To Roth IRA or bump up 401K?

[myself]

Obviously other folks have been on the fence about this in the past, so I'm just looking for thoughts/advice on the issue.
Decreasing 401K contributions slightly and shifting money over to a Roth seems appealing but then it hits the amount of tax that we would pay.


Due to some changes in the company that I work for, it looks like I'll be able to put another $5,000-$6,000/yr away into retirement.

I paid 2.3% effective Federal taxes last year (I'm in the 25% bracket), and I'm on the line of whether I should just do the Roth IRA (post-tax), or bump my 401K (pre-tax) retirement up. Any suggestion as to how to guide me in which choice to make?
If it helps any, my wife doesn't have a retirement plan in her name as of yet, so I'm leaning in the direction of a Roth IRA for her.
Paying so little Federal taxes is a by-product of having 4 kids and living on a single income.


PS: We're under the IRA income restrictions and haven't hit the 401K cap either. And we wouldn't hit the 401K cap if we put that much away either. The 401K company match is $1/$1 up to 4% ... I'm already putting away 6%.

 

[Carnage]

As a general rule, I always thought it was best to meet your company match and then divert anything else you want to invest into a Roth IRA.

So in your situation, you'd alter your match to the 4% and divert the other 2% to your Roth + anything else you're contributing.

 

[myself]

As a general rule, I always thought it was best to meet your company match and then divert anything else you want to invest into a Roth IRA.

So in your situation, you'd alter your match to the 4% and divert the other 2% to your Roth + anything else you're contributing.

Yeah, I know that's the general rule. I'm pondering whether I want to avoid the taxes now or later. My DW is 39 and I'm wondering if those number of years will be as beneficial putting it into a Roth as opposed to in the pre-tax 401K.