I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collaborative efforts in the fund my estate planner has me invested in. I do not work.
I only contribute 5% to get full company match, that’s it. The 401K plan is designed for you to work until you are about dead. Also, the government does not have their hands on it yet either.
My wife and I live off of our 401K. We don't work. I recommend highly to everyone to build your 401K or Roth IRA's as an alternate revenue stream in retirement to your Social Security. An observation on 401K's is when it gets over 300K it starts to accelerate. When you get over 500K it can really accelerate as the stock market grows.
I've stuck with ‘’Julianne Iwersen Niemann” for about 9 years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
I max my Roth IRA every year. My second two jobs have Roth 401(k)'s I put the max allowed per check (one allows all and the other allows 75%). I put up to the match on my main job into a pretax 403(b) (that's 2%). Near the end of the year, if I haven't put in enough to do the maximum contribution, I up my pretax 403(b) the get to the maximum. Yes, I have three jobs.
Is there a difference in the class of mutual fun shares available in Roth IRAs vs Roth 401(k)s and 403(b)s? My Roth IRA and Roth 403(b) are with different companies. It feels like I'm seeing a lot more fees with the Roth 403(b) company.
Has there been any change to employer matches being allowed to be ROTH funds? I know it was passed under secure 2.0 but as far as I know I'm being told there's still no federal guidelines on how employers are to accomplish this yet so employers are reluctant to do anything. What do you know about the situation? Thanks.
I've looked on the IRS website, and from what I understand, you must count company matching as additional income. It should be reported on a 1099-R I believe, and you might need to make adjustments to your W4 to have additional withholding that will cover it.
And that assumes your employer is willing to contribute to your Roth 401k even if the ITS says they can. The company can’t claim their Roth contributions as a tax deduction, while the traditional 401k contribution from an employer can be deducted on the company’s taxes. My employer has refused to contribute their match on the Roth side of my 401k for this reason. Bummer!
@@MrThunderbumper Think your company is misleading you with a seemingly plausible excuse simply because they don't hassle of new software to implement company 401(k) match as Roth. Roth match works as follows: they provide traditional 401(k) match (so they still get tax write off) as before and then you pay the tax to make it Roth. For example company match 5% on your 5% contribution which is $100 and 20% tax bracket so you contribute $100 (post tax) to Roth. $100 post tax is ($100 / 0.80 =) $125 pretax income needed for $100 Roth contribution $125 pretax income = ($125 * 0.80 =) $100 Roth 401(k)contribution + $125 tax you pay $125 pretax income = $100 company match + $125 tax you pay which then makes that $100 match as Roth 401(k)
@@MrThunderbumper I spoke with a plan specialist (read: not a tax advisor) with T. Rowe Price who indicated that for them, the account between a Roth 401k and a normal 401k is the exact same, it just depends whether you contribute with pre and post-tax dollars. She also indicated that they company contributions are the exact same, and that a Roth conversion would need to be made after the funds are deposited; she didn't explain that process in detail. I assume you'd have to go to the broker, ask for the conversion, and they'd issue the tax info on a 1099-R at the end of the year.
I have 401k and 401k Roth with my employer. Contributed to the pre-tax for about 10-12 years, then started contributing to both. As of now the balance of everything is broke down like this.. 82% is in pre-tax and 18% is in Roth. Contributing now at 8% Roth and 4% Pre Tax....I'm 52 and planning about 10 years left to work. How should i proceed? Ideas? Thoughts? Thank you.
I’m in the same boat. My employer only started a Roth 401k 2 years ago. So the bulk of my 401k is pre-tax. I’m doing fully Roth 401k because the company match only goes to the pre-tax bucket. So about 25% of my total contributions is going pretax whether I want it to or not. So I’m already getting the tax diversification. Based on what you said I’d go full Roth 401k because of all the pretax you already have. Especially now while tax rates are low. If they revise up in 2026 than you may want the pretax tax break.
@@SurpassMoney Good information. But even though you put it all in Roth, they still do the match it just goes into pretax? I wonder if it’s the same with my employer…Thank you.
