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401(k) allocations
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<blockquote data-quote="Jackburton" data-source="post: 1003905" data-attributes="member: 34538"><p>By placing 17k max in Roth 401k vs Traditional you actually put more ( read your tax bracket) into your retirement. All monies grown in a Roth are also tax free making you more money because you will not pay taxes on the growth. One last major factor is just as you pointed, the Bush Tax cuts allows you to pay less in taxes now. So if you're paying less taxes on the income you bring in then you could put more after tax money into a Roth and the tax difference would be less than if the cuts weren't extended. </p><p></p><p>One more thing is when taxes are raised (not if) all that money you pull out of a Roth won't have to be reported with your pension putting you into a higher tax bracket. Perhaps in 20 years anyone making 70k or more will be considered rich, with a Roth you eliminate any worries of how your compounding pension/401k will effect your bracket.</p></blockquote><p></p>
[QUOTE="Jackburton, post: 1003905, member: 34538"] By placing 17k max in Roth 401k vs Traditional you actually put more ( read your tax bracket) into your retirement. All monies grown in a Roth are also tax free making you more money because you will not pay taxes on the growth. One last major factor is just as you pointed, the Bush Tax cuts allows you to pay less in taxes now. So if you're paying less taxes on the income you bring in then you could put more after tax money into a Roth and the tax difference would be less than if the cuts weren't extended. One more thing is when taxes are raised (not if) all that money you pull out of a Roth won't have to be reported with your pension putting you into a higher tax bracket. Perhaps in 20 years anyone making 70k or more will be considered rich, with a Roth you eliminate any worries of how your compounding pension/401k will effect your bracket. [/QUOTE]
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