Originally Posted By: SVTCobra
Originally Posted By: Brybo86
100% Roth over traditional.
Pay a 25% tax on 200k in contributions -Roth
Pay a 15% tax on 1 million+ in growth in 30 years-trad
Roth 50k in taxes vs trad 150k taxes
Also if you are maxing 401k/hsa/trad ira your RMD at age 85 is going to be mind-boggling like many hundred thousands of dollars.
I would do Roth, no RMD , ever.
Tax free GROWTH, which is going to be the vast majority of the accounts value
Not saying your incorrect but my math worked out differently. You will pay a lot more in taxes in retirement but the idea is that since you aren't paying taxes up front you can invest more, so assuming everything is equal then you will have more money to begin with. So yes you are paying more taxes at the end, but avoiding the taxes up front it all comes out in the wash.
What I found makes a huge difference is that a lot of people have their retirement planned out to only pull out so much per year so they aren't in a higher tax bracket. When something goes wrong (medical), you want to buy a house, start a business, etc. then large withdrawals puts you in a really high tax bracket negating some savings (a lot depending on withdrawal amount) by doing pre-tax to begin with.
You would need to add a lot more to pre tax to equal Roth.
Basically 25%, or your tax rate.
Unless you actually do that investing in Roth is essentially like investing 25% more money