@@turner111971 Favor contributing to Roth 401(k) when in relatively low tax bracket and favor contributing to traditional 401(k) when in relatively high tax bracket. If you're at your highest income and don't expect to reach next higher tax bracket, then as default favor traditional 401(k) contribution. At 52 aim to max contributing $31k year. For tax diversification $8,000 to Roth IRA.
Ha. It’s a quote from the movie Moneyball. It’s about just getting on base and acting runs. Not swinging for the fences to hit a home run. Same applies to investments. Make easy investments and shoot for 10% or so and be careful swinging for the fences hoping for 1000% on the next long short startup or crypto.
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?
With the traditional 401K, the RMDs are based on your total Traditional 401K Balance. As everyone will be different, the 401K balance can be substantial… ie 1M, 2M+…thus the RMDs may be much greater than what you need. In your example you are using maybe an exact amount for comparison. Potentially look at what your 401K balance may be and look at an RMD chart. The required RMD may be very substantial. High RMDs can then trigger Medicare Premium surcharges (IRMAA), social security calculations. Remember RMDs are not what you need to withdraw but what the IRS/government is stating you need to withdraw.
Mark, my IUL, with the index I'm using, is one part of my overall retirement strategy. Your use of the word "Better" is subjective at best. Among other reasons, I do value my IUL because it won't lose value during market downturns. The worst my contract allows for is a positive 1/4% rather than losing like the IRA's and 401Ks have with my friends and some family. True, theirs were not self directed, and that makes a big difference. However, they're not the kind of people who want to manage their retirements, rather simply enjoy retirement. When their retirements took huge hits, I did not, and that is "Better" for me to not lose money. Great job on everything else though Mark:)
What happens if u pass away at 60 and have all the money invested in that. Don’t u lose that invested money and your family only gets your life insurance policy? So they could possibly lose a lot of money? I was told that’s a bad bet.
@@gusjaramill0 Wow, that vid was from a year ago. Yes, the policy has true living benefits, which is one of the reasons I chose it, even if the term option also had them.
@@drock5108 Lord, that video was from a year ago. Didn't know anyone took the time to look at comments a year old. There are two options if a person dies early, rather than living too long or getting very sick in the middle. One, they only get the death benefit if that option best meets their specific needs. Or, they can get both the death benefit and the cash value that's built up. It's merely a function of what best meets their needs. It's nice to have that flexibility and to even change it at some future point as well. Lots of people may tell you a lot about what they don't understand, often due to only looking at the surface level rather than unpacking a situation to gain a thorough understanding. It happens all the time:)
Yes, a minor needs to have earned income. Do you own a business or have a side hustle? Are you paying your kids for working in your business? If not, we can help you get this going.
A 401k is a retirement plan offered by your employer An IRA is something you set up by yourself by going to a company like Vanguard or Fidelity or ETrade and setting up an account.
Can I take 25k in my 401k and roll it into my roth IRA in one year I make less than $150,000 a year married. I'll be fine with paying taxes I just want to get more money in my IRA in one year than the 7,000 limit. I want to try and put like $50,000 in my Roth IRA one year. But this is money that's already been taxed.
You have until tax day (typically April 15) 2025 to contribute $7,000 to your 2024 Roth IRA; spouse may do likewise $7,000 for 2024 Roth IRA. You both may contribute $7,000 to 2025 Roth IRAs. That's ($7k * 4 =) $28,000 in Roth IRAs in one year.
@@markforsythe1916 Income limit for *_direct_* contribution of $7,000 to Roth IRA is $236,000 MAGI Married Filing Jointly. 1. Are you making over $236k MAGI MFJ? 2. Do either of you have traditional IRA balance?
I kinda disagree with this show because the 401k or Roth from your employer is also before taxes so what's the point at the end you will still have to pay taxes on they.😐
There's no choice. If you have the opportunity for 401k. Roth or regular, that's what you use. A higher max and more chance of matching. That being said, number 1 is an HSA. Max that first!
