Separate names with a comma.
Discussion in 'RD's Lounge' started by rivermobster, Sep 30, 2019.
Yes? No? Maybe so?
If you have a match ya maybe. But do the Roth if you have the option.
If you have a match I feel you have to take advantage of the free money. ROTH or traditional really depends on your tax situation today. Most of the time I would say ROTH.
Sent from my iPhone using Tapatalk
The money is ready and waiting to be taken advantage of. It's time.
I'm questioning where to move/re-invest what I have after a couple small withdrawals. Already discussed at the tax implications with Hamed.
I dont trust "Financial Advisors"
Why - because of the way they get paid...
Percentage of your portfolio or
Fee on the trades they make for you..
Regardless if they make you money or lose you money... they still get paid...
Getting right to the point...
They get paid whether they do a good job or a bad job..
Most other professions... you get fired when you do a poor job, or you dont get paid..
Be very careful.... if you want more of my opinion on the subject... pm me...
Its RDP. Everyone is a "financial advisor" on here! lol
Probably not what you’re asking.
But we changed residency to Nevada.
The money we saved in California income tax, paid cash for the house in 6 years.
I thought ROTH was 5000 max per year
The tax implications is why I don't like them period. That and tax deferred sux.
Hamed (shintooo) is your friend in these matters.
5,500 or 6,500 if over age 50.
IRA's got bumped up this year
"The annual contribution limit for 2019 is $6,000, or $7,000 if you're age 50 or older."
This is correct for Roths, please also remember you may exceed the income limits, in which case you'll need to look into a backdoor
So why recommend ROTH over 401k?
saving 5-6,500k a year isn’t jack shit.
Shouldn’t you max out 401k to take full advantage of employers match and then max out ROTH?
If someone can’t afford to max out the 401k no need to worry about ROTH.
If you only do ROTH you got big problems would you agree?
There’s a Roth 401k and a Roth IRA
not when contributing to a ROTH 401k. You can Max out your Roth 401k contribution up to 2019 limit of $19,000. Above that limit, you can contribute additional after-tax $$$, which you can convert to Roth (immediately or later). These additional after-tax contributions you convert to Roth, will require you to pay the state, fed, local taxes now on the conversion (as I understand it anyway).
My wife is a wannabe financial advisor... and by that I mean she says the best strategy is to max out everything (401k, Roth, whatever).
I always say "but then there's not any left to buy fun, depreciating toys"
You still get taxed in the end it all sounds great
The Google says you are correct. But here comes another question.
I am budgeted to put 14-16k in per year pre tax. No way in hell can I do that post tax unless we cut back on everything.
Luckily I have a company match that is very good or my retirement picture would be dog shit.
Would you rather pay taxes on 100 today or 10,000 in 30 years?
Buy low, sell high.
Besides that I got nothing.
It depends on your tax situation and rate of returns honestly. If everything remains constant and your returns remain predictable sure paying today makes sense.... but we can’t tell the future.
Then factor in the tax paid on those contributions over your lifetime, and your higher taxable income, it can be closer to a wash than one might think.
No it isn't even close man.
It depends on many factors. I agree there are situations where you are absolutely right though.
In talking with my planner he makes a case for switching from one to another at certain ages/income levels.
A Roth is also taking into consideration that our govt does not decide to add a bullshit tax to it in our future .
Just fyi I have back tested and ran about 10,000 illustration models comparing 401K to the product I sell and it never comes even close. And that is assuming no market crashes which my product includes a 2% guaranteed floor. I won't discuss the product here because I don't really care to explain it.
Well spill the beans man. I don’t know Jack about investing. Only thing I know is don’t depend on social security like my parents did. I’m trying to learn something.
I’m not sure why you’re so bent against investments other than the one you sell. Every time a 401k thread is started you post it categorically sucks and basically anyone putting their money in one is a fool. Then you push a product you sell (which has been posted in the past). There’s many ways to invest and some are good for certain people and vise versa. If you hate 401k’s why bother posting in a 401k thread?
A more accurate comparison is this, would you rather pay taxes on $100 today, or taxes on $100 in the future? If a person believes their tax liability is lower today, then invest after tax funds in the Roth structure.
If a person believes they will be in a lower tax structure in the future, then defer in a 401k.
I never said I was against other investments. I suggested the Roth remember. 401K are the next class action lawsuit in my opinion. They were never even designed as a retirement account. Also the title of the thread welcomes other opinions...I even said take advantage of the match. Should I stop there?
I also sell 401K's
So the 100 won't grow over the next 10,20,30 years?
Sounds like your your a financial analyst or maybe a financial advisor or do you sell new York life
Of course it will. For each $100 you withdraw, what is the tax liability? The pitch is that most people in retirement will be in a lower tax bracket because they are no longer receiving a paycheck. It is true for some and not true for others. That is why investment advice is very personal and situation specific.
Yes your tax bracket could be lower but most people also don't have near the write offs they did have which can even it out. Plus my bet is taxes will go up etc.
The write offs are gone
Guess I won't be like most people. I plan on being in the same or higher tax bracket when I retire in a couple years. Having a 401 type pension fund for 38 years has helped.
I primarily sell life insurance and annuities. My wife and our other partners do managed money such as 401K's, Roth's, variable products, bonds, etc. Most of our clients have a number of these products working together.
Personally my primary product is IUL. I try and avoid it on the internet because it gets pointless fast. But the product when designed correct does this...
12-14 % cap
0 % guaranteed floor - with option to take 2.5 guaranteed.
71% probability it will average 8.3%
Access to loans at 3% charge annual. With positive arbitrage in yrs where the index goes over 3%.
Tax free loans for income.
Access to CV without penalty.
The biggest highlight is the fact you are sheltered form a market crash. Think of people relying on there 401K to retire in 2007. And of course the tax free income and compounding interest.
There a good place to put some money on life ins policy tax free
I’m meeting w my deferred Comp rep tomorrow. I’ve been super aggressive the last few years and it’s paid off, short of a few bumps over the last year. I’m considering on going super conservative until the results of the election or a more defined direction with all this up and down w China and the bs caused by the dems. I may miss a 3-5 gain, but prevent a 15-20% loss which the dems would love.
Am I over reacting? It’s just crazy how half of our country is working against prosperity and growth to get trump out. I’ve had a good run with 25%, 15% and 12% gains the last few years.
A couple of serious questions,
Would you recommend an IUL over a simple Term Life policy?
If so, why?
Do you feel everyone needs either an IUL or a Term Life policy or Both?
Do you feel some people don't need either?
Yes I do suggest it because it is an asset. Only 1% of term policies pay out so it has zero return on investment. But term policies with living benefits are awesome. That means if you have a critical or chronic illness you can access monies to pay for anything. But when we do IUL's we usually do it on the person with the cheapest cost of insurance. So for us my wife has the IUL and I have some GUL and term.
I feel anyone that has debts, kids, wife etc should have some form of life insurance. Permenant products always have a return on investment. The younger people do it the cheaper it is. I own a GUL on both my parents and as weird as it sounds it is part of my retirement....
I suppose people that don't have any debts or obligations in life don't need anything.
A GUL is a form of permenant life insurance that has zero accessible cash value. It is just a guaranteed death benefit.
Putting an IUL on a newborn for 100 a month can set the child up for life.
Happy to help with your 401k. PM if you would like information.
Although there are many decent ideas in the thread, like boats, there is not a ‘one size fits all’ for financial advice.
Thanks for your reply and honest opinion.
Like others have said here, retirement planning is a very personal and specific type of planning. Giving a simple yes or no answer isn't real helpful. Though a lot of individuals do a great job in the accumulation phase there are few that do well in the distribution phase without some sort of actual plan. It doesn't mean you need a Financial Advisor or Financial Planner to complete a plan but it will simplify the process. To start, you need to take your current budget (if you don't have one create one) then you need to think about your future budget needs. What I don't see discussed here much is the rates of inflation for different budget items and how it differs throughout retirement. So you may want figure that into your plan. Health care has a much higher inflation rate compared to say entertainment. So you may go through several different tax brackets once you retire, same tax bracket when you first retire because you are taking all those vacations that you never had the time to take when you were working. Then once you slow down maybe you are in a lower tax bracket. Maybe one or several years you are in a higher tax bracket because of health care costs.
We really don't know what is going to happen in the future but we can try to plan for it as best as possible. In retirement, I will probably use all of the different retirement savings vehicles such as tax-deferred, pre-tax and tax free. I will also try to be as tax efficient as possible. What I really like about the Roth is that you have control over it and it can help lower the double taxation that we may experience when we receive our social security in retirement. A portion of our Social Security income in retirement can be included in our taxable income if our income hits certain levels. So if we make distributions from our tax-deferred or pre-tax accounts first up until our desired level or tax bracket, then make a distribution from the Roth there will be no taxes or less taxes due. However, If someone only used a Roth to fund their retirement it wouldn't be as tax efficient as the previous scenario since we would effectively be losing (or not using) our tax write-offs/standard deductions and/or passive loses.
I do most of my investing after tax.
401k maxed to the company match before tax. Roth and Traditional IRA's after tax.
The idea that the money is tax deferred is nice, until the SHTF and you need to do an early withdrawal. Then you get hammered for the deferred tax and 20% penalty. I never liked that possibility.
For the most part, I invested privately with low cost brokers and took the certificates with companies that had re-investment programs. Then did additional purchases with dividend re-investment or outright purchases direct. One has to research which companies to dividend re-invest and direct purchase/sales programs. Watch the market and make your play with the down market and cash out on the up.