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Updated almost 3 years ago,

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17
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3
Votes
Tom Seigold
3
Votes |
17
Posts

401k: should I do Roth or traditional in this case?

Tom Seigold
Posted

- Income ~$170k, effective income tax rate is about 27% right now.  Employer offers full 401k match up to 3%, so I'm putting in 3% to get the full match.

- Retiring in about 30-35 years.

- Building a rental portfolio is my goal, like many here.  I'm saving for my first rental now and doing as much research as I can beforehand.  I have roughly $40k/year budgeted right now to spend on down payments, and will be reinvesting whatever my properties make.

I know the typical advice is "go Roth if you plan to make more when you retire than you're making now" - which I do plan to happen, absolutely.

But does that advice change at all when the income you earn is going to be rental income?  I have not claimed rental income on a tax form yet, so I'm not sure how it gets taxed.

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