So this will be the first year I anticipate making some kind of withdrawal from my portfolio as I will still have a little earned income coming in. Based on running a number of calculators, I ideally need to do Roth conversions filling up the 24% bracket annually until RMDs (currently 57). In past years, my income had me in the top tax bracket so I always maxed out both mine and DWs 401Ks (she is my only employee). However, now that I expect my earned income to fall in the 24% bracket and knowing I want to start Roth conversions filling up the 24% bracket, is there any advantage to maxing out our 401K contributions this year? My knee jerk has always been to max out contributions every year, but maybe not now? As I scratch my head, it seems like I get to the same net net whether I do or don't? What am I missing here?
First Year Roth Conversion & 401K Contribution... Does it Make any Sense?
- Thread starter DawgMan
- Start date
TheWizard
Thinks s/he gets paid by the post
Doing 401(k) contributions and Roth conversions in the same year effectively allows you to shovel more into your Roth accounts when working with a limit like the top of the 24% bracket.
So sure, go ahead with that...
So sure, go ahead with that...
Good point! Did not think of that way. I suppose I effectively get to add the 401k contribution amount equivalent to my Roth conversion and pay the same amount of taxes.
Just made me wonder.... As her Employer, could you match her 401K at 100%?
Been maxing her out with catch up and Profit Sharing. Between the 2 of us the math adds up to just under$100K. Depending on earned income this year, it may be less..
