Yes you can max contributions in both 401(k) and a Roth IRA. I am under 50 and allowed to put $22,500 in my 401(k) plus my employers match and also another $6500 in my Roth IRA.
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The Retirement Planning/ Investment/ Savings Thread (4 Viewers)
- Thread starter inca911
- Start date
In addition to your 401k contributions, you can always put up to the Roth IRA contribution limit of $6,600 ($7,500 if you're age 50 or older) - either directly or backdoor if your income disqualifies you.
Note that there are such things as Roth 401ks which I know nothing about.
I think I (and @Perthmike ) gave a lot of very sound financial advice, unfortunately you rarely heeded that advice, and well $20 is $20 to rebuild.
They don't allow you to trade ETFs? Their ETFs have very low fees. Hard to assess whether it's a better deal than their mutual funds without knowing investment amounts. Investing $1,000,000 versus $100,000 would change ETF fee totals.
Here are a list of their ETFs. I can give you a breakdown of my percentages if you'd like, but everybody has a different risk/investment strategy based on their retirement scenario.
https://investor.vanguard.com/investment-products/list/etfs
https://investor.vanguard.com/investment-products/list/etfs
johnjohn
Full House
it's a process. Keep at it.
I’ll do some research thank you for the replies.
One issue is I could talk to someone , a financial planner or advisor. But I just don’t know who to trust.
I like the idea of passive investments.
I know fiduciaries are supposed to do what’s best for you but at the same time they are getting paid. A lot. Where is that money coming from? You.
One issue is I could talk to someone , a financial planner or advisor. But I just don’t know who to trust.
I like the idea of passive investments.
I know fiduciaries are supposed to do what’s best for you but at the same time they are getting paid. A lot. Where is that money coming from? You.
My wife and I use the following ETF strategy with our Roth IRA investments. We are both more than 20 years from retirement and do not care about market fluctuations:
70% VOO - Vanguard S&P 500 Index ETF
10% VT - Vanguard Total World Stock ETF
10% VTV - Vanguard Value ETF
10% VNQ - Vanguard Real Estate ETF
We rebalance our portfolios annually to balance any percentages that may be off throughout each year due to market ups and downs in each fund. If you decide to do something similar and want my rebalancing Google Sheets doc, I am happy to send it your way.
70% VOO - Vanguard S&P 500 Index ETF
10% VT - Vanguard Total World Stock ETF
10% VTV - Vanguard Value ETF
10% VNQ - Vanguard Real Estate ETF
We rebalance our portfolios annually to balance any percentages that may be off throughout each year due to market ups and downs in each fund. If you decide to do something similar and want my rebalancing Google Sheets doc, I am happy to send it your way.
This is where I would heed the advice above where it was suggested to pay an advisor that charges by the hour and doesn't sell their own products. They are working for your best interest only, no commissions.
Anthony Ferguson
Flush
Are these independent advisers still around? I haven't been able to find one - only folks who want to actively manage your money. Any recommendations? I think location is unimportant these days.
Roth and 401k are separate limits, but Roth is subject to MAGI limits and may require you to do a backdoor Roth.
I'm 70% VINIX and 30% VTMNX. I used to be 60/30/10 with the 10 in Bonds (VBTIX) but decided I was too young for bonds.
Note that ETFs vs Admiral vs Institutional Funds difference is not worth considering. For example VOO, VINIX and VFIAX are all the same S&P 500 trackers with negligible difference in fees (0.04% vs 0.03%) but differences in minimum investments. My company 401k only offers the institutional variety.
For a 60/30/10 with ETFs you would be VOO/VEA/BND.
Oh and bogleheads is the PCF of retirement investing: https://www.bogleheads.org/forum/index.php
Note that ETFs vs Admiral vs Institutional Funds difference is not worth considering. For example VOO, VINIX and VFIAX are all the same S&P 500 trackers with negligible difference in fees (0.04% vs 0.03%) but differences in minimum investments. My company 401k only offers the institutional variety.
