Originally Posted by Animorph
Did you say that properly? You want to make Roth contributions when your taxes are low or you have maxed out other tax deductible accounts, which sounds like now for you. If your taxes go up, you should be moving more towards contributing to tax-deductible accounts.
On the contrary, I did say that correctly.
You see, one of the things that holds my income tax down is pre-tax investments (along with property taxes which are high in NJ, and mortgage interest, and the biggest is by far our child tax credit).
As an example: When the legislation was signed into law reducing SS by 2%, I immediately increased my 401k by that amount so that I wouldn't be responsible for paying taxes on the extra 2% of my pay, which would have gone into SS anyway. I didn't "miss it" before, and it was fundamentally going toward a "retirement fund", which is effectively what SS is.
Likewise, I have estimated that my deductions/exemptions will be changing in about 7-8 years, when I will only be able to utilize the standard deduction which will undoubtedly rise by then as it usually does. At that point, I will lower my 401k to company match (at a minimum), and increase my Roth savings, since I would be paying tax on the larger income anyway.
I however was mispoken regarding what I said about "14% of my income is taxed". In fact my total tax for my income (SS, medicare, fed, state) is slightly less than 14% of my gross income.
PS: Sorry for the late reply.
And as always, remember YMMV.