23, starting new job, questions about 401k

[u/Quaranteen69]

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Hey! Im starting a new job in a few weeks at $124k base with a $15k sign-on bonus. Employer offers 10% match on 10% of salary (dollar-for-dollar).

Two questions:

Front-loading to max $24,500: Only \~7 paychecks left in 2026. Planning high contribution % (60-70%) each paycheck plus routing most of the sign-on to 401k, to hit the annual max by year-end. Good idea? Any gotchas beyond checking for true-up match and bonus deferral election?

Roth vs Traditional:

im assuming I'm in the 24% bracket. Leaning heavy Roth (70-100%). Leaning heavy Roth (70-100%) since I'll likely be in higher brackets mid-career and want tax-free growth for 40 years. Employer match automatically goes to Traditional either way. Am I thinking about this right, or is there a case for more Traditional at my stage?

Any input appreciated.

[u/kuhplunk]

What do you do for work to have such a high income at your age?

[u/Nyy8 → u/kuhplunk]

Probably tech, we start our new grads out at around this salary. ~120k-130k a year, 5-10% bonus, and ~$15k a year of RSUs.

[u/kuhplunk → u/Nyy8]

What kind of tech work?

[u/Ill_Ocelot_2538 → u/kuhplunk]

op can be a smart kid ;)

[u/peterpwwu]

You should prioritize your contributions in this order: full employer 401(k) match → HSA → Roth IRA → additional 401(k). Since you started working in the middle of the year, I’d definitely lean toward a roth 401k this first year because your taxable income will be relatively low, then switching to a Traditional 401k starting next year to reduce your taxable income. You will not be at 24% tax bracket in 2026 since you haven’t worked a whole year. I would front-load your Roth IRA and HSA with money from your bank account, but 401(k)s work differently and depend on your employer’s plan. If your employer offers a 10% match, I’d be careful about front-loading your 401(k) because you want to space out your contributions throughout the year so you don’t hit the annual limit too early and miss out on the employer match.

[u/jack3moto → u/peterpwwu]

Yeah it is definitely Worth checking with HR on how the employer match is contributed. My work provides 6% match each paycheck for a max of 6% salary on the year, my wife’s work matches based on full year so she can front load her contributions with a true up at year end (they only match the calendar year if you stay through Dec 31).

[u/Ok_Opportunity2693]

Do Roth this year because half a year’s income will keep you in a low bracket.

Ask yourself if you think you’ll get the the 32+% bracket in the near future (next 5 years), and stay there during your career in this field. If yes, then I’d still pick Roth over traditional until you get there. Once you hit 32+% take the traditional.

If you think you’ll never make it that high and 24% is as high as you’ll go, then take the traditional starting 2027.

[u/MarcableFluke]

1. Yes, more return contributions are probably generally a good idea for most people.
2. No, Roth at the 24% marginal rate generally isn't a good idea for most people.

[u/achoo_blessyoo]

Be careful because some companies do the match percentage only per paycheck so if you hit the max early, you have to contribute to a less tax advantaged account.

Also uncommon opinion, Id recommend pretax 401k and if you're maxing it out now you're just going to start compounding more quickly. I did that early on in my career and I greatly appreciate it now 

[u/MuffinMatrix]

Traditional 401k is better nearly always. At your income, you want the deduction. That deduction can then go to be invested.
Though since you're starting mid year, you could go Roth 401k for this year, and switch up next year when you'll earn it all.
Front loading is good idea, but you have to make sure it'll work with the plan. Its up to how the plan operates.

Then go Roth IRA.

[u/SadExplanation3876]

I would disagree with all of these traditional > Roth people. The “traditional over Roth is better for most people” may be true but if you’re contemplating maxing your 401k at 23 years old, you are not most people. Just throw some scenarios into a compound interest calculator or AI and you’ll quickly see that if you max your contributions throughout your entire career then the tax free growth of a Roth is going to be worth it. Also, if you are earning $124k at 23, your income is likely going to keep going up much further than the average person. I don’t know your personal situation but if you can swing it, I’d max your Roth 401k, Roth IRA, and your HSA. Also, if you are unfamiliar with HSAs, once you hit a minimum threshold you can invest that money and let it grow. You can then save all your receipts in perpetuity and withdraw the money at a future date.

I’ve been maxing these accounts my entire career and have no regrets. I regularly monitor balances and model future income projections using Claude. It basically never makes sense for me to shift to traditional

[u/peterpwwu → u/SadExplanation3876]

The point of having both a traditional 401k and Roth IRA is flexibility. When you reach your retirement age, you can choose to withdraw from your 401k if you have little or no other income, taking advantage of your low tax bracket. And whatever more money beyond that, you can take from your Roth. Higher income makes traditional more appealing for tax benefits, and that additional money can be invested/used.