Roth vs Traditional 401k Contributions - The White Coat Investor - Basics

If you’re a resident or military member, maximize Roth contributions.

If you’re in a low-income year for any reason, such as a sabbatical, use Roth contributions.

Use a personal and spousal backdoor Roth IRA each year. That way, even if you choose to make all tax-deferred 401(k) contributions, you’re still getting some money into Roth accounts.

If you can pay the tax with money in a taxable account and expect to work part time or retire in your 50s, then consider making Roth conversions during those years before receiving Social Security or a pension to “fill up the lower brackets.”

If you save and invest more than 20 percent of your gross income, lean a little more toward Roth investments. If you save and invest less, use tax-deferred accounts preferentially.

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00:00 Roth 401(k) Contributions
00:18 Roth Conversions
00:27 Traditional 401(k) Contributions

[anderacpharmd]

Why lean towards Roth investments if saving 20% or more of gross income? What if you're still getting good tax write-offs with tax deferred accounts and are in an upper income tax bracket, does leaning more towards Roth investments still apply?