For a 60/30/10 with ETFs you would be VOO/VEA/BND.
Oh and bogleheads is the PCF of retirement investing: https://www.bogleheads.org/forum/index.php
OP
OP
You are correct that discrimination tests can cause problems. Fortunately, my current employer is smaller and nimble enough that they set it up. They limit the % after-tax contributions that can be put into a Roth IRA via in-plan conversions to avoid failing the discrimination test.
OP
OP
They are out there but are harder to find! I paid a flat fee to have an advisor to sanity check my plans using his tools. It was well worth it to get some peace of mind and confirm my strategies.
You trying to get this thread in the politics section??
Fake news
Deferral limit is $22500 and catchup is $7500 for 2023. It is a combined limit between pretax and Roth and is a personal limit not plan limit (you can not defer $30k in 2 plans).
Employer contributions (sep or profit sharing) are limited to deductible contributions and need to be allocated to all eligible participants. If you have a sep now, all employees would need to receive the same percentage contribution. In a 401(k) plan there may be some wiggle room using advanced testing for non-discrimination.
You do not need a SEP if you have a 401(k), the profit sharing contribution accomplishes the same goal.
OP
OP
For those with larger amounts in savings accounts that are currently earning a pittance in interest, CIT bank offers a Platinum Savings Account with a 4.85% APY for a balance of >$5k. It was very quick to open an account.
https://www.cit.com/cit-bank/bank/savings/platinum-savings-account
I plan to do an update shortly on Affordable Care Act (ACA, aka Obamacare) subsidies. Clever management of finances while working (i.e., strategies to show little income on paper in early retirement) can dramatically impact health care costs for those pursuing Obamacare.
I'm trying to start retirement in the next year or two (i.e., before 55), so I'm opting to make some moves now (i.e., partial conversions of 401(k) to Roth IRA) to fully utilize tax buckets with a bit of room in them. With the expiration of the Tax Cuts and Jobs Act at the end of CY2025, there is essentially a 3-4% tax hike coming that you can essentially avoid by making some moves in the next few years prior to expiration.
You don't need to actually live in poverty during retirement, but you can benefit greatly by setting up your retirement accounts such that the government thinks you do.
https://www.cit.com/cit-bank/bank/savings/platinum-savings-account
I plan to do an update shortly on Affordable Care Act (ACA, aka Obamacare) subsidies. Clever management of finances while working (i.e., strategies to show little income on paper in early retirement) can dramatically impact health care costs for those pursuing Obamacare.
I'm trying to start retirement in the next year or two (i.e., before 55), so I'm opting to make some moves now (i.e., partial conversions of 401(k) to Roth IRA) to fully utilize tax buckets with a bit of room in them. With the expiration of the Tax Cuts and Jobs Act at the end of CY2025, there is essentially a 3-4% tax hike coming that you can essentially avoid by making some moves in the next few years prior to expiration.
You don't need to actually live in poverty during retirement, but you can benefit greatly by setting up your retirement accounts such that the government thinks you do.
@DrStrange I’m curious of your take on the above. I’m guessing I’ll be met with silence, but I would love to see what you have to say.
bergs
Royal Flush
What’s the consensus advice for a couple who wants to work another 10 years and then start retirement and is already investing the max in our active 401Ks in ETFs? We have several rollover IRAs and these are generally in bonds or fixed income assets (4-5%). Not sure I want to get more aggressive with these given where I think the economy might go in the next 2 years.
Weird flex, but okay.
You have rollover IRAs, but are you actively maxing Roth IRA contributions? If not, that would be a great way to maximize on tax free interest growth if your MAGI allows for it (I believe MAGi of $228,000 combined is the max).
Looking back, Besides the free employer match 401k money the best investment was and maybe still is most likely farm land. Minimal yearly property taxes. Little to no upkeep or maintenance cost. Plus regular income from renting it out as farm land, hunting land or both.
