<prompt> Human: I just landed a job making 55,000 a year and have never had a 401k before. It is with Fidelity and I decided to do 10 in a Roth and 10 in a Traditional. I also decided to do the 2060 Retirement Date Fund, since I was not familiar with picking my own investments and what not. Finally, I did the automatic 1 increase to my contributions each year. The only debt I have is 11,000 in Student Loans and 7,000 left for my vehicle. Is this a good amount or should I probably try to pay off my loans first and then start putting more in my retirement?---Alright everyone, Ive decided to go 20 Roth for a few years now until I feel that Ill be in a higher tax bracket than when I retire. Thank you very much everyone. I think Id rather be more aggressive with my saving so itll give me a reason to not go out and blow my money on stupid things right now.  <response>: You can roll Trad IRA balances into a Roth IRA at any time for any reason and pay tax on the amount rolled over that tax year. That means that for Roth contributions to be better then the tax rate this year must be the lowest tax rate you expect to see if your lifetime.I think very often in this sub people get caught up in the Roth is always better, tax free for life baby! hype and forget that Roth effectively grandfathers in the tax on the principal and growth by paying it up front at the current years rate. Thats not always better.A simple example:Person A earns 1,000. They pay 15 tax on the 1,000. They put the 850 into a Roth IRA. After 10 years at 7 annual growth they have 1,672 in their Roth IRA, completely tax free.Person B earns 1,000. They choose to put all 1,000 into a Trad IRA, not paying any tax on it this year. After 10 years at 7 annual growth they have 1,967 in their Trad IRA. Theyre married now and their wife took the last six months off work because of her pregnancy and their new baby. Filing jointly with just 1.5 incomes and a baby their effective tax rate is just 10. They roll the Trad IRA into a Roth IRA, paying 10 or 197 on the balance. They now have 1,770 in their Roth IRA, also completely tax free.Sure, person B paid more in tax in absolute values, 197 vs 150, but person B had the advantage of growth from that 150 for 10 years. A Roth IRA doesnt tax exempt the growth when compared to a Trad IRA, it just frontloads the tax. All that matters in comparing the two is the effective tax rate.If your effective tax rate will never be lower than it is today then Roth is better. If your effective tax rate could go down, and for a lot of people this will definitely apply, Trad is better.Trad also has some additional advantages including recategorization exploitation and taking advantage of market crashes. Lets say you put 1,000 into a 2016 Trad IRA on Jan 1st 2016. You have an option to recategorize that as a Roth IRA contribution until April 2017, and an option to roll it into a Roth. Lets say the market tanks during those 16 months and the value of your investment drops to 700. You locked in a 1,000 tax deduction when you made the contribution, you can now roll the 700 into a Roth IRA and pay tax on the 700 while keeping the 1,000 deduction. Now lets say the plan backfires and the investment soars to 1,500. You call up Vanguard and ask them to recategorize it to Roth. You give up your 1,000 tax deduction and have them turn the 1,500 into post-tax dollars. 