$10.$ Benefits of traditional and Roth $401($k$)$ plans

Traditional $401($k$)$ versus Roth $401($k$)$

Hilary has decided to contribute to a savings program. She can open a traditional $401($k$)$ or a Roth $401($k$)$ and has determined that she can afford a $$10,800$ contribution. Hilary$$s salary is $$34,500$ per year, and she is in the $25\%$ tax bracket.

If Hilary decides to go with a traditional $401($k$),$ her contribution amount will be

$

And the amount offset via a reduced tax bill will be

$

If$,$ instead, Hilary decides to go with a Roth $401($k$),$ her contribution amount will be

$

And the amount offset via a reduced tax bill will be

$

Assuming all the same facts, suppose that Hilary decides to open both $401($k$)$ plans, splitting what she can afford to contribute equally between both plans.

Under this scenario, Hilary$$s contribution amount will be

$

And the amount offset via a reduced tax bill will be

$

When Hilary retires, which plan$$s monies will she be able to exclude from taxable income?