Chapter 2 of 5
The 401(k) Question
Andy has been contributing 6% to his Traditional 401(k) to get the match. His marginal rate is 32%. Should he switch to Roth? He models both paths over 18 years — and discovers the answer hinges entirely on one assumption about his future tax rate.
Key Insight
At 32% marginal rate, Traditional wins if retirement rate < 28%. Andy's FIRE plans suggest a low-income retirement — Roth may be better. The model shows a $47k difference in after-tax wealth at retirement.
Model This Scenario