401k and Roth

[OH_Ranger]

How do you guys split your investment?
I was doing 8% of income 401k and 2% Roth.

[boneil]

Personally, I would only invest as much into the 401k to get the max match from employer contributions. Everything else into a roth or regular brokerage account.

[Kskeet]

100% agree with boneil. Investment choices are so limited in 401K. I get the match from my employer and then use Roth/brokerage where I have way more choices.

[Charles Prestridge]

Some of my thoughts (much, much less sophisticated than most here)

1. Weigh current tax burden (rate) vs best-thinking retirement tax burden. Pay less taxes now on 401K vs no taxes on Roth growth in Retirement.

2. Maximum amount you can contribute to a Roth per year. Contribution/income limits.

3. Does your company offer 401k Roth contributions? Contribution limit will be higher with a 401K roth (I think)

4. Your personal schedule/habits. Is it easier and more likely to happen saving in 401K, vs funding a Roth account outside of work automatic payroll deduction.

5. In an emergency, you can withdraw Roth contributions (not gains).

Best Wishes.

[TexomaDan]

A Roth is only advantageous if you will be in a HIGHER tax bracket when you need to withdraw. This can easily occur when taking SS and RMDs. But, if not, you can pay more taxes to go to Roth now.

[apenland01]

I currently do 6% in the regular 401k, which is the match percent and then 4% to 401k Roth. I am a believer that we cannot tell the future, so I have to protect using the 401k Roth which is defensive...

[davidsa]

Most of the 401k's that I've seen appear to have a number of index funds like a large cap fund that roughly tracks the S&P500. up until you think of retirement within 5 years, this is fine with me. The tax guessing game when you are 30 is tough. I was able to max out both so did not overthink it. Now that I'm nearing retirement, the tax free nature of roth at a federal level has appeal

[Orion922]

I do my own investing but I recommend spending a one time fee with an investment advisor. He or she can guide you for your goals. There are so many decisions between ROTH or traditional within an investment only you can decide with a professional. Compound interest is key and max what you can. Couple side notes I do.

I have a gold purchase plan monthly. Up to you how much if you choose.
I highly recommend investing monthly for the ETF VOO. https://investor.vanguard.com/invest.../profile/vfiax. You can purchase it with any investment site. The expense ratio is next to nothing.
Bond market is hot and might want to think about that.

[apenland01]

If you have access to a Roth 401k, you need to use it. It doesn't have annual income restrictions and it has a much higher maximum than a standard Roth...