Vincenzo has a question for you. He says my wife and I make 250 k a year at 26 and I have lost the ability to put money into

a Roth IRA. We have a fully funded emergency fund a Roth 401k and had funded are Roth's. What do you suggest we do now?

What's next?

All right I'm going to give a step one and my step one is going to be in regards to the Roth

401k, so if you want to be saying about your steps two, three, four.

Here's the first thing I want to do to Vincienzo.

I don't know what state that you live in, but I want you to go look at last year's tax return.

Here it is, we just got through tax season, so it's likely you've already filed your tax return.

And I want to see what marginal tax bracket you fell into, both in the federal and the

state side because at

250,000 dollars of household income in most states that have an income tax

there's a really good chance that you're beginning to teeter over that place to where it might make

sense for you to pre-tax 401k contributions instead of Roth contributions.

Our general rule of thumb is if you add up your marginal federal and your

marginal state and it's greater than 30 percent,

the tax benefit today, even at 26 years old, of doing pre-tax contributions, is pretty attractive.

Every dollar I put in saves me 30 cents in taxes.

That's pretty attractive.

Now, if you happen to be in a no income tax date and your taxable income is in such a place

that you're below 25%?

Okay, then Roth 401k makes a lot of sense,

but at that income, I would encourage you to go visit that.

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