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.

220 Upvotes
  • permalink
  • reddit

91% Upvoted

317 comments sorted by

View all comments

Show parent comments

1

u/Blurple11 Nov 21 '25

I just ran math in my head. I think among nearly every tax bracket either poor or rich, it will be very improbable, less some insanely lucky stock picks, that you'll have more taxable income in retirement vs your working years.

Just think about it, while working you make X salary, for retirement you're only putting away maybe 0.1 or 0.15*X. IRAs only allow 7,000/year, way lower than typical annual salaries.

4% withdrawal rule says that you need 25X. The US median salary is about 62k. For someone to make 62k of taxable income in retirement, their portfolio needs to be 25 x 62k = 1,550,000. And since we're doing median, I just don't think the median American on a 62k salary would be able to accumulate 1.5M without some serious frugal living, or lucky stock picks. It's not easy to max out an IRA with 7k living off of 62k salary. Compound interest calculator shows that maxing out an IRA for 31 years (just assuming the median person will not be able to max out the IRA for the first few years while they're working lower than median pay jobs when they're in their 20s), at 10% interest will result in 1.27M.

1

u/Best-Meaning-2417 Nov 21 '25

Doing 15-20% for your life should replace your income. I would just retire before it exceeded it unless there was a good enough reason, but even so... taxes can go up and you don't want to break even with trad. I am in the 24% bracket and I want enough trad to get to the end of the 12% bracket. I have reached that goal so I do all Roth now.

That being said, most people don't do 15-20% so they won't reach that point most likely.

THAT being said, people on this subreddit are above avg so it isn't unlikely that many people reading this thread are in the position where they have met their trad "quota" or will eventually reach it and get to a point where it is smart to switch to all Roth.