Great video with some great information. I do traditional and Roth 401(k) with my employer up until their match ends. And additionally I max out a Roth IRA each year as well. The next time you redo this video, I think you should mention the fact that the Roth 401(k) limits your investment options to what your employer makes available. What I really like about my Roth IRA is that I can invest it in whatever index funds or stocks or whatever I want. I think that that is truly worth mentioning. Also, if there is no employer match and someone is only investing $7000 or less I believe it to also be a better investment vehicle. Thanks again for your time and information. I truly appreciate it.
I think the real question is which one should you prioritize, as you might be able to do both (especially with backdoor roth option). Generally I think it's roth 401k for company match and erisa protection, and rule of 55.
@@HookemFishing I often hear people call it free money. But in all actuality, it’s not free because no one else gets it. You’re working for it and if you don’t take it, you’re not receiving your full pay. Meaning you’re working for less than your employer will pay you. That’s even worse.
@@tomvermeulen1082 Great perspective, yes. This is true. Fact, when my company sends me end of year cumulative benefits summary, it confirms what you just said.
Question: I have a Roth 401k at work. I also have 2 separate Roths and 1 traditional ira in a outside account at one of the major brokerages. I'm over 50. I know you can contribute 8k per year. The part that is confusing me is, doesn't the work Roth 401k fall under the 8k limit with all my OUTSIDE accounts combined? OR DOES THAT FALL UNDER SEPARATE CATEGORIES. I WAS INFORMED ALL YOUR ROTHS AND TRADITIONAL IRAS CANNOT EXCEED 8K PER YEAR. I called a tax professional they state that's true. The Irs charges a 6% penalty if you over contribute.
In my scenario I've hit the income limit and not eligible to contribute to my Roth IRAs so I've been using the traditional 401k route. Luckily I found you video so it sounds like I should be able to us my company's 401k Roth option. You mentioned the contribution limit is $23k which sounds just like the limit on the traditional 401k. Are these limits mutually exclusive?
You can always contribute to a Roth IRA, either directly or back-door (unless you have no W-2 EIC). The only caveat would be if you have a large IRA balance, there may be tax consequences.
I wouild say Roth 401K in your working years then roll it over to a Roth IRA in retirement. My 401K charges 55 basis points every year and my Roth IRA charges 0 basis points. My 401K doesn't allow qualified withdraws until after 65 and has fees for withdraws when do you. The investment choices are also terrible. I can't wait to roll over this account.
I have a 401k traditional IRA and a 401k ROTH IRA I'm 60 years old. Can I open another IRA and ROTH IRA with a financial institution and have them both so I can roll over from my 401k traditional into my other IRA?
I’m 52 and investing for the first time in my life. I have started contributing to my 401K and opened a Roth IRA with automatic contributions, but my question is, does asset allocation really matter at first, or perhaps I am just overthinking as a beginner?
I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit the time to analyze stocks myself. I got fully invested since the covid-outbreak, and thankfully, my 6 figure portfolio has 5X in barely 5 years, amassing nearly $1m as of today.
good gains! who is the professional guiding you please? enthused about investing for my eventual retirement but dont know how to go about it, for now I only invest in my 401k through my employer and gains are quite slow
Rebecca Lynne Buie is my FA. Just google the name and you’d find necessary deeds to work with. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
I'm convinced that investing 50k-100k in the right company before it goes big is more important than saving for retirement. However, picking the right company is so hard. I have around 200k in a HYSA and want to invest it. What are the best opportunities now?
I believe investors should start with S&P 500/ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I have stuck with the popularly ‘’Celia Kathleen Martel” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
Agreed, I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has 5X in barely 5 years, summing up nearly $1m as of today.
I take guidance from a Montana-based advisor ''Katherine Nance Dietz'' To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
thanks for putting this out, curiously inputted Katherine Nance Dietz on the web, spotted her consulting page and was able to schedule a call session, she actually shows a great deal of expertise.
Am I missing something? Here is my assumption, at current working with high income and high income tax at 30%; however, at retirement, the income is lower and income tax is at 20%. With those assumptions, if I set aside $1,000 for retirement and invest with 6% return. At 20 year later, for regular 401K and $1,000 investment, I should get $3,207. At withdraw and pay 20% income tax, I would take home $2,566. If I choose Roth 401K, I have to pay 30% tax of $1,000. Therefore, I only have $700 for retirement investment. At 20 year later and 6% return, when I withdraw (with no income tax), I would get $2,245. Based on this math, it looks like Traditional 401K is better than Roth 401K ($2,566 versus $2,245). If people think that their overall income at retirement is lower and their income is lower compared to while they are working, maybe traditional 401K get a better return than Roth 401K. Am I missing something in my calculations?
