"mike in a track suit"
Non-conforming queer reporting! I LOVE this. The idea that Blaise identified as a dude and a lady gave me a pause--I've never heard anyone articulate their non-binariness that way? But I also hesitate to suggest that there's a One True Genderqueer Identity because wtf do I know? Anyway, BIG TIME WARM FUZZIES. Love this series and love this story.
Welcome back, Mike Dang! The 'fold just isn't the same without you. We broke and decided to haul out the holiday decorations tonight (eeeeeee!). I'm sure we'll do some decor splurging, since all of our Christmases so far have had a $12 budget ($50). We have to do a grocery shop ($100 because Thanksgiving), and we'll probably go see the new Hunger Games ($13 for a matinee). The temperature is supposed to skip up to an almost-seasonally-appropriate 40 degrees on Saturday, so we'll have to take the pup on a big walk while we can ($0). Total: $163
My wife and I downsized to a tiny apartment this year and I've had to unlearn my love of free things in a big way. I'll never turn down something I'll use just because it's branded, but I will definitely turn down a picnic basket that takes up 1 of my 375 square feet and won't be used regularly.
@various percentages of sheep Answers will depend on your goals! Why do you want to contribute more to your 401k? Have you considered investing your after-tax dollars elsewhere? If you want to do a Roth conversion, it's easier to invest directly in a trad IRA and convert to Roth. No need to go through your 401k, unless your employer matches beyond the $17,500 limit.
Wow, I love this. I share Ester's experience: I was shocked to see the faces behind the numbers--but what? why? Everyone I know is an affluent-looking person with a bundle of debt. Amazing what we can know intellectually but not viscerally.
@Christy You're right, but the government and your employer wouldn't cut the numbers up this way. With a trad 401k, they'd do it like this: You make $100k before tax. Your employer scoops out $18k and plops it into your 401k. Your gross, after your contribution, is now $82k. Your tax bill is based off this new number. If your taxes are 30%, $82,000 x .30 = $24,600 is your final tax burden with a traditional 401k. With a roth, they'd do it like this: Since your 401k contributions are after-tax, your tax bill is based off your entire $100k gross income. So your 30% tax bill on $100k is $30,000, compared to the $24,600 you get with a pre-tax contribution. After tax, you net $70,000. Your $18,000 is scooped out of this. In short, you're right that you're out more money (as of today) if you contribute after tax. The only difference is that your employer wouldn't say you're spending $5,400 more on your 401k; they'd say you're paying $5,400 more in taxes this year.
@Christy It doesn't matter if you make more money in the future. It matters how much you make at the moment of saving (i.e, right now when I make an investment) compared to how much you make at the moment you take your money out of the market (i.e., when you're retired and drawing your income from your investments).
@twofish Don’t forget that the other part of this equation is when you’ll need to access your money. I can access after-tax investments without penalty before I'm 59, so even though I'm in a high tax bracket now, I take the hit so I have accessible money if I need it. (I know my tax bill is high now because I planned it that way: I earn $100k+ now, but I only plan to draw $30k/year in retirement, so I'll have a way lighter tax burden then)