Hi All!
Seeking advice from the collective hive. I am 37 and work in sales which can lead to some positive volatility in good years. This year I am likely to earn double my target/"on plan" commission which is going to bump my tax bracket into the 24% bucket. I am trying to decide if I should pivot to traditional 401K contributions vs Roth 401K contributions. Right now I do Roth mainly because it is one less step I have to take in calculating how much I actually have saved for retirement and it's what I started doing when I made less at the beginning of my career. A few other notes:
- I don't ever anticipate being under the 22% tax bracket (even in retirement) but technically its possible with good accounting for investment properties and managing retirement withdrawals effectively.
- In 2-3 years, my wife will return to the workforce and make it much more likely to regularly be pushing into that 24% tax bracket.
-I plan on "retiring" at the earliest by 58, but plan to earn income from real estate or other fixed asset investments well into being retired.
- our cash flow is in a good spot regardless of Roth v Traditional so I would probably uptick my % if I switched to Traditional
If I am missing any other factors, please let me know. I would love to hear any suggestions on Roth v. Traditional both in "spike years" or more generally YoY. Also would love for anyone to share experiences with retirement saving when a large chunk of income is coming from a highly variable source like commission or bonus.
Thanks!
RK
Seeking advice from the collective hive. I am 37 and work in sales which can lead to some positive volatility in good years. This year I am likely to earn double my target/"on plan" commission which is going to bump my tax bracket into the 24% bucket. I am trying to decide if I should pivot to traditional 401K contributions vs Roth 401K contributions. Right now I do Roth mainly because it is one less step I have to take in calculating how much I actually have saved for retirement and it's what I started doing when I made less at the beginning of my career. A few other notes:
- I don't ever anticipate being under the 22% tax bracket (even in retirement) but technically its possible with good accounting for investment properties and managing retirement withdrawals effectively.
- In 2-3 years, my wife will return to the workforce and make it much more likely to regularly be pushing into that 24% tax bracket.
-I plan on "retiring" at the earliest by 58, but plan to earn income from real estate or other fixed asset investments well into being retired.
- our cash flow is in a good spot regardless of Roth v Traditional so I would probably uptick my % if I switched to Traditional
If I am missing any other factors, please let me know. I would love to hear any suggestions on Roth v. Traditional both in "spike years" or more generally YoY. Also would love for anyone to share experiences with retirement saving when a large chunk of income is coming from a highly variable source like commission or bonus.
Thanks!
RK
Statistics: Posted by RustyK — Wed May 22, 2024 10:50 am — Replies 5 — Views 324