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Questions regarding IRAs
Posted on 8/4/17 at 1:41 am
Posted on 8/4/17 at 1:41 am
My company does not offer a 401k plan so I am researching my options retirement accounts. I am currently eligible to contribute to a Roth IRA, but hope to be making over the limit in the next 5 years or so. In this case, would it make more sense to just open a traditional IRA and prevent having to transfer from one to the other? Also, what are your thoughts on using an online broker such as Wealthfront for this account?
This post was edited on 8/4/17 at 2:47 am
6
Posted on 8/4/17 at 6:46 am to acadianatiger1992
You won't have to transfer anything, you just won't be able to add to the balance
If you are making near the Roth limit now, it starts to make less sense to not take advantage of the pretax contributions. That's JMO, but you can argue both ways. It will depend on what tax bracket/rate your distributions will see down the road.
For online brokers, I recommend fidelity but honestly haven't researched many other options. I just know they have some great funds and fee structures.
If you are making near the Roth limit now, it starts to make less sense to not take advantage of the pretax contributions. That's JMO, but you can argue both ways. It will depend on what tax bracket/rate your distributions will see down the road.
For online brokers, I recommend fidelity but honestly haven't researched many other options. I just know they have some great funds and fee structures.
This post was edited on 8/4/17 at 6:47 am
Posted on 8/4/17 at 9:03 am to acadianatiger1992
quote:
Also, what are your thoughts on using an online broker such as Wealthfront for this account?
Vanguard index fund for the win.
You wont find lower expense ratios. Look into their retirement target funds too.
Posted on 8/4/17 at 9:05 am to acadianatiger1992
quote:
My company does not offer a 401k plan
Ya...I wouldn't be cool with this at all.
Posted on 8/4/17 at 9:08 am to acadianatiger1992
Google "Back Door Roth IRA". While I would expect this known workaround to be changed within five years... clearly the federal government can't get anything done, so maybe it'll still be there. Until it's not, this is your answer.
Avoid target date funds. They're stoopid.
Avoid target date funds. They're stoopid.
Posted on 8/6/17 at 1:48 pm to acadianatiger1992
In your specific situation I would fund a Roth. You likely are not looking at significant tax savings this year in a TIRA. People can quibble over whether target retirement funds are the best option, they are far from the worst, especially given a small sum of money. If you have an HSA option with health insurance consider funding that, too. I recently looked at my wife and my tax deferred holdings and what RMDs may look like in 16 years and it is ugly and that is with Roths, HSA, etc. Sometimes it is best to pay minimal taxes early with the Roth than much more to convert later due to income stacking/marginal tax rates.
Posted on 8/6/17 at 9:41 pm to acadianatiger1992
You can only contribute $5500 in an IRA?
Just a question - how you get wealthy off of that?
I would look at saving 10-20% of your income in a vehicle that grows tax free, not tax deferred.
Do you believe taxes are going up or down?
Traditional IRAs also can tax 85% of your social security as well.
How much of your retirement do you want to share with the government?
The only plans that are tax free is;
Roth IRA, Municipal Bonds, and A properly structured Cash Value life insurance.
Life insurance is not controlled by the government and there are unlimited contributions to them. If structured correctly your money is accessible in year 1, guaranteed growth, and you can take out loans as non recourse financing to buy real estate and other secure investments...
Something to consider.,,
Just a question - how you get wealthy off of that?
I would look at saving 10-20% of your income in a vehicle that grows tax free, not tax deferred.
Do you believe taxes are going up or down?
Traditional IRAs also can tax 85% of your social security as well.
How much of your retirement do you want to share with the government?
The only plans that are tax free is;
Roth IRA, Municipal Bonds, and A properly structured Cash Value life insurance.
Life insurance is not controlled by the government and there are unlimited contributions to them. If structured correctly your money is accessible in year 1, guaranteed growth, and you can take out loans as non recourse financing to buy real estate and other secure investments...
Something to consider.,,
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