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Get full employer 401k match, max roth... then taxable acct or more 401k?
Posted on 3/13/15 at 11:49 am
Posted on 3/13/15 at 11:49 am
The fee's on the funds in my 401k are .41% vs .07% in my index funds in the taxable account.
What is the best route to go here?
401k makes it easier to DCA because I don't have to do anything and don't have transaction fees.
thoughts?
What is the best route to go here?
401k makes it easier to DCA because I don't have to do anything and don't have transaction fees.
thoughts?
Posted on 3/13/15 at 11:53 am to SomeGuyFromLA
We need a general rule posted at the top of the board for this question.
401k to match
Max Roth
HSA to max if you have one
401k to Max
taxable
Of course if you're saving for a house down payment greater than 5 years that may be in a taxable account, but that's a separate issue from retirement savings order of operations
401k to match
Max Roth
HSA to max if you have one
401k to Max
taxable
Of course if you're saving for a house down payment greater than 5 years that may be in a taxable account, but that's a separate issue from retirement savings order of operations
This post was edited on 3/13/15 at 11:54 am
Posted on 3/13/15 at 5:26 pm to Teddy Ruxpin
What if you can't contribute to a ROTH should you go
401k to match
Max Traditional IRA (Backdoor to Roth?)
HSA to max if you have one
401k to Max
taxable
401k to match
Max Traditional IRA (Backdoor to Roth?)
HSA to max if you have one
401k to Max
taxable
Posted on 3/13/15 at 5:53 pm to Teddy Ruxpin
Why do people think it's beneficial to do a Roth IRA vs max 401k? One gets taxed now, one gets taxed later, mathematically it's the same yes?
Posted on 3/13/15 at 5:58 pm to TheIndulger
Depends on your tax bracket when you retire
Posted on 3/13/15 at 6:24 pm to Teddy Ruxpin
I think the HSA is severely underrated. No other tax advantaged vehicle is potentially completely untaxed.
Posted on 3/13/15 at 6:39 pm to SomeGuyFromLA
quote:
What is the best route to go here?
REAL ESTATE
Posted on 3/13/15 at 6:44 pm to TheIndulger
quote:
Why do people think it's beneficial to do a Roth IRA vs max 401k?
1) better choice of funds
2) better expense ratios
3) more control of ROTH
4) more flexible, can withdraw contributions without penalty
Posted on 3/13/15 at 10:58 pm to SomeGuyFromLA
Your 401k definitely has more fees than that. You have a sales load, trading fee, annual expense ratio. You may have a minimum total fee of 1.5%
Put more money into a tax free vehicle.
The match from a 401k will be wiped out from the taxes you take out.
Google truth concepts videos on qualified plans and let me know your thoughts.
Put more money into a tax free vehicle.
The match from a 401k will be wiped out from the taxes you take out.
Google truth concepts videos on qualified plans and let me know your thoughts.
Posted on 3/14/15 at 8:34 am to player711
quote:
You have a sales load,
maybe, depends what funds he is in. That is why i did not include that.
Posted on 3/14/15 at 10:45 am to TheIndulger
quote:
Why do people think it's beneficial to do a Roth IRA vs max 401k? One gets taxed now, one gets taxed later, mathematically it's the same yes?
Generally, Roth is better when you believe tax rate today is lower than tax rate in retirement (tax rate increases in future, tax bracket/income increases, etc.). It always bothers me that this board blankets "Roth is better!" Generally, it may be true, but it's not always the case. As evidenced by the financial goals thread, there's some high earners around here. Why get taxed today at that high rate?
I agree with a Roth, but it should be a tax diversified approach. And things such as a Roth 401k are never even considered.
This post was edited on 3/14/15 at 3:08 pm
Posted on 3/14/15 at 2:28 pm to Teddy Ruxpin
quote:
401k to match
Max Roth
HSA to max if you have one
401k to Max
taxable
I respectfully disagree with general statements like these because everyone earns, spends, and is taxed differently with differing deductions, credits, and depreciation schedules.
Current use of taxable investment options typically allows for better total ROI when joined with tax benefits at younger ages, prior to having lost most ordinary tax credits at retirement age.
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