I appreciate everyone who posts in this thread as I have dreams of retirement in the not so distant future, wife and myself are both 55.
Like Bergs I’m concerned about where our economy is headed. Does anyone else feel like the stock market could be rough for a while? Does it matter or should one just ride it out as they always say? I know your spot in life matters very much in answering this question.
Like Bergs I’m concerned about where our economy is headed. Does anyone else feel like the stock market could be rough for a while? Does it matter or should one just ride it out as they always say? I know your spot in life matters very much in answering this question.
Key lesson: Any money you need in the next 5 years shouldn’t be in the stock market. That applies regardless of how well or poor you think the market will do- you won’t make amazing gains, but it will be there when you need it.
Beyond that, it’s all a matter of risk tolerance and objectives.
In either event, I’d find a qualified fiduciary financial advisor, one that works in your best interests, to help guide your options.
Beyond that, it’s all a matter of risk tolerance and objectives.
In either event, I’d find a qualified fiduciary financial advisor, one that works in your best interests, to help guide your options.
If or when the stock market, banking system, economy or all 3 shit the bed 95-99% of us will all be in the same predicament. No use in stressing over it.
Land, family, friends, supplies and the skills necessary to bug in vs bug out if things get really bad is probably a safe investment no matter what happens or doesn't happen in our lifetimes.
More importantly make the most of each day. Don't work it away. I'm in my early 40's and see family, friends and neighbors dropping like flies. My hope is that I can see 50 but wouldn't be surprised if I didn't.
I do know that overall I made the most of my time here. I accomplished some pretty darn cool things and did my best to teach those around me same.
Most say they don't understand how my life style is possible. It's a life choice. Just like many homeless people given money or a chance still go right back to being homeless without a pot to piss in. I have friends that borrow for everything, don't work hard and rarely if ever work overtime. One of them once told me it didn't matter if he made $30k or $300k a year that he will always be broke. He and his wife unwilling to manage their spending habits.
My dad and step mom are the same way. They made amazing money most of their lives but eat out most meals and spend money like water. They both recently retired and are going on 8 cruises this year. They went on 6 last year yet had to take a loan out for a mediocre car when theirs was having issues. They don't own anything or have any significant savings never living within their means. They've always rented huge fancy houses to show off to the rest of my step moms well to do family. They are happy tho and as long as their health holds up that's all that matters.
I guess I'm the polar opposite and thats possibly some of the motivational factor to be. I bounced around living with friends during high school. Moved to my own place at 18, bought my first house at 20. Got married, worked my butt off to keep her home with the kids for 13 years and spoiled rotten.
Now kids are older, Wife has a reasonably paying career she enjoys with acceptable benefits. I now work part time 28-30 hours a week vs the 60-80 I used to work and spend time with family, projects or whatever I want. I wish I only worked 2 days a week instead of 3. There's so much to do and see besides working. I could be working full time and be putting boatloads into retirement or have a fancier house but realized all the time with my kids I missed when they were younger was only worth it because my wife was there. Now it's my turn and if I don't live to see 50 I know that I lived a pretty darn good life and hopefully taught my family to do the same after I'm gone.
Land, family, friends, supplies and the skills necessary to bug in vs bug out if things get really bad is probably a safe investment no matter what happens or doesn't happen in our lifetimes.
More importantly make the most of each day. Don't work it away. I'm in my early 40's and see family, friends and neighbors dropping like flies. My hope is that I can see 50 but wouldn't be surprised if I didn't.
I do know that overall I made the most of my time here. I accomplished some pretty darn cool things and did my best to teach those around me same.
Most say they don't understand how my life style is possible. It's a life choice. Just like many homeless people given money or a chance still go right back to being homeless without a pot to piss in. I have friends that borrow for everything, don't work hard and rarely if ever work overtime