jIMOh
Thinks s/he gets paid by the post
I am 41 yo and about 15 years from FIRE. I can afford to save 25% of my income pre-tax. This would put me well over the 401k contribution limit for 2014. This is first year I could ever save this much.
I am in a situation where I am maxing out a traditional 401k
I have a Roth 401k option
I am brainstorming scenarios
a) max out pre-tax 401k and keep my taxes down, put extra money into savings (taxable)
b) lower pre-tax 401k such that Roth 401k is maxed and part of 25% savings rate went to taxes, part went to savings
c) part of my pay is variable, so while I can't predict tax brackets year over year, finding the sweet spot where I use traditional 401k to lower tax bracket, then Roth the rest of the way
If I cap out on my variable pay, I am looking at earning about $150k
My living expenses hover between $40-$75k. I have twin 6 year olds, paid for house and will need a new car within 24-36 months.
I am asking for opinions on scenarios, or other ideas.
I am in a situation where I am maxing out a traditional 401k
I have a Roth 401k option
I am brainstorming scenarios
a) max out pre-tax 401k and keep my taxes down, put extra money into savings (taxable)
b) lower pre-tax 401k such that Roth 401k is maxed and part of 25% savings rate went to taxes, part went to savings
c) part of my pay is variable, so while I can't predict tax brackets year over year, finding the sweet spot where I use traditional 401k to lower tax bracket, then Roth the rest of the way
If I cap out on my variable pay, I am looking at earning about $150k
My living expenses hover between $40-$75k. I have twin 6 year olds, paid for house and will need a new car within 24-36 months.
I am asking for opinions on scenarios, or other ideas.