When I was working I used the 401K in order to get the match. I did not like the small amount of funds offered in the plan but the 20% match made the difference.
Roth conversions may be very appropriate even if planning to spend that money in the short term. First, everyone should open a Roth ASAP to start the 5 year forever clock. One may find it beneficial to do a Roth conversion before retiring while tax rates are on sale. Then, withdraw from the Roth before Medicare to earn ACA tax credits. As a retiree, I annually convert my expected cash flow needs from traditional IRA to my Roth early in year and then withdraw monthly from the Roth. The annual earnings on the converted money is tax free instead of tax deferred had I just withdrawn monthly from the traditional IRA.
I have a lot more money in my traditional 401(k) than in my Roth 401(k) and my Roth IRA. I intend to transition most of that to a traditional IRA after retirement, and then use the time between retirement and taking Social Security to convert some to the Roth IRA.
Do not listen to anyone telling you to work on beyond 67. I hit my 35 years of national insurance contributions when I was 55. I'd prepared my path ten years earlier. I invested (£95k with the help of my Fa). We sold up in the UK at 55 and have lived on the proceeds since then. I have a private pension which started aged 60. My full State Pension finally starts in 3 weeks (I plan on investing it all for my grandkids secret nest egg) Every day is absolutely amazing. Don't work a day longer than you have to. The clock is ticking. We are not slaves to the system. No Government can tell you when to stop. Go find your own freedom.
So what does it say about me if I don't have any of the retirement accounts you discussed. I never worked anywhere that had a 401K or 403B. I have been retired for a while so the amount of money I could have contributed to an IRA or Roth IRA was trivial so I didn't ever contribute to either. The only retirement specific account I have is a traditional pension. Everything else is in after tax accounts. One benefit of this approach,is that should I want to spend a chunk of money, say a million or so for a new yacht, I can do so without any tax consequences.
Nice introduction to fairly complicated topics. Before I add a comment, may I politely suggest you invest in a good microphone ? You voice is in an echo chamber. It is hard to listen. Comment about Roth: No one has a crystal ball how their work career will play out until they reach the end. Those that choose Roth and end up having a lucrative and long work career may save some taxes, but those who chose Roth early and their career did not go as planned end up over paying taxes. This is not a zero sum game because the consequences of overpaying are much more severe than maybe paying more taxes from a fat account. If I may be blunt, this aspect of early Roth is opaque to you because your profession selects for those who came up on top. Full disclaimer: I came out on top, but I was aware of the trade-off from an early age and chose accordingly.
When I was working I used the 401K in order to get the match. I did not like the small amount of funds offered in the plan but the 20% match made the difference.
Roth conversions may be very appropriate even if planning to spend that money in the short term. First, everyone should open a Roth ASAP to start the 5 year forever clock. One may find it beneficial to do a Roth conversion before retiring while tax rates are on sale. Then, withdraw from the Roth before Medicare to earn ACA tax credits. As a retiree, I annually convert my expected cash flow needs from traditional IRA to my Roth early in year and then withdraw monthly from the Roth. The annual earnings on the converted money is tax free instead of tax deferred had I just withdrawn monthly from the traditional IRA.
In my position, the ROTH 401K with an employer match is the best.
I have a lot more money in my traditional 401(k) than in my Roth 401(k) and my Roth IRA. I intend to transition most of that to a traditional IRA after retirement, and then use the time between retirement and taking Social Security to convert some to the Roth IRA.
Do not listen to anyone telling you to work on beyond 67. I hit my 35 years of national insurance contributions when I was 55. I'd prepared my path ten years earlier. I invested (£95k with the help of my Fa). We sold up in the UK at 55 and have lived on the proceeds since then. I have a private pension which started aged 60. My full State Pension finally starts in 3 weeks (I plan on investing it all for my grandkids secret nest egg) Every day is absolutely amazing. Don't work a day longer than you have to. The clock is ticking. We are not slaves to the system. No Government can tell you when to stop. Go find your own freedom.
Audio is really bad on this one!.
Yeah! Sorry, the mic cable was messed up.
Invest in a microphone
So what does it say about me if I don't have any of the retirement accounts you discussed. I never worked anywhere that had a 401K or 403B. I have been retired for a while so the amount of money I could have contributed to an IRA or Roth IRA was trivial so I didn't ever contribute to either. The only retirement specific account I have is a traditional pension. Everything else is in after tax accounts. One benefit of this approach,is that should I want to spend a chunk of money, say a million or so for a new yacht, I can do so without any tax consequences.
Nice introduction to fairly complicated topics.
Before I add a comment, may I politely suggest you invest in a good microphone ? You voice is in an echo chamber. It is hard to listen.
Comment about Roth: No one has a crystal ball how their work career will play out until they reach the end. Those that choose Roth and end up having a lucrative and long work career may save some taxes, but those who chose Roth early and their career did not go as planned end up over paying taxes. This is not a zero sum game because the consequences of overpaying are much more severe than maybe paying more taxes from a fat account.
If I may be blunt, this aspect of early Roth is opaque to you because your profession selects for those who came up on top. Full disclaimer: I came out on top, but I was aware of the trade-off from an early age and chose accordingly.