How did your client get to 300 million Roth IRA? The maximum each year started at like 2k in 1997, and max is 8k if over 50yrs old? Who is his Financial Advisor?? I dont think the stock market has done that good in less than 30 yrs...
He self-directed his ira into real estate and new businesses. Not the stock market. Similar to Peter Thile if you want to look up how he grew his account to $5B (invested into Facebook way before it went public). Now these are not ordinary or normal results but the point is you don’t have to invest your Roth IRA solely into the stock market. You can invest in non-publicly traded assets too.
@MatSorensen thank you!! Me at 49, I have a employer sponsored 401k and that's its. And zero knowledge on how to invest in stock market. I started a Roth IRA about a month ago, but not sure I have time to see real gains at 7/8k a year going forward. And don't know if I need to buy penny stocks or Berkshire A class... 🤣😂
@@deal492 You have until tax day (typically April15) 2025 to contribute $7,000 to your 2024 Roth IRA. If you turn 50 this year you may contribute $8,000 to your 2025 Roth IRA.
I am 53 and retired at 50. 1 thing I did do to retire early was to get out of the 401K and IRA programs. Bought rental real-estate and I am now a Limited Partner in about 1500+ units from collaborative efforts in the fund my estate planner has me invested in. I do not work.
I only contribute 5% to get full company match, that’s it. The 401K plan is designed for you to work until you are about dead. Also, the government does not have their hands on it yet either.
My wife and I live off of our 401K. We don't work. I recommend highly to everyone to build your 401K or Roth IRA's as an alternate revenue stream in retirement to your Social Security. An observation on 401K's is when it gets over 300K it starts to accelerate. When you get over 500K it can really accelerate as the stock market grows.
If I may ask, as in withdrew all of the money from the 401K and IRA programs? If so, what was your strategy behind that decision? Thank you.
I've stuck with ‘’Julianne Iwersen Niemann” for about 9 years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Found her online page by searching her full name, I wrote her an email and scheduled a call, hopefully she responds.
I max my Roth IRA every year.
My second two jobs have Roth 401(k)'s I put the max allowed per check (one allows all and the other allows 75%). I put up to the match on my main job into a pretax 403(b) (that's 2%). Near the end of the year, if I haven't put in enough to do the maximum contribution, I up my pretax 403(b) the get to the maximum. Yes, I have three jobs.
Is there a difference in the class of mutual fun shares available in Roth IRAs vs Roth 401(k)s and 403(b)s? My Roth IRA and Roth 403(b) are with different companies. It feels like I'm seeing a lot more fees with the Roth 403(b) company.
Has there been any change to employer matches being allowed to be ROTH funds? I know it was passed under secure 2.0 but as far as I know I'm being told there's still no federal guidelines on how employers are to accomplish this yet so employers are reluctant to do anything. What do you know about the situation?
Thanks.
I've looked on the IRS website, and from what I understand, you must count company matching as additional income. It should be reported on a 1099-R I believe, and you might need to make adjustments to your W4 to have additional withholding that will cover it.
And that assumes your employer is willing to contribute to your Roth 401k even if the ITS says they can. The company can’t claim their Roth contributions as a tax deduction, while the traditional 401k contribution from an employer can be deducted on the company’s taxes.
My employer has refused to contribute their match on the Roth side of my 401k for this reason. Bummer!
@@MrThunderbumper Think your company is misleading you with a seemingly plausible excuse simply because they don't hassle of new software to implement company 401(k) match as Roth. Roth match works as follows: they provide traditional 401(k) match (so they still get tax write off) as before and then you pay the tax to make it Roth. For example company match 5% on your 5% contribution which is $100 and 20% tax bracket so you contribute $100 (post tax) to Roth. $100 post tax is ($100 / 0.80 =) $125 pretax income needed for $100 Roth contribution
$125 pretax income = ($125 * 0.80 =) $100 Roth 401(k)contribution + $125 tax you pay
$125 pretax income = $100 company match + $125 tax you pay which then makes that $100 match as Roth 401(k)
@@jacobolinger2480 More likely that you simply pay the tax on the company 401(k) Roth match with each paycheck when you make 401(k) contribution.
