a larger tax bill. Plus I forgot the fees you are paying.

Is my math wrong?

Roth = more earnings $135500 less restrictions
401K = less earnings $111800 (minus fees) more restrictions

don't forget you don't pay any tax on that 5K every year for the 401K