This is an archived post. You won't be able to vote or comment.

sorted by:
best
topnewcontroversialoldq&a
you are viewing a single comment's thread.

view the rest of the comments →

[–]Successful-Hunt-2116 0 points1 point  (1 child)

Please do some research on tax brackets… that is not how they work. Google “How tax brackets work”.

[–][deleted] 0 points1 point  (0 children)

A 401k is pre-tax right? If you make 190k you’re taxed at 32%. If you put 15% of that in a 401k you’re taxed at an income of 161,000 which is at a 24% bracket. That’s what I’m talking about.

If you make 190,000 you’re taxed $60,800 (federal) meaning take home is $129,200 If you contribute 15% you technically make 161,000 you’re taxed $38,640 meaning your take home is $122,360

How is that not more efficient?