Re:Older Americans who live in RVs and drive from one low-wa...
by tavert on Sunday November 12, 2017 @04:10PM
(#15682648)
It'll be more absolute dollar value of growth, but wouldn't be higher in percentage, and taxes are going to come out as some percentage of any money that was put in pre-tax at the time you withdraw.
If you didn't work the entire year or your income was otherwise variable (bonuses or whatever other reason) then it makes more sense than usual to do roth contributions, or rollovers/recharacterization from traditional to roth, in lower-income years. Assuming you can afford to, and want to maximize what you put into tax-advantaged accounts.
The annual contribution limits are also on dollar amount that goes into the account, so if you're maxing out then you can get more out of a roth ira/401k overall. Not all companies offer the choice of roth on their 401k plans, which is a little annoying.
If you didn't work the entire year or your income was otherwise variable (bonuses or whatever other reason) then it makes more sense than usual to do roth contributions, or rollovers/recharacterization from traditional to roth, in lower-income years. Assuming you can afford to, and want to maximize what you put into tax-advantaged accounts.
The annual contribution limits are also on dollar amount that goes into the account, so if you're maxing out then you can get more out of a roth ira/401k overall. Not all companies offer the choice of roth on their 401k plans, which is a little annoying.