401K-what would you do?

[rjet]

We have changed 401ks at work.
My company matches 5% dollar for dollar and I can contribute up to 15% up to $15,500/year.
The new plan is through fidelity and has a roth 401k as part of the options. I am considering using the company match and 5% of my money to throw into the roth 401k (which acts like a regular roth IRA except you can throw more than 6k in it a year), and throw the remainder of my money in the traditional 401k for yearly tax breaks.

What would you do??

I worry about 401k and taxes in the future cause our beloved govt can change taxes laws when they want. Course they probably can on the roth also.

[Stins]

If you can afford to pay the taxes on it then the Roth makes more since because of its tax free growth which will result into alot more money years down the road.

[kramer]

Absolutely fund the ROTH 401k. Generally its recommended that you contribute enough to get the match. Take the rest and open your own ROTH (assuming you dont make too much). You will get more investment choices to pick from and you are in charge instead of having to use what your company/Fidelity give you. Some plans will have more investment choices than you can shake a stick at.........some will not. My best friend works for a very large company that has their plan with Fidelity and they have 12 choices.....12. Thats ridiculous. You can do better on your own and have access to more funds and choices.

[glen]

Max your roth out and invest as much as you can after that. Goto a Fidelity office dn speak with an investment advisor and tell them what your goals are and go from there.

[knucklehead]

I'm no expert, but I think you got it figured out. Maximize company match and Roth.

[Archermike2605]

Max your roth out and invest as much as you can after that

[Snakelover]

Part of the equation is whether you expect to be in a higher or lower tax bracket after retirement compared to where you are now. Generally, if you expect to be in a higher bracket, you want the Roth. But if you expect to retire at a lower bracket, you want the regular. I say "generally," because there are other factors to consider. Personally, I wouldn't do a mixture of the two. I would pick one or the other and stick with it. Mixing the two strategies doesn't make sense to me, because there really is only one BEST choice for any individual. It's up to you to figure out which choice that is in your circumstances. Best of luck.

[keep]

Part of the equation is whether you expect to be in a higher or lower tax bracket after retirement compared to where you are now. Generally, if you expect to be in a higher bracket, you want the Roth. But if you expect to retire at a lower bracket, you want the regular. I say "generally," because there are other factors to consider. Personally, I wouldn't do a mixture of the two. I would pick one or the other and stick with it. Mixing the two strategies doesn't make sense to me, because there really is only one BEST choice for any individual. It's up to you to figure out which choice that is in your circumstances. Best of luck.

What he said.

[Throwin Darts]

Snakelover is right on. If I had the option here at my job I would max out a Roth 401K over a tradtional 401K.

[Shane]

The company match portion will likely not be eligible for the Roth account, but you can put your own salary deferrals into the Roth. The younger you are, the better that option is.

[KSHogman]

Max The Roth Brother!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[TENRMORE]

This is what dave says...
What we teach is to invest 15 percent of your pre-tax income for retirement. You should start with contributions to the 401(k), putting in just enough to get the company match, then max out the Roth IRA. If you get no company match, then start retirement investing with the Roth. The reason is that a Roth IRA grows tax-free and is a better option than the 401(k), which grows tax-deferred. It's a three step process; first contribute what your 401(k) matches, then the Roth, then go back to the 401(k) and contribute until you hit 15 percent. Don't get too enamored with the full-service investing stuff ... just do basic mutual funds.

[Bily Lovec]

isnt there a limit on your income for having a roth ?
as in, if you make over a certain amount, you cant add to a roth ?

[SMUMan02]

isnt there a limit on your income for having a roth ?
as in, if you make over a certain amount, you cant add to a roth ?

yes.

[predatorsniper]

Max out both if you can afford it.

predatorsniper