Personal Investments • Roth 401k in a high tax year?

Hello,

In discussions with a financial planner, it was advised that I might consider using my companies Roth 401k option. Up to this point, I have only contributed to the traditional IRA. (note..there is no match)

In consideration of this, I was thinking about starting 2025 by contributing to the Roth 401k.

However, my company stock will be "becoming" a taxable event upon grant of some RSUs in 2025. These RSUs will present another $290k onto my earnings for 2025. So that event, plus my and wifes regulary salary/income will put us around $580K....which looks to be an effective Tax Rate of 35%.

Now, i believe that after 2025, things may slow down to the 24% bracket.

GIven all this, would there still remain any reason to go with the Roth 401k anyway? My thinking is that I would be investing in Roth401k and taking a bigger tax haircut that if I did the traditional 401k, and jsut took the money out in retirement at say...a 22% effective tax rate.

Am i thinking about this correctly??

Statistics: Posted by rcmx — Fri Dec 20, 2024 11:49 am — Replies 0 — Views 12

---