@@MrThunderbumper I spoke with a plan specialist (read: not a tax advisor) with T. Rowe Price who indicated that for them, the account between a Roth 401k and a normal 401k is the exact same, it just depends whether you contribute with pre and post-tax dollars. She also indicated that they company contributions are the exact same, and that a Roth conversion would need to be made after the funds are deposited; she didn't explain that process in detail. I assume you'd have to go to the broker, ask for the conversion, and they'd issue the tax info on a 1099-R at the end of the year.
Love you guys.
I have 401k and 401k Roth with my employer. Contributed to the pre-tax for about 10-12 years, then started contributing to both. As of now the balance of everything is broke down like this.. 82% is in pre-tax and 18% is in Roth. Contributing now at 8% Roth and 4% Pre Tax....I'm 52 and planning about 10 years left to work. How should i proceed? Ideas? Thoughts? Thank you.
I’m in the same boat. My employer only started a Roth 401k 2 years ago. So the bulk of my 401k is pre-tax. I’m doing fully Roth 401k because the company match only goes to the pre-tax bucket. So about 25% of my total contributions is going pretax whether I want it to or not. So I’m already getting the tax diversification. Based on what you said I’d go full Roth 401k because of all the pretax you already have. Especially now while tax rates are low. If they revise up in 2026 than you may want the pretax tax break.
@@SurpassMoney Good information, thank you.
@@SurpassMoney Good information. But even though you put it all in Roth, they still do the match it just goes into pretax? I wonder if it’s the same with my employer…Thank you.
@@turner111971 Favor contributing to Roth 401(k) when in relatively low tax bracket and favor contributing to traditional 401(k) when in relatively high tax bracket. If you're at your highest income and don't expect to reach next higher tax bracket, then as default favor traditional 401(k) contribution. At 52 aim to max contributing $31k year. For tax diversification $8,000 to Roth IRA.
"get on base" what does that mean?
Ha. It’s a quote from the movie Moneyball. It’s about just getting on base and acting runs. Not swinging for the fences to hit a home run. Same applies to investments. Make easy investments and shoot for 10% or so and be careful swinging for the fences hoping for 1000% on the next long short startup or crypto.
Can I convert a traditional IRA into a Roth pay the taxes and pull money from the Roth account without having to wait five yrs ?
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?
All of your gains on the roth will not be taxed either.
With the traditional 401K, the RMDs are based on your total Traditional 401K Balance. As everyone will be different, the 401K balance can be substantial… ie 1M, 2M+…thus the RMDs may be much greater than what you need. In your example you are using maybe an exact amount for comparison. Potentially look at what your 401K balance may be and look at an RMD chart. The required RMD may be very substantial. High RMDs can then trigger Medicare Premium surcharges (IRMAA), social security calculations. Remember RMDs are not what you need to withdraw but what the IRS/government is stating you need to withdraw.
Couldn't agree more!
Thank you
I am an independent contractor wirh a 1099, can i open a 401k roth?
Mark, my IUL, with the index I'm using, is one part of my overall retirement strategy. Your use of the word "Better" is subjective at best. Among other reasons, I do value my IUL because it won't lose value during market downturns. The worst my contract allows for is a positive 1/4% rather than losing like the IRA's and 401Ks have with my friends and some family. True, theirs were not self directed, and that makes a big difference. However, they're not the kind of people who want to manage their retirements, rather simply enjoy retirement. When their retirements took huge hits, I did not, and that is "Better" for me to not lose money. Great job on everything else though Mark:)
Not sure if your IUL does livings benefits and all but, great comment. You drop the 🎤 and no one picked it back up. lol
What happens if u pass away at 60 and have all the money invested in that. Don’t u lose that invested money and your family only gets your life insurance policy? So they could possibly lose a lot of money? I was told that’s a bad bet.
@@gusjaramill0 Wow, that vid was from a year ago. Yes, the policy has true living benefits, which is one of the reasons I chose it, even if the term option also had them.