I believe you’re right and are not missing anything. I didn’t thoroughly look through your calculations. Though, as I’ve been TH-cam researching, I understand many other sources say if you expect your income (and resulting tax bracket) to be lower in retirement than it is while you’re contributing to your retirement accounts (like 401K’s and/or IRA’s) then Traditional is better for you than Roth due to the reasons you stated above. (You’d be paying less taxes proportionally in retirement than you would be now, even with the fact that you’ll be taxed on your investment earnings when withdrawn)
I've done extensive study on this. Yes go with the Roth 401k first. No income restriction and can't leave free company matching off the table. The Roth IRA has the advantage of contribution withdrawal at anytime. The Roth IRA has the backdoor and mega backdoor A 401(k) is an ERISA-qualified plan, so it is likely protected if you get sued. This includes rollover dollars from other 401k but has not roll into new 401k.
Thank you for expanding my understanding of personal finance and investment. I recently subscribed to your channel. I'd like to express my appreciation to everyone working diligently to earn a living and accumulate wealth during this recession. My husband and I are both retired and debt-free, and we're being prudent and frugal with our finances. Despite the recession, we continue to generate passive income through our savings and investments in the financial market. This investment-focused lifestyle has allowed us to receive a consistent monthly income through passive means, for which we are truly grateful
Great video with some great information. I do traditional and Roth 401(k) with my employer up until their match ends. And additionally I max out a Roth IRA each year as well. The next time you redo this video, I think you should mention the fact that the Roth 401(k) limits your investment options to what your employer makes available. What I really like about my Roth IRA is that I can invest it in whatever index funds or stocks or whatever I want. I think that that is truly worth mentioning. Also, if there is no employer match and someone is only investing $7000 or less I believe it to also be a better investment vehicle. Thanks again for your time and information. I truly appreciate it.
Loving the Roth 457 my work has. The moment it was allowed, I switched 100% of my contributions to the Roth.
59 1/2?? I thought we could walk away at 55 if we've worked at the same company for x amount of years?
I think the real question is which one should you prioritize, as you might be able to do both (especially with backdoor roth option). Generally I think it's roth 401k for company match and erisa protection, and rule of 55.
Right. Matching is free money. Must have that first.
@@HookemFishing I often hear people call it free money. But in all actuality, it’s not free because no one else gets it. You’re working for it and if you don’t take it, you’re not receiving your full pay. Meaning you’re working for less than your employer will pay you. That’s even worse.
@@tomvermeulen1082 Great perspective, yes. This is true. Fact, when my company sends me end of year cumulative benefits summary, it confirms what you just said.
Question: I have a Roth 401k at work. I also have 2 separate Roths and 1 traditional ira in a outside account at one of the major brokerages. I'm over 50. I know you can contribute 8k per year. The part that is confusing me is, doesn't the work Roth 401k fall under the 8k limit with all my OUTSIDE accounts combined? OR DOES THAT FALL UNDER SEPARATE CATEGORIES. I WAS INFORMED ALL YOUR ROTHS AND TRADITIONAL IRAS CANNOT EXCEED 8K PER YEAR. I called a tax professional they state that's true. The Irs charges a 6% penalty if you over contribute.
Q1 No. You may contribute $30,500 to your 2024 Roth 401(k) and $8,000 to your 2024 Roth IRA.
I max both
In my scenario I've hit the income limit and not eligible to contribute to my Roth IRAs so I've been using the traditional 401k route. Luckily I found you video so it sounds like I should be able to us my company's 401k Roth option. You mentioned the contribution limit is $23k which sounds just like the limit on the traditional 401k. Are these limits mutually exclusive?
Your Roth 401(k) contribution + your traditional 401(k) contribution may not exceed $23,000 for 2024.
You can always contribute to a Roth IRA, either directly or back-door (unless you have no W-2 EIC). The only caveat would be if you have a large IRA balance, there may be tax consequences.
I wouild say Roth 401K in your working years then roll it over to a Roth IRA in retirement. My 401K charges 55 basis points every year and my Roth IRA charges 0 basis points. My 401K doesn't allow qualified withdraws until after 65 and has fees for withdraws when do you. The investment choices are also terrible. I can't wait to roll over this account.
I have a 401k traditional IRA and a 401k ROTH IRA I'm 60 years old. Can I open another IRA and ROTH IRA with a financial institution and have them both so I can roll over from my 401k traditional into my other IRA?
