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Investing for retirement - would starting a roth IRA be next for me?
Posted on 6/10/22 at 10:13 am
Posted on 6/10/22 at 10:13 am
Wife and I are putting in the maximum our employers match for our 401ks.
We sold some property recently and had about 80k in savings afterwards. We put 40K in I-bonds considering their current rate. So we have about 40K left.
All debts are paid except for home loan.
We meet the qualifications for roth iras, so I'm thinking we should put 12k into two roths this year and invest it in something safe like vanguard, etc
Would that be wise at this point with the economy? Would something else make sense first?
Thanks.
We sold some property recently and had about 80k in savings afterwards. We put 40K in I-bonds considering their current rate. So we have about 40K left.
All debts are paid except for home loan.
We meet the qualifications for roth iras, so I'm thinking we should put 12k into two roths this year and invest it in something safe like vanguard, etc
Would that be wise at this point with the economy? Would something else make sense first?
Thanks.
This post was edited on 6/10/22 at 10:39 am
Posted on 6/10/22 at 10:14 am to NATidefan
If you are both maxing out your 401k why in the world don't you have a Roth yet?
Posted on 6/10/22 at 10:24 am to LSU in the hizzle
quote:
If you are both maxing out your 401k why in the world don't you have a Roth yet?
Does that matter? I really don't want to have to explain it all.
I don't know much about investing and am trying to learn. We didn't have a ton of extra laying around until we sold our property. I had purchased the land for 30k planning to build, but ended up buying a house instead and sold the land three years later for a large profit. Before that we just had an emergency fund in a high yield account.
We both have also recently gotten large raises.
This post was edited on 6/10/22 at 10:29 am
Posted on 6/10/22 at 10:37 am to LSU in the hizzle
Sorry, I just realized I misspoke. We aren't maxing 401k, we are putting in the maximum that our employers match.
Posted on 6/10/22 at 10:39 am to NATidefan
Yes, if you qualify for Roth start them. If not, and you have no old IRAs then do a backdoor Roth. Just put them in a low expense index fund w a low cost brokerage like Fidelty, Schwab or Vanguard. You could set some aside to fund 2023 Roth Jan 1st or just put excess in a taxable account.
This post was edited on 6/10/22 at 10:59 am
Posted on 6/10/22 at 10:57 am to NATidefan
Do you have an option for a roth 401k?
Posted on 6/10/22 at 11:00 am to Enadious
Roth IRA offers more flexibility and options than Roth 401k.
Posted on 6/10/22 at 11:04 am to NATidefan
Not matching 401k yet, have you considered if you expect to be in higher tax bracket now or in retirement? If now, you may want to put more into traditional 401k or IRA. Roth is best if you expect higher taxes in retirement and for future tax diversification to manage tax bracket and ACA insurance subsidy eligibility etc...
This post was edited on 6/10/22 at 11:08 am
Posted on 6/10/22 at 11:05 am to Enadious
quote:
Do you have an option for a roth 401k
I don't. I'll have my wife double check, but I don't think so and she has never mentioned it.
This post was edited on 6/10/22 at 11:06 am
Posted on 6/10/22 at 11:08 am to TorchtheFlyingTiger
Probably higher tax bracket now i would assume, so a traditional would probably be better then I guess.
Posted on 6/10/22 at 11:19 am to NATidefan
Google Roth 401k and roth ira. Take advantage of both
Posted on 6/10/22 at 11:46 am to NATidefan
quote:
Does that matter?
Yes, because
quote:
We both have also recently gotten large raises.
You are no longer eligible to contribute to a roth IRA above a certain income level, so opening one is something everyone should be doing the second they start working a job in their teens.
quote:
If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $140,000 for the tax year 2021 and under $144,000 for the tax year 2022 to contribute to a Roth IRA, and if you're married and file jointly, your MAGI must be under $208,000 for the tax year 2021 and 214,000 for the tax year 2022.
This post was edited on 6/10/22 at 11:48 am
Posted on 6/10/22 at 12:01 pm to Chucktown_Badger
one thing I did was utilize the max on my 401k. More than employee match. Where it came in as plus for me was when I left the company after the year I turned 55 I had access to my 401k to retire early. IRA's were accessed at 59.5
Posted on 6/10/22 at 12:06 pm to NATidefan
If you expect the same or less income in retirement, you might look at traditional IRA over the Roth. If you expect to be balling it up in retirement then definitely get that Roth going.
Posted on 6/10/22 at 12:08 pm to Chucktown_Badger
quote:
Yes, because
quote:
We both have also recently gotten large raises.
You are no longer eligible to contribute to a roth IRA above a certain income level, so opening one is something everyone should be doing the second they start working a job in their teens.
My point is does it matter at this point to me? I can't go back and start one. Even with the raises we are still below the income level and I don't see that changing anytime soon.
This post was edited on 6/10/22 at 12:10 pm
Posted on 6/10/22 at 12:18 pm to NATidefan
Democrats gonna turn you into glue when you turn 50 baw why save money
Posted on 6/10/22 at 2:02 pm to NATidefan
I'd start putting the funds into a ROTH while you still can. As others pointed out, at some point you most like will out earn the ability to directly contribute.
Make sure you have the funds accessible (or adjust tax withholdings) to cover the tax hit for selling the land at a profit.
quote:
I had purchased the land for 30k planning to build, but ended up buying a house instead and sold the land three years later for a large profit.
Make sure you have the funds accessible (or adjust tax withholdings) to cover the tax hit for selling the land at a profit.
Posted on 6/10/22 at 2:45 pm to Weekend Warrior79
quote:
Make sure you have the funds accessible (or adjust tax withholdings) to cover the tax hit for selling the land at a profit.
Thanks, yeah, we already paid the taxes on the income from the land sell.
Posted on 6/10/22 at 3:11 pm to TeaParty
Roth ira can be withdrawn at any age without penalty as long as you don't exceed the total you contributed. It's a necessary vehicle for people who want to retire early and this feature is often overlooked in discussion about the various financial instruments.
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