Hi Dream! Very interesting topic, I am also contributing to my 401K, employer also provides 100% match till 5%, which I love. Although, I get that pension would have been better than any 401K plan, but I am willing to settle in for the next best thing. Plus, I am also maxing out my Roth IRA every year, so will hopefully have some taxable 401K and then tax free money in Roth IRA form in my retirement. Can’t rely on Social Security at all at this point.
I don’t think I can agree with you on the pension always being the best option. My company has 100 percent matching at 8.4 percent and has increased over the last 20 years. If companies value your retirement and set you on a good track then I’d have to say that the 401 is better. Someone starting with my company at 18-25 will be very well positioned at 55 if they take advantage of it.
@@bbkyjohnson 100% match on 8.5% is honestly unheard off. I respect your opinion, good luck! But I am a firm believer that pension does take the stress out of market volatility in addition to limitations on 401K securities. A blend of everything would have been better haha.
Cannot borrow against 401k if not employed. Often if you have borrowed against your 401k and leave your job you must pay back the loan immediately or it will be treated as a distribution (subject to tax and possibly penalty).
The US does many things great, but taxation is not one of them. Why complicate things? In my jurisdictions of Australia and Hong Kong there are untaxed mandatory employer contributions (some companies top that up), pretax employee contributions and... get this... withdrawals are tax free! If the point is to reduce future government expenditures (and make no mistake, it is) a government should make retirement funds worthwhile and simple to understand. The numeric and alphabet soup of retirement accounts in the US is unnecessarily complicated and off putting.
Agree 1000%. I've said for years, that it seems all we really need are pre-tax and after tax, and allow employers to contribute. No need for separate individual and workplace sponsored and no need for all the different variety of workplace sponsored depending on type of workplace. But this is all part of the tax code, and our elected government loves making the tax code complicated so they can sneakily treat their friends and punish their enemies.
It all depends on your income and employer match. Always contribute up to your employer march first. Then go max out your Roth. Then come back snd max out your 401k if you can. Beyond that, it's the taxable brokerage. You can also do an HSA if you're a gambling person.
My company has a 8% match and it's good for young people who are not thinking about retirement yet but you can find better retirement options out there
I will say that it can be a scam depending on how it was handled. Our 401ks were automatically invested with some roboadvisor that charged fees and probably gave returns half as good as S&P 500. 401ks need to automatically go towards a little to no fee target date fund at least.
i thought i was smarter than a 401k early in my career. i would have loved to dca into the market at that time instead of daytrading through the gfc. i still see that empty account in fidelity to remind of how dumb i was.
Well… you’re on the right track now! Saving something is better than nothing, and asset allocation. But asset location is also important, as we can see here
Hmmm... Something to think about. It's definitely not a scam, but more knowledge is needed on pre-tax or post-tax based on earnings. Thanks, as always, for including facts.
How do you decide whether its worth maxing RRSP as a high income earner? I already max my TFSA and RRSP and also have a 6% employer match. I also have a sizable taxable margin account (that has more than tfsa and rrsp combined). Can you go through the math to see if its worth it to me to contribute more to rrsp beyond the match?
This is easy for everyone watching this video a 401 k sucks …for everyone else 401k is this most effective way to invest for retirement…the 401k should be required from every employer…it’s that important…
Why are claiming a max roth contribution of $23,000? It's 7. You just lost all credibility. You're taking a chance that the employer contributions cover future tax increases. I suspect it's greater than 3% when I retire, which equates to a scam.
Not a scam but absolutely need other buckets , Roth, HSA, Individual account
Hi Dream!
Very interesting topic, I am also contributing to my 401K, employer also provides 100% match till 5%, which I love. Although, I get that pension would have been better than any 401K plan, but I am willing to settle in for the next best thing. Plus, I am also maxing out my Roth IRA every year, so will hopefully have some taxable 401K and then tax free money in Roth IRA form in my retirement. Can’t rely on Social Security at all at this point.
