401k or roth 401k?

[vital]

my company is going to offer both.. 401k is 50% matching up to 6%... i think it'll be the same w/ the roth 401k.. I'm under 30 so should I switch to roth 401k or contribute to both?

 

[Capt Caveman]

If both match, then I would do both up to at least the match. Though it's more than likely combined. In that case, i would go Roth 401k.

 

[newb111]

The simple answer is this. If you think your tax rate in the future will be higher than it is now, go with a regular 401k/IRA. If you think it will be lower, go with the Roth.

A healthy mix between them to balance your tax liability in retirement can be a good idea as well.

In reference to Capt Caveman, the limit for 401k is for both regular and Roth combined.

 

[OulOat]

Originally posted by: newb111
The simple answer is this. If you think your tax rate in the future will be higher than it is now, go with a regular 401k/IRA. If you think it will be lower, go with the Roth.

Why would you want to pay higher taxes in the future? You should go with Roth if you think the amount of taxes you will pay (salary/tax bracket) will be higher when you retired vs your current salary.

 

[senseamp]

Depends on your tax bracket.
I am a single renter making low six figures so I get raped on taxes, so for me regular 401k is better.
Of course it's entirely possible that when I am retired in 40 years we'll have a more European style tax system and I will regret that decision.
We had a lecture on that just the other day at work. One nice thing about a Roth 401k is that you aren't required to start spending it at 70 if you make it a standalone IRA then and pass it on tax free.