paycheck

[Jim in CT]

Originally Posted by fishbones

I started dumping more into my 401K and HSA account to protect it from being taxed, but it still sucks.

Remember, if you put money into a pre-tax 401(k), you don't avoid taxes, you delay them. The trick is to pay your taxes when the rates are lower. I put all my money into an afetr-tax (Roth) 401(k). I prefer to my taxes today. Why? Because our debt will be $20 trillion when Obama is finally gone. Figure at least another $40 trillion to provide Social Security and Medicare benefits to the Baby Boomers.

I can't see how taxes are not significantly higher in 20 years than they are today. Therefore it's better to pay the taxes today, at a lower rate.

Obviously we'll all be in different brackets in the future, lots of moving pieces...but delaying your tax withholding until you cash out your 401(k), isn't always in your best interests.

[Piscator]

Originally Posted by Jim in CT

Remember, if you put money into a pre-tax 401(k), you don't avoid taxes, you delay them. The trick is to pay your taxes when the rates are lower. I put all my money into an afetr-tax (Roth) 401(k). I prefer to my taxes today.

I agree but unfortunately our Government doesn’t allow everyone to have a Roth…………you know, all the rich millionaires………

If you aren’t eligible for a Roth, you could put taxed pay into a 401K that will not be taxed later (the gains will be taxed though).

[PRBuzz]

Originally Posted by Jim in CT

Remember, if you put money into a pre-tax 401(k), you don't avoid taxes, you delay them. The trick is to pay your taxes when the rates are lower. I put all my money into an afetr-tax (Roth) 401(k). I prefer to my taxes today. Why? Because our debt will be $20 trillion when Obama is finally gone. Figure at least another $40 trillion to provide Social Security and Medicare benefits to the Baby Boomers.

I can't see how taxes are not significantly higher in 20 years than they are today. Therefore it's better to pay the taxes today, at a lower rate.

Obviously we'll all be in different brackets in the future, lots of moving pieces...but delaying your tax withholding until you cash out your 401(k), isn't always in your best interests.

Not just tax rate but income bracket: delaying taxes until retirement and no long drawing a salary, just SS.