@@drock5108 Lord, that video was from a year ago. Didn't know anyone took the time to look at comments a year old. There are two options if a person dies early, rather than living too long or getting very sick in the middle. One, they only get the death benefit if that option best meets their specific needs. Or, they can get both the death benefit and the cash value that's built up. It's merely a function of what best meets their needs. It's nice to have that flexibility and to even change it at some future point as well. Lots of people may tell you a lot about what they don't understand, often due to only looking at the surface level rather than unpacking a situation to gain a thorough understanding. It happens all the time:)
could I as a parent invest into a Roth IRA for a minor or do they have to be employed?
You must have reportable income.
Yes, a minor needs to have earned income. Do you own a business or have a side hustle? Are you paying your kids for working in your business? If not, we can help you get this going.
Just have them do chores and pay them lol
should i split the 401k with 401k ira
A 401k is a retirement plan offered by your employer
An IRA is something you set up by yourself by going to a company like Vanguard or Fidelity or ETrade and setting up an account.
Can I take 25k in my 401k and roll it into my roth IRA in one year I make less than $150,000 a year married. I'll be fine with paying taxes I just want to get more money in my IRA in one year than the 7,000 limit. I want to try and put like $50,000 in my Roth IRA one year. But this is money that's already been taxed.
You have until tax day (typically April 15) 2025 to contribute $7,000 to your 2024 Roth IRA; spouse may do likewise $7,000 for 2024 Roth IRA. You both may contribute $7,000 to 2025 Roth IRAs. That's ($7k * 4 =) $28,000 in Roth IRAs in one year.
How to convert brokerage account to roth ira
Christmas isn’t in the fall lmao
Lol
Be a good teacher and explain the definition clearly. No patient to listen a short cut definition. Or you may not clear yourself.
Can i have a roth IRA and a roth 401k and max contribute to both?
Q1 Yes you may contribute $23,500 to Roth 401(k) plus $7,000 to Roth IRA.
@alrocky can I also open up an additional rothfor mu wife that is unemployed?
@@markforsythe1916 Yes as long as one spouse works both may contribute to Roth IRA.
@alrocky but what if I make too much to have one, but she is unemployed?
@@markforsythe1916 Income limit for *_direct_* contribution of $7,000 to Roth IRA is $236,000 MAGI Married Filing Jointly.
1. Are you making over $236k MAGI MFJ?
2. Do either of you have traditional IRA balance?
Trashing on stocks and mutual funds… 🚩 🚩
I kinda disagree with this show because the 401k or Roth from your employer is also before taxes so what's the point at the end you will still
have to pay taxes on they.😐
There's no choice. If you have the opportunity for 401k. Roth or regular, that's what you use. A higher max and more chance of matching. That being said, number 1 is an HSA. Max that first!
How did your client get to 300 million Roth IRA? The maximum each year started at like 2k in 1997, and max is 8k if over 50yrs old?
Who is his Financial Advisor?? I dont think the stock market has done that good in less than 30 yrs...
He self-directed his ira into real estate and new businesses. Not the stock market. Similar to Peter Thile if you want to look up how he grew his account to $5B (invested into Facebook way before it went public). Now these are not ordinary or normal results but the point is you don’t have to invest your Roth IRA solely into the stock market. You can invest in non-publicly traded assets too.
I wrote a book about this called The Self-Directed IRA Handbook and you can learn more at www.directedira.com.
@MatSorensen man that is amazing!! Some just have the right help and knowledge to excel and succeed in investments. Thank you!!
@MatSorensen thank you!!
Me at 49, I have a employer sponsored 401k and that's its. And zero knowledge on how to invest in stock market. I started a Roth IRA about a month ago, but not sure I have time to see real gains at 7/8k a year going forward. And don't know if I need to buy penny stocks or Berkshire A class... 🤣😂
@@deal492 You have until tax day (typically April15) 2025 to contribute $7,000 to your 2024 Roth IRA. If you turn 50 this year you may contribute $8,000 to your 2025 Roth IRA.