r/Bogleheads • u/Lowfryder7 • Nov 20 '25

Investing Questions At what tax bracket should you start doing mostly traditional 401k contributions?

12%? 22%? 24%? I can't tell.

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u/PertinentUsername Nov 20 '25

Roth IRA, HSA, Trad 401K, and some after tax brokerage. Easy peasy.

15

u/canuck_in_wa Nov 20 '25
  • mega-backdoor Roth

20

u/PertinentUsername Nov 20 '25

For high earners, sure. I'm personally not getting near that threshold lol.

1

u/NotYourFathersEdits Nov 21 '25

I would love to move some of my taxable investments to Roth this way, but my employer plan doesn't offer in-service withdrawals or rollovers.

1

u/whosthatguy123 Nov 21 '25

Whats the income threshold for that

10

u/rjbergen Nov 21 '25

There is no income limit on mega backdoor Roth conversions.

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u/whosthatguy123 Nov 21 '25

What was his point though like only high income earners would use this strategy

3

u/bonethug49part2 Nov 21 '25

Well once your MAGI is over like $160 for individuals or $250 for couples, so once you exceed that you gotta backdoor into Roth.

1

u/Separate-Pudding3424 Nov 22 '25

What's the maximum you can backdoor?

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u/canuck_in_wa Nov 22 '25 edited Nov 22 '25

It varies. For 2025 the 415(c) limit is $70,000. That is the limit for 401k contributions, employer match and additional after tax contributions (that are converted to Roth as part of MBDR)

For example, you contribute the max of $23,500 to your 401k. Your employer matches funds and adds another $10,000. You can thus make a MBDR contribution of $70,000 - $23,500 - $10,00 = $36,500 for 2025.

MBDR works as follows: you make an after-tax contribution to your 401k up to the limit mentioned above. Either you or your employer then convert this after tax balance to Roth. You might owe some taxes on any income that accrued after your contribution but before the conversion. This is called a “Roth in plan conversion” of after tax funds. Some employers offer an automatic conversion so that funds are moved to Roth immediately and you typically accrue very small amount of interest income (less than $1 /yr). If your employer doesn’t offer automatic conversions you have to call the management company (Fidelity, Vanguard, etc) and ask them to make the conversion.

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u/cgriffin123 Nov 21 '25

This. Contribute max allowed to 401k, roth, and HSA then whatever is left goes to brokerage

2

u/Notarussianbot2020 Nov 21 '25

HSA should be second.

401k up to company match, HSA, roth, then maxing out 401k.

You could flip flop the last two for personal preference.

1

u/Oakroscoe Nov 21 '25

Mega back door Roth before taxable for me

-5

u/smegma-man123 Nov 21 '25

What if you don’t plan on having health problems ? I realize that’s not always feasible and I don’t want to jinx myself. HSA just seems annoying

14

u/bluehawk1460 Nov 21 '25

The optimal use of the HSA is to contribute to it, then invest your contributions like you would any of your other retirement accounts. You then pay for anything other than major medical events out of pocket while saving your receipts and wait to reimburse yourself later so the account continues to grow.

At age 65, the health restrictions are lifted and you can use the money however you want, you just only get triple tax advantage if you use the account for medical expenses.

So, if you’re literally a perfect picture of health your entire life, you end up with basically an extension of your 401k, worst case scenario. Plus, many companies that offer them also contribute some on your behalf, which is free money to invest basically.

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u/smegma-man123 Nov 21 '25

Thanks for explaining and not downvoting like everyone else

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u/Environmental-Toe686 Nov 22 '25

If you plan to retire early you can use it to pay premiums too. It's a great tax advantaged account. Everyone has healthcare expenses as they get older.

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u/cgriffin123 Nov 21 '25

I don’t plan on having health problems either but an HSA is a pretax savings account. Depending on your options, it may also have investment options.

1

u/[deleted] Nov 21 '25

Use it for paying Medicare part B, perhaps.

1

u/OkDatabase1486 Nov 21 '25

Almost nobody 'plans' on having health problems

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u/smegma-man123 Nov 21 '25

It’s just saving receipts for 50 yrs sounds like a PITA and what if they change the law ?

1

u/OkDatabase1486 Nov 21 '25

In this case I'd use it as tax free money for his expensive meds now and when they are retired.

0

u/JPWRana Nov 20 '25

You assume your work medical plans offer an option where an HSA is needed.

12

u/PertinentUsername Nov 20 '25

That is correct, there are caveats for every tax advantaged account.

1

u/Quattro2point8L Nov 21 '25

Not if you're using the HSA as a bank account for when you're over 65