Pre tax vs Roth

Forum|Forum|1 year ago
June 26, 2024
1 reply
2 views

What is the benefit for me to invest in pre tax if I think ill be at a higher tax bracket later Isn't it better to get taxes over with and do the roth entirely?

Ask the Experts - Retirement II - June 2024

mtufaro

Level 7

So the difference between a pre-tax retirement contribution versus a post-tax Roth contribution is when the taxable event occurs. Your second sentence assumes your marginal income tax rate will be higher in the future, so I think you have answered the question already. Whether it is better to pay now or later is a matter of preference. If your preference it to pay taxes now, especially as you feel that your marginal tax rate will be lower, I say go for it. Others want to delay taxation as much as possible, so I would not discourage them either. There is no once size fits all answer here. Since you have a preference for now, please proceed with the Roth.

Thanks again for the question @jad56061

All the best,

Marc

Employee Tax Expert