Con_Alma;838935 wrote:Depends on the unknown future of tax rates.
If you're eligible for a Roth you're only tying up your earnings compared to the brokerage account. There's ultimate flexibility in the brokerage account but the potential for annual taxation with dividends, yields and sometimes short term cap gains.
Right. Yeah, it's a complicated question I haven't been able to answer. I think maybe I did my spreadsheet wrong, but looks like there's real advantage to the tax-free compounding even if only take capital gains every 2-3 years in the brokerage account, otherwise active trading of a Roth vs brokerage account seems to be the only advantage.
My plan caps COMBINED Roth and 401 contributions at the federal limit, so I guess that answers my question. In an ideal world we save more than that so the 401k/brokerage is the best combination (and if you can't save more, I'm not sure the lower brackets where you're likely to be are going anywhere). The $5k to a Roth IRA is interesting to consider, but it's definitely phased out and may not even be eligible if you have an employer 401 option.