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Hennepin, IL | I've never really understood the attraction to a Roth either. Seems like with tax rates in a vacuum you're about a wash on returns until you get out a ways, like the 30 years in your example. I think at 20 years it's almost exactly a wash and anything after that there's a benefit to a tax deferred IRA or 401k. That's assuming the money you're using to pay the tax on the Roth money is invested in a tax deferred account. Apparently you can make a case for either lower or higher taxes at retirement (see the thread below), so that's really what you're gambling on in the end. The Roth not having minimum distributions is nice too and may be the way to go if that money will for sure be passed on to the next generation and not used.
Edit: Read your post again. If you took the money to pay the taxes out of the 401k, you would only be hit with a 10% penalty on the $340K taken out for taxes, so $34K not $100K. So you'll have $626K left to invest, not $560K.
Edited by AVP_Matt 11/25/2022 11:06
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What you cannot do if you a million in cash today