Agree 👍 just being aware of all the different choices is half the battle, and lining it up to your financial goals is key 🔑 ✅
I don’t think I can agree with you on the pension always being the best option. My company has 100 percent matching at 8.4 percent and has increased over the last 20 years. If companies value your retirement and set you on a good track then I’d have to say that the 401 is better. Someone starting with my company at 18-25 will be very well positioned at 55 if they take advantage of it.
@@bbkyjohnson Sounds like an amazing set up for you! Congrats
@@bbkyjohnson 100% match on 8.5% is honestly unheard off. I respect your opinion, good luck!
But I am a firm believer that pension does take the stress out of market volatility in addition to limitations on 401K securities. A blend of everything would have been better haha.
Don’t forget your 401k are protected funds against creditors, and if you need to, you may borrow against your 401k.
Good comment! Definitely an asset, whether pre or after tax 😉
Cannot borrow against 401k if not employed. Often if you have borrowed against your 401k and leave your job you must pay back the loan immediately or it will be treated as a distribution (subject to tax and possibly penalty).
I have a pension, 457B (NO match), and Roth and taxanle.
My husband has 401K, Roth,
and taxable.
Sounds like you’re in good shape! 💎✨
The US does many things great, but taxation is not one of them. Why complicate things? In my jurisdictions of Australia and Hong Kong there are untaxed mandatory employer contributions (some companies top that up), pretax employee contributions and... get this... withdrawals are tax free!
If the point is to reduce future government expenditures (and make no mistake, it is) a government should make retirement funds worthwhile and simple to understand. The numeric and alphabet soup of retirement accounts in the US is unnecessarily complicated and off putting.
Great comment. I agree we should simplify not continue to complicate 👌
Agree 1000%. I've said for years, that it seems all we really need are pre-tax and after tax, and allow employers to contribute. No need for separate individual and workplace sponsored and no need for all the different variety of workplace sponsored depending on type of workplace.
But this is all part of the tax code, and our elected government loves making the tax code complicated so they can sneakily treat their friends and punish their enemies.
It all depends on your income and employer match. Always contribute up to your employer march first. Then go max out your Roth. Then come back snd max out your 401k if you can. Beyond that, it's the taxable brokerage. You can also do an HSA if you're a gambling person.
lol great comment! Thanks 🙏- DREAM
This topic is so needed!
Felt the tsunami 🌊 of comments with no real insight or explanation. So I went looking for it! 😉…as usual 💎✨
My company has a 8% match and it's good for young people who are not thinking about retirement yet but you can find better retirement options out there
Agree! It's a great starting place
I will say that it can be a scam depending on how it was handled. Our 401ks were automatically invested with some roboadvisor that charged fees and probably gave returns half as good as S&P 500. 401ks need to automatically go towards a little to no fee target date fund at least.
i thought i was smarter than a 401k early in my career. i would have loved to dca into the market at that time instead of daytrading through the gfc. i still see that empty account in fidelity to remind of how dumb i was.
Well… you’re on the right track now! Saving something is better than nothing, and asset allocation. But asset location is also important, as we can see here
Hmmm... Something to think about. It's definitely not a scam, but more knowledge is needed on pre-tax or post-tax based on earnings. Thanks, as always, for including facts.
You’re welcome! Must be open minded enough to listen 🎧 even if it challenges old thinking - DREAM
My company still does a pension and a 401K with a 6% match.
That’s an awesome gig you got there!
@@thedividenddream insurance company where the cross is blue.
How do you decide whether its worth maxing RRSP as a high income earner?
I already max my TFSA and RRSP and also have a 6% employer match. I also have a sizable taxable margin account (that has more than tfsa and rrsp combined).
Can you go through the math to see if its worth it to me to contribute more to rrsp beyond the match?
This is easy for everyone watching this video a 401 k sucks …for everyone else 401k is this most effective way to invest for retirement…the 401k should be required from every employer…it’s that important…
There are many variations, and that’s the message. 👌 Pick the one that’s right for the individual, with open eyes ✅
Why are claiming a max roth contribution of $23,000? It's 7. You just lost all credibility. You're taking a chance that the employer contributions cover future tax increases. I suspect it's greater than 3% when I retire, which equates to a scam.
401k max is $23k for 2024, not Roth ✅