Traditional Vs Roth

#1

I’m currently maxing out my 401k & this year I tried to do an even split between a traditional 401k, Roth 401k, & Roth IRA.

I know generally since I’m young (25) I should be putting more towards Roth but I also hate how much more taxes are taken off when I lean more towards Roth than traditional :sweat_smile:

It is normal fo feel like you don’t now what to do. Even the smallest things, I over think for days!!

Right now I have 10% Roth 401k
15% traditional 401k
Maxing out my Roth IRA
& maxing out my HSA (I haven’t really been investing in this yet, but I’m maxing it out)!

Any help would be awesome! I’m staying the course and want to feel better about taxes :sweat_smile:

#2

It sounds like you are doing all of the right things! You are investing, staying the course, and being thoughtful about your account types!

There are no right or wrong answers to traditional vs roth. The only way to know for sure would be to know the answers to a number of unknowns (e.g., future tax rates, rate of return, future income). One strategy to follow if you are unsure which is right for you is to diversify between them - which is exactly what you are doing! It is normal to feel like you don’t know what the right answer is because there is NO right answer!! I have used a Roth for the last ten years, but there are plenty of times I wonder if I should have done a traditional!

In your HSA, you have cash in it that you haven’t invested? When you are ready, investing the money can help you take full advantage of the tax deferred growth!