Financial advisors and CPAs often bat around terms such as "workaround Roth IRA" or "Backdoor Roth IRA" referring to a controversial technique wondering "is this even legal?"
Roth VS. Traditional 401(k) - Calculators and Behavior
If you’ve been reading my blog you’d know that I think Roth savings are a great opportunity for many, many investors. If you plan to max out your contributions this year you can effective save more by saving in a Roth, whether an IRA or 401(k). Recently I’ve run across a common calculator available on the internet. When a user puts in their details it is supposed to help you compare saving in a Roth 401(k) or traditional 401(k). However, the default assumption is that when you decide how much to contribute you will reduce the amount you will be saving in a Roth by the amount of taxes you would have to pay. That seems like something a rational investor would do, right?
