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Roth IRA vs 401k

Posted on 3/2/15 at 8:38 pm
Posted by negatiger17
Member since Jul 2010
183 posts
Posted on 3/2/15 at 8:38 pm
I am currently participating in my company's 401k program, and they do not match (currently investing 12%)

I have just opened a vanguard Roth IRA, and invested the minimum with plans to max in 2015.

How would you go about distributing the investment between the two?
Posted by jimbeam
University of LSU
Member since Oct 2011
75703 posts
Posted on 3/2/15 at 8:44 pm to
Max Roth then 401k in your case
Posted by Croacka
Denham Springs
Member since Dec 2008
61441 posts
Posted on 3/2/15 at 8:45 pm to
Depends on your income


What kind of company doesn't match any contributions? That sucks
Posted by foshizzle
Washington DC metro
Member since Mar 2008
40599 posts
Posted on 3/2/15 at 9:01 pm to
If they don't have any match at all, I'd max the Roth first before putting anything in the 401.

And also try to put myself in a position where I can get hired somewhere else that does offer a match.
Posted by iAmBatman
The Batcave
Member since Mar 2011
12382 posts
Posted on 3/2/15 at 9:09 pm to
Without knowing anything about your income, typically its beneficial to contribute to a Roth when you are younger because you'll be in a higher tax bracket when you get older. There are income limits and phase-outs.

I'd recommend to stop contributing to the company 401(k) if there is no match. I'd contribute the max allowed to a Roth IRA and then any amount you'd wish to save for retirement, put it in your company 401(k)
Posted by Fat Bastard
coach, investor, gambler
Member since Mar 2009
72662 posts
Posted on 3/3/15 at 12:46 pm to
Plenty companies don't match. Not too mention crappy choice of funds. Nothing new.
Posted by Overbrook
Member since May 2013
6088 posts
Posted on 3/3/15 at 3:49 pm to
Any type of IRA is superior to a 401K EXCEPT that you can put a lot more money into a 401K. You have a lot more options with an IRA; 401Ks are basically tied to the mutual fund industry. Mutual funds are basically honest, but many hedge funds are not...the crooked hedge funds were aided in their theft of billions from the nation's retirement during the stock market crash by 401K dollars being tied to mutual funds and the inability of the individual investor to short or move his money quickly.
I like Roth better than tax deferred, but that's probably because I have about 20x the funds in a tax deferred.
This post was edited on 3/3/15 at 3:51 pm
Posted by sonoma8
Member since Oct 2006
7666 posts
Posted on 3/3/15 at 4:29 pm to
Not trying to hijack but since the OP has a 401K that is not matched, if he had one that was matched, would you max out the 401k 1st then go to roth?
Posted by iAmBatman
The Batcave
Member since Mar 2011
12382 posts
Posted on 3/3/15 at 4:32 pm to
Yes. Take advantage of the maximum match. It's free money.
Posted by studentsect
Member since Jan 2004
2259 posts
Posted on 3/3/15 at 4:33 pm to
quote:

if he had one that was matched, would you max out the 401k 1st then go to roth?

Max out up to the match. Regardless of the better investment options in a Roth, you aren't going to find an investment that has a return that is better than an instant 100%.
Posted by sonoma8
Member since Oct 2006
7666 posts
Posted on 3/3/15 at 4:46 pm to
Sorry OP, one last question, just looked it up and it is a 4% match at 80% vested as of right now. Next year it will go to 5% and 100%. So basically I need to start dumping more money in that and pull back of maxing out my Roth?

Sorry again OP
Posted by Croacka
Denham Springs
Member since Dec 2008
61441 posts
Posted on 3/3/15 at 4:48 pm to
Key thing to to just Max out the match, always


Then you can go back to funding your Roth IRA


Posted by sonoma8
Member since Oct 2006
7666 posts
Posted on 3/3/15 at 4:49 pm to
Thanks Croacka.... Makes sense if you think about it i guess.
Posted by Chris Farley
Regulating
Member since Sep 2009
4180 posts
Posted on 3/3/15 at 8:13 pm to
quote:

but many hedge funds are not...the crooked hedge funds were aided in their theft of billions from the nation's retirement during the stock market crash by 401K dollars being tied to mutual funds and the inability of the individual investor to short or move his money quickly.


Pretty slippery slope you had to slide down there to get all the way to "theft". Hope your arse isn't chapped anymore than it already was before.
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