If you’re on an income-driven plan then contributing money into a “Traditional” 401(k) is a great choice.

Why?

Because it lowers your taxable income for the year thereby lowering your monthly income-driven payment.

Remember the key to any income-driven plan is “loan forgiveness”, so the best strategy is to pay as little as possible during those 20-25 years.

Then, a higher balance will be forgiven which saves you a TON of money!