"Yes, in your situation, just as the one recently about health insurance, completely right that what a traditional 401(k) or a traditional IRA or both, what they do is they bring down your income enough, in many cases, below thresholds where other benefits accrue to you that you would lose if you were listening to the man from Roth."
"A cluster of elite universities has converged on $200,000 household income as the cutoff for free or near-free tuition. Harvard, MIT, and Penn have expanded their aid policies to eliminate tuition for families at or below that level."
"For 2026, the IRS allows workers to contribute up to $24,500 to a traditional 401(k) and up to $7,500 to a traditional IRA. Maxing both reduces reported income by $32,000."
A Pennsylvania father plans to switch from Roth to traditional retirement contributions to keep his income below $200,000, qualifying for reduced tuition at elite schools. Many universities, including Harvard and Yale, have set this income level as the cutoff for free or reduced tuition. By contributing to a traditional 401(k) and IRA, he can lower his Adjusted Gross Income (AGI) significantly. This strategy can save families over $240,000 in tuition costs over four years, making it a financially sound decision during college years.
#college-tuition #retirement-contributions #financial-planning #elite-universities #income-thresholds
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