Re:Investing for Geeks
by connoredel on Friday September 16, 2016 @04:20PM
(#12517044)
This is a really good point. Now I'm pissed that I contributed to a Roth earlier in my career.
Another one that no one has mentioned: state income tax. I live in CA but would put a >50% chance that I will live in a lower tax state when I retire. Thus, Traditional > Roth.
If you are going to contribute to a Roth, it is better to do it earlier than not, while your earnings are lower, so at least you have that going for you. It can also make it easier if you ever decide to do a backdoor Roth in the future(for you know, when you have tons of money kicking around after you are contributing the max to your 401k and have your mortgage(s) paid off), since it could be hard to open a Roth account after you are over the income limit.
Your effective tax rate is likely to be much less than your marginal rate.
Also, for anyone interested in financial independence and simple investing with your 401k and IRAs, I'd like to recommend the Stock Series here: http://jlcollinsnh.com/stock-series/