The Ultimate Traditional vs. Roth 401(k) Strategy
The Money with Katie Show
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How to Calculate Your Net Income After Taxes on Your Roth Contributions
You're not going to pay FICA payroll taxes which are 7.65% on these withdrawals and like we mentioned your federal income tax is calculated bottom up so the effective tax rate in retirement on withdrawals is much lower than your marginal tax rate on contributions while working. If two people in a married couple both did this individually then it's kind of like you're paying $4,000 per person. Yes and so whether we're talking about 4% or 8% effective tax rates here it's still a lot lower than paying a 24% marginal tax Rate on a Roth contribution. And if you have a ton of taxable income from another source like real estate investing income a business that you still own
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