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.
- 1Contributing to both account types to maintain financial flexibility
- 2Following rules of thumb based on age or tax brackets
- 3waiting until retirement to do conversions in lower tax brackets
- 4using retirement account distribution calculators and rules of thumb
- 5maintaining a mix of traditional and Roth accounts to manually manage future tax brackets
- 6splitting contributions evenly between pre-tax and roth
- 7relying on tax refunds as an indicator of savings performance
- 8Using employer matching contributions
- 9Maxing out Roth IRAs
- 10Contributing a fixed percentage of a paycheck to a traditional 457(b)
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“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 ↗
“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 ↗
Where this came up
People with this problem also raised
- 5Should I invest extra savings in a brokerage account or a Roth IRA?
- 10What funds and allocations should I pick for a new Roth IRA?
- 7Should I max my IRA or 401k first after a raise?
- 2Keep defined benefit pension or roll over to an IRA?
- 4Should I lower my 401k to pay off a mortgage faster?
- 3How to handle 401(k) contributions and employer matches when changing jobs