Should I Change My Traditional 401k to a ROTH 401k

[pipielek]

Do understand that only your portion can be designated as Roth 401(k). If you get any matching from your employer, that employer portion cannot be designated as post-tax/Roth.

Unlike a Roth IRA, there is also RMD for Roth 401(k). You will have to take the money out of Roth 401(k) when you're 70-1/2.

Alternatively, you can contribute non-deductible IRA, and then convert it to a Roth IRA. Or, just wait until you no longer work there and rollover to Roth IRA.
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Another thing to consider, do you live in a income-state-tax free state? If you live in a state with high state income tax, do you pay state tax on your Traditional 401k contribution or not?

If you are in CA and make 200k, that's 33% fed tax and 9.55% CA tax = 42.55%. Ouch....

 

[scagnt83]

Do understand that only your portion can be designated as Roth 401(k). If you get any matching from your employer, that employer portion cannot be designated as post-tax/Roth.

Unlike a Roth IRA, there is also RMD for Roth 401(k). You will have to take the money out of Roth 401(k) when you're 70-1/2.

Alternatively, you can contribute non-deductible IRA, and then convert it to a Roth IRA. Or, just wait until you no longer work there and rollover to Roth IRA.
- - - - - - - - - - - - - - - - - -
Another thing to consider, do you live in a income-state-tax free state? If you live in a state with high state income tax, do you pay state tax on your Traditional 401k contribution or not?

If you are in CA and make 200k, that's 33% fed tax and 9.55% CA tax = 42.55%. Ouch....

Excellent point about the employer contributions, even with the roth there will still be a traditional account.

Nice second post

 

[beachgoer]

Convert it! Taxes are going way up in this country and if you don't plan now, 40%-50% of that 401k will belong to the government when you do retire!

With that type of income, you should be looking at 7-pay indexed life policy for future retirement income also. Make sure you run your illustrations conservatively though!

Best of luck! Convert Now if you can afford it!