Should I do a Roth conversion or stick to traditional 401k?
Deciding whether to split contributions or switch entirely to Roth accounts comes down to comparing your current tax bracket with what you expect to pay in retirement. People trying to figure this out often want a clear calculation to determine if paying taxes upfront now will save them from higher conversion taxes or required minimum distributions later.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1Contributing to both account types to maintain financial flexibilityDid this help you?
- 2Following rules of thumb based on age or tax bracketsDid this help you?
- 3waiting until retirement to do conversions in lower tax bracketsDid this help you?
- 4using retirement account distribution calculators and rules of thumbDid this help you?
- 5maintaining a mix of traditional and Roth accounts to manually manage future tax bracketsDid this help you?
- 6splitting contributions evenly between pre-tax and rothDid this help you?
- 7relying on tax refunds as an indicator of savings performanceDid this help you?
- 8Using employer matching contributionsDid this help you?
- 9Maxing out Roth IRAsDid this help you?
- 10Contributing a fixed percentage of a paycheck to a traditional 457(b)Did this help you?
- 11Maxing out a Roth IRA first before contributing to a 401kDid this help you?
- 12Using a taxable brokerage account or high-yield savings account instead of locking funds in a retirement accountDid this help you?
- 13Increase pretax contributions through eligible traditional IRA and 403b deductions to decrease monthly student loan payments, dealing with retirement taxes later and switching strategies post-forgiveness.Did this help you?
- 14Maintain post-tax focused contributions, pay more on student loans, and roll over pre-tax to post-tax accounts after reaching forgiveness.Did this help you?
- 15consulting wiki guides on Roth vs. TraditionalDid this help you?
- 16asking community members for guidance on expected retirement incomeDid this help you?
- 17Treating the HSA as a retirement asset rather than using it for medical expenses prior to retirementDid this help you?
- 18Consulting forum wikis and FAQs for account selection guidanceDid this help you?
- 19Contributing the minimum amount to get the company match and putting the rest into a Roth IRA.Did this help you?
- 20staggering the conversion across multiple years to manage tax bracketsDid this help you?
- 21leaving the account as isDid this help you?
- 22investing the tax amount separatelyDid this help you?
- 23Continuing with the current mix of traditional and Roth contributionsDid this help you?
- 24Switching to Roth contributions for a set period before retirement and reassessingDid this help you?
- 25Planning for Roth conversions during early retirement years before social security and RMDs beginDid this help you?
- 26Putting more funds into taxable brokerage accounts to bridge early retirement yearsDid this help you?
- 27consulting with financial advisorsDid this help you?
- 28funding a spouse's traditional IRADid this help you?
- 29relying solely on pre-tax 401k contributionsDid this help you?
- 30splitting contributions between both accounts blindlyDid this help you?
- 31going all in on Roth based on current low tax bracket and expected future income increasesDid this help you?
- 32continuing to contribute exclusively to Roth accountsDid this help you?
- 33splitting contributions between Roth and traditional accountsDid this help you?
- 34splitting yearly contributions between both traditional and roth accountsDid this help you?
- 35contributing enough to get the company match and then maxing out a roth iraDid this help you?
- 36using traditional 401(k) over roth 401(k) after maxing out a roth ira to diversify tax protectionDid this help you?
- 37Contributing entirely to a workplace 401k beyond the employer matchDid this help you?
- 38Splitting retirement savings across multiple compounding accountsDid this help you?
- 39Contributing post-tax dollars into a single target date fund within a deferred compensation account.Did this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“Been ignoring IRA's and going heavy on my 401k, should I reassess?”source ↗
“I'm most likely leaving a lot of money on the table by not looking into IRA's for the extra 5-7% I've been adding to the 401k.”source ↗
“I’m not sure if I should stick with the traditional 401k or opt for the Roth.”source ↗
“I’m 55 and contribute to both 401k and Roth 401k currently; I’m wondering if I should go all in on Roth 401k to minimize potential roth conversions later on.”source ↗
“I’m wondering if a Roth conversion would be a good choice and how to decide that. If someone could show me an equation/set of equations I could use, that would be super helpful.”source ↗
“I’m still learning about Roth conversions and not yet confident in my understanding of them.”source ↗
“Is contributing to the 401k worth it if my employer doesn't match it?”source ↗
“Would it be smarter for me to open up a Roth IRA instead?”source ↗
“Which would be the wise move; pre-tax or roth for the 457(b)?”source ↗
“I was just hoping to get some advice/a better understanding about how I should be diving these investments.”source ↗
“Since I’m in a low tax bracket, does it even pay to invest anything into the traditional? Should I only be focusing on the Roth for now?”source ↗
“I don’t really understand the tax advantage stuff all I know is that I was told 5 years ago when I started this job to contribute to the 457b.”source ↗
“Please enlighten me on if I’m doing this alright or if I need to change my strategy.”source ↗
“would it ever make sense to contribute to the traditional 457(b) before the Roth IRAs?”source ↗
“Is it better to just do the full 10% in my 401k or to do 6% (company match) in 401k and the remaining 4% into the company Roth?”source ↗
“I'm having a bit of a dilemma on whether to contribute to pretax or post tax retirement plans.”source ↗
“Pretax would lower my AGI and in turn lower my student loan payment, but given that I should have a healthy pension at retirement, I don't think there is going to be much change in my tax bracket at retirement, and it may be higher than my current rate.”source ↗
“I am late in my retirement strategies since I was in grad school for so long, and didn't have much financial literacy in my younger days.”source ↗
“Should I convert a $50,000 traditional IRA account to a Roth IRA to save in the future? Am in the 25% tax bracket. Or should I just leave as is.”source ↗
“It would cost me around $13,000 in takes to convert. Could do and keep total amount moving forward. Did not know if my heirs would be better off if I converted to Roth.”source ↗
“to the extent you can get it into a roth, I would do it. I am speaking from the other side with over $3m in traditional IRAs and only $200K in a roth - in about 6 years the RMDs are gonna hit hard.”source ↗
“I’m wondering whether I should use a Roth 401(k) or traditional 401(k) for the portion of my income in the 22% federal tax bracket. Should I take the traditional deduction at 22%, or wait until I’m in the 24% bracket to prioritize traditional contributions?”source ↗
“I don't actually know which would compound more if I'm not starting both funds at the same time.”source ↗
“I want to diversify a bit. Establish different buckets of money.”source ↗
“Which leads me to believe I should do the pre-tax 457 now then flip-flop everything when ineligible for Roth without the 457.”source ↗
“Should I max my HSA (up to $8550 as I am married) and put 5% into my Roth or just invest the same sum of money into the Roth account?”source ↗
“Should I switch entirely to after-tax contributions (Roth 401k)? Or stay the course with the mix of traditional and Roth?”source ↗
“All this being said, I started to wonder whether I am contributing too heavily towards the traditional pre-tax account, potentially subjecting myself to RMDs later in retirement.”source ↗
“Tell me if I'm off base and should follow the advice of funding a Roth IRA.”source ↗
“I have maxed out my traditional 401K with standard and catch-up, so now I want to fund an IRA.”source ↗
“Thinking of switch my 401k contributions from Roth to Traditional, are my instincts here correct?”source ↗
“After looking into some of the recent income tax increases on our ballots this November, I am beginning to question our strategy of contributing only to our Roth.”source ↗
“Anyways, seems like it’s smart to go traditional for our contributions right?”source ↗
Where this came up
People with this problem also raised
- 14Should I invest extra savings in a brokerage account or a Roth IRA?
- 32What funds and allocations should I pick for a new Roth IRA?
- 3Pension vs 401k: how to choose when starting a new job?
- 15Should I max my IRA or 401k first after a raise?
- 16Keep defined benefit pension or roll over to an IRA?
- 6Should I lower my 401k to pay off a mortgage faster?