Hello, this is my first post but I have read this board for quite awhile, thanks to all who post on here for taking the time to share your great advice. I had a question concerning 401ks that I thought you guys might be able to help me out with.
My wife and I are both 23 and just graduated from college. She is starting a new job soon and will make ~38k a year. I am going to be working for a startup for a year and will not draw a salary, only options. Next fall I will enter med school and 4 years after that will enter residency (~70k/year with moonlighting) and 4 years after that will enter practice (~300k/year for estimates although I know the future is unpredictable).
My question is, does it make any sense for her to max out her 401k this year and while I am in med school? Once I finish then we will be in a higher tax bracket, and I am sure by then the tax brackets will have gone down and the tax rates will have gone up. Wouldn't it be better to just get the money out in our name now, since on an annual household salary of 40k (med school) 110k (residency) we would pay relatively little in taxes? She thinks it might be better just to defer taxes via the 401k.
Our fixed income in retirement is also likely to put us in the highest bracket.
Do you guys have any input? Thanks!!!
My wife and I are both 23 and just graduated from college. She is starting a new job soon and will make ~38k a year. I am going to be working for a startup for a year and will not draw a salary, only options. Next fall I will enter med school and 4 years after that will enter residency (~70k/year with moonlighting) and 4 years after that will enter practice (~300k/year for estimates although I know the future is unpredictable).
My question is, does it make any sense for her to max out her 401k this year and while I am in med school? Once I finish then we will be in a higher tax bracket, and I am sure by then the tax brackets will have gone down and the tax rates will have gone up. Wouldn't it be better to just get the money out in our name now, since on an annual household salary of 40k (med school) 110k (residency) we would pay relatively little in taxes? She thinks it might be better just to defer taxes via the 401k.
Our fixed income in retirement is also likely to put us in the highest bracket.
Do you guys have any input? Thanks!!!