Originally Posted by GreenFrog
Honestly.. yes. I know this goes against all conventional wisdom of using tax advantaged accounts.. but I've thought long and hard about this. I'd rather pay the tax hit up front now when I think tax rates are at all time lows so I can have instant access to that capital. I don't like the idea of having my retirement funds locked away for 40+ more years. I want to be able to tap into my capital whenever I need it for any large investments or business related ventures I might want to pursue in the future.
But...principal on a Roth can be withdrawn at any time without penalty (since you already paid taxes on it).
Unless you are using that capital for something (or think you need immediate access to the principal as well as the gains), there is no reason not to put money in the Roth.
And since roth contributions are limited per year...its not like you can make it up later.
At this point it doesn't matter as I am maxing out everything, but when I first started, the Roth took priority over anything else like long term savings. I figured "I'd much rather max this out now and potentially have to remove some principal in the future for a down payment, than save money in another account only to later realize I don't need it and that I could have been maxing my Roth".
You should be doing 401k up to match, then Roth, then back to the 401k up to max (as far as retirement goes...obviously fill in non-retirement where necessary).