You can have traditional 401(k), Roth 401(k), traditional IRA and Roth IRA. There is no "401k traditional IRA" nor "401k Roth IRA".
I’m 52 and investing for the first time in my life. I have started contributing to my 401K and opened a Roth IRA with automatic contributions, but my question is, does asset allocation really matter at first, or perhaps I am just overthinking as a beginner?
There’s a lot to decide on… most times it is better as a beginner to delegate your day-to-day investing to a well experienced advisor
I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit the time to analyze stocks myself. I got fully invested since the covid-outbreak, and thankfully, my 6 figure portfolio has 5X in barely 5 years, amassing nearly $1m as of today.
good gains! who is the professional guiding you please? enthused about investing for my eventual retirement but dont know how to go about it, for now I only invest in my 401k through my employer and gains are quite slow
Rebecca Lynne Buie is my FA. Just google the name and you’d find necessary deeds to work with. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I'm convinced that investing 50k-100k in the right company before it goes big is more important than saving for retirement. However, picking the right company is so hard. I have around 200k in a HYSA and want to invest it. What are the best opportunities now?
I believe investors should start with S&P 500/ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
The issue is most people have the "I want to do it myself mentality" but not equipped enough for a crash, hence get burnt, no offense. In general, Financial Consultants are ideal reps for investing jobs, and at firsthand encounter, since Jan.2020, amidst covid outbreak, my portfolio has yielded massively in ROI, summing up to 7-figures as of today.
I'm intrigued by this. I've searched for financial advisors online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I have stuck with the popularly ‘’Celia Kathleen Martel” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.
consider financial advisory so you don’t keep switching it up... those sound like great picks anyways, not bad for 350k
Agreed, I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has 5X in barely 5 years, summing up nearly $1m as of today.
I take guidance from a Montana-based advisor ''Katherine Nance Dietz'' To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
thanks for putting this out, curiously inputted Katherine Nance Dietz on the web, spotted her consulting page and was able to schedule a call session, she actually shows a great deal of expertise.
Can I contribute to both a Roth IRA and a Roth 401k at the same time?? Maxing out both ($30k (401k) & $7k (IRA) )
Under 50 you may contribute $23k to Roth 401(k) and $7k to Roth IRA.
Can you have both Roth 401k and Roth IRA at the same time?
Absolutely
Yes... but go Roth 401k first if your company matching. The matching goes to IRA portion of 401k.
Am I missing something? Here is my assumption, at current working with high income and high income tax at 30%; however, at retirement, the income is lower and income tax is at 20%. With those assumptions, if I set aside $1,000 for retirement and invest with 6% return. At 20 year later, for regular 401K and $1,000 investment, I should get $3,207. At withdraw and pay 20% income tax, I would take home $2,566. If I choose Roth 401K, I have to pay 30% tax of $1,000. Therefore, I only have $700 for retirement investment. At 20 year later and 6% return, when I withdraw (with no income tax), I would get $2,245. Based on this math, it looks like Traditional 401K is better than Roth 401K ($2,566 versus $2,245). If people think that their overall income at retirement is lower and their income is lower compared to while they are working, maybe traditional 401K get a better return than Roth 401K. Am I missing something in my calculations?
I believe you’re right and are not missing anything.
I didn’t thoroughly look through your calculations. Though, as I’ve been TH-cam researching, I understand many other sources say if you expect your income (and resulting tax bracket) to be lower in retirement than it is while you’re contributing to your retirement accounts (like 401K’s and/or IRA’s) then Traditional is better for you than Roth due to the reasons you stated above. (You’d be paying less taxes proportionally in retirement than you would be now, even with the fact that you’ll be taxed on your investment earnings when withdrawn)
I've done extensive study on this.
Yes go with the Roth 401k first. No income restriction and can't leave free company matching off the table.
The Roth IRA has the advantage of contribution withdrawal at anytime.
The Roth IRA has the backdoor and mega backdoor
A 401(k) is an ERISA-qualified plan, so it is likely protected if you get sued. This includes rollover dollars from other 401k but has not roll into new 401k.
I need the entire 401k deduction to keep me out of the next higher tax bracket. In my case, the ROTH 401k doesn't work for me.
Thank you for expanding my understanding of personal finance and investment. I recently subscribed to your channel. I'd like to express my appreciation to everyone working diligently to earn a living and accumulate wealth during this recession. My husband and I are both retired and debt-free, and we're being prudent and frugal with our finances. Despite the recession, we continue to generate passive income through our savings and investments in the financial market. This investment-focused lifestyle has allowed us to receive a consistent monthly income through passive means, for which we are truly grateful