The Ultimate Traditional vs. Roth 401(k) Strategy
The Money with Katie Show
00:00
The Impact of Payroll Taxes on Your Income
We pay FICA taxes on our contributions on both the pre-tax and Roth options but we don't pay it on the distributions so its net effect truly is zero. It's still impactful because you feel like your income is about 8% lower than it actually is which skews how much income you're assuming you're gonna need later to sustain the same lifestyle. Your entire paycheck gets taxed with these payroll taxes up to a hundred and sixty thousand two hundred dollars in 2023 where your social security liability tops out.
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