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Started By
Message
1
Posted on 1/2/17 at 3:34 pm to tlsu15
quote:
Go for the 7%. It's an automatic 7% return on your investment, you won't find those odds anywhere else.
It's 100% return
ETA:dammit figured I wouldn't be first
This post was edited on 1/2/17 at 3:35 pm
Posted on 1/2/17 at 8:16 pm to indytiger
Personally I contribute 5% and my work 12%, so they more than double
Match me. I'm considering increasing my contribution.
Match me. I'm considering increasing my contribution.
Posted on 1/2/17 at 9:13 pm to Northwestern tiger
Posted on 1/2/17 at 9:58 pm to Northwestern tiger
quote:
Personally I contribute 5% and my work 12%, so they more than double Match me. I'm considering increasing my contribution.
You think?
What's their cap? The legal cap is 54,000 total contribution, but I've yet to see an employer who does that for little people.
Posted on 1/2/17 at 10:06 pm to barry
quote:
I'm guessing it has a lot to do with your tax rate when you withdraw. I'd guess I'd need to do the models but my intuition just doesn't let me think that maxing our your 401k tax free and having it grow beats a Roth. FWIW i have a straight index fund ETF for my 401k.
The argument some make is that you are kidding yourself if you think your tax bracket will be higher in retirement than it is now, therefore, you should take your tax savings now as opposed to later. Not to mention some intangible benefits like keeping more money for yourself now where you may make other moves with it, and the fact we can't know what tax rates will look like in 50 years, but we do know what they are now.
We are past ROTH phaseout, but even then I prioritize 401k over backdoor contributions for this reason. There is no way in hell we'll be making in retirement what we make now.
This post was edited on 1/2/17 at 10:08 pm
Posted on 1/2/17 at 10:55 pm to Teddy Ruxpin
quote:
The argument some make is that you are kidding yourself if you think your tax bracket will be higher in retirement than it is now, therefore, you should take your tax savings now as opposed to later. Not to mention some intangible benefits like keeping more money for yourself now where you may make other moves with it, and the fact we can't know what tax rates will look like in 50 years, but we do know what they are now. The argument some make is that you are kidding yourself if you think your tax bracket will be higher in retirement than it is now, therefore, you should take your tax savings now as opposed to later. Not to mention some intangible benefits like keeping more money for yourself now where you may make other moves with it, and the fact we can't know what tax rates will look like in 50 years, but we do know what they are now.
I've run quite a few simulations and for most people, prioritizing Roth over 401k comes out ahead in the end.
Posted on 1/2/17 at 11:21 pm to Sigma
quote:
I've run quite a few simulations and for most people, prioritizing Roth over 401k comes out ahead in the end.
I need some simulation software
At a certain point I just get bogged down
Posted on 1/3/17 at 5:08 am to Sigma
quote:
I've run quite a few simulations and for most people, prioritizing Roth over 401k comes out ahead in the end.
Are you assuming that income tax rates will increase? Otherwise I don't see why the Roth would come out ahead
Posted on 1/3/17 at 5:36 am to TheIndulger
My company contributes 10% of annual salary on a quarterly basis regardless of employee contribution. I contribute an additional 6% (16% of annual salary going into 401k) and also fund a Roth as well.
Posted on 1/3/17 at 6:04 am to indytiger
quote:
Young single guy. No debt. 1 for 1 matching up to 7%.
If you can do it/afford it, figure out what % including the company match gets you to the 18k a year max you can do... Don't forget about your $5500 Roth IRA max each year too
Posted on 1/3/17 at 9:09 am to Lsut81
you really don't understand the limits huh
Posted on 1/3/17 at 9:10 am to indytiger
15% of YOUR money. Ignore the match and treat it like gravy. Do this from day 1 and you'll never regret it.
Posted on 1/3/17 at 10:53 am to gpburdell
quote:
0) Have a 6-9 month emergency fund
1) 401k to get full company match
2) Max Roth
3) If 401k has low cost funds, max 401k
4) Max HSA if available
5) Taxable accounts
One edit. This is the convention wisdom, but most corporate drones aren't going to really find HSA's attractive if they have good health insurance.
I am pass the phase out and have been for 10+ years. But if I had an emergency fund, I would likely lean towards more in the 401k just due to the tax benefits.
Posted on 1/3/17 at 11:55 am to Ric Flair
quote:
No trying to nitpick, but it's 100% return on his investment.
I was rushing, but yes you are right. I think it was pretty obvious to see what I meant though
Posted on 1/3/17 at 6:22 pm to nolaks
quote:
you really don't understand the limits huh
No, why don't you explain them to me
Posted on 1/3/17 at 6:29 pm to Hawkeye95
What tax benefits does your 401k have that an HSA doesn't have?
Posted on 1/3/17 at 6:31 pm to TheIndulger
So would it be better for a 30 yo to contribute 10% Pretax, or 6% Roth?
(I'm sure that's an impossible question to answer but interested on the feedback regardless)
(I'm sure that's an impossible question to answer but interested on the feedback regardless)
Posted on 1/3/17 at 6:44 pm to fillmoregandt
Since Roth was brought up in this thread, I have a question. Is there a Roth out there that you can make deposits to when you want, in cash? I know you can set something up to draft out of your account monthly for example but I have rental property that I get paid in cash. Some of these funds are used for occasional repairs and pay property taxes yearly.
Posted on 1/3/17 at 6:58 pm to JBM210
I always funded my Roth from my checking or savings account so I'm not sure what the practical point of your post is.
You want to drop fat stacks at some Fidelity storefront or something instead of your bank? Doesn't make a practical difference in my opinion
You want to drop fat stacks at some Fidelity storefront or something instead of your bank? Doesn't make a practical difference in my opinion
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