401k or Roth 401k ?

[Potassium]

I'm a Canadian citizen resident in the US and currently contributing to a 401k (which includes a small amount of employer matching).

I'm trying to evaluate if I'd be better off keeping the 401k or moving to a Roth 401k. The general consensus seems to be that its better off to move to the Roth if I intend to return to Canada.

However I don't know if I intend to return to Canada - I haven't decided if I will retire there, or in the US, or somewhere else.

Given that I don't know if I will return to Canada, is it possible to evaluate which is better between the 401k and roth 401k? Is there any disadvantage in moving to the roth just in case I return to Canada or retire ouside of the US?


If I do conver to a roth, what happens to the existing 401k? Would the roth be a new entirely separate scheme?

[nelsona]

Either way, you are just starting out and are in a rlatively low tax brcket, and the tax you are giving up will be made up by the tax-free nature of Roth, in my estimation.

Remmweber though, what we are discussing here are your FUTURE CONTRIBUTIONS, you cannot convert your 401(K) contributions (nor the matching), to the Roth portion at this point. You will have 2 baskets in your 401(K) The roth portion and the non-roth, and the plan managers track that for you.

So, moving forward, contribute to your Roth401(k). It will simply become the bigger potion of your total 401(k) portfolio. When you lkeave that company, then you can decide what to do with the 401(k) portion, if you roll the plan into new accounts.

[Potassium]

Thanks. Maybe I should have added a bit more info to be complete. I'm a high rate tax payer and have been contributing so far about 18 months at the full rate (I'm just over 50 so thats about $25000 per year or thereabouts). So will be contributing for another 13-15 years perhaps.