It took me 2 years of researching, to try and put all these numbers together (with no previous financial literacy education..... now taking classes), to understand the now and how it will turn out later...... and he made it so easy, explained it all in 30 minutes with demo's & visuals, nice! He's awesome!
In a roth, you pay fed, state and local taxes...when you contribute. In traditional depending on where you live and where you plan to retire.. You can easily avoid state taxes by moving or if you live in a tax-friendly state you won't have to pay the state tax.. Ie: I live in New York.. and there is no state tax a traditional tsp for retirees.. so technically my taxes will be lower..
That would be great but unfortunately you're wrong on the withdrawal part. Of course you have to pay state tax on a traditional IRA or 401K distribution. You can move to a no tax state to avoid it. But you avoided paying it when you contributed so you have to pay it when you withdrawal if you live in a state with income tax
@CessnaPilot99 that's what I was talking about you can move... also many states are state tax friendly to retires.. I live in Nys. No state tax no Tsp..
@@Rshen11 oh I didn't know that's what you were talking about moving. Your comment still says you can avoid taxes when you withdraw with no reference to moving. You can understand the confusion If you're playing on retiring outside of New York State and are in a higher tax bracket Roth doesn't really make sense
@CessnaPilot99 yes I'm sorry I didn't explain it well.. I changed it.. also if live in a state with state taxes.. but you plan on retiring In a state with no state taxes.. the traditional is prob better.. It all depends where you want to live and where you want to retire..
I live in Nys.. i do traditional tsp because i avoid state taxes when i contribute.. and because Nys is retiree friendly.. they dont state tax Tsp in withdrawal.. or i can move to a state with no state tax.. So my taxes will be lower in the future then it is now particularly becauawe i wont be payig state taxes..
Currently doing Non Roth... I have my Income tax withholding set single, no dependents, but am married with kids, so would I be "over taxed" if switching contributions to Roth? Or will that diffence come back on IRS Tax Return (like it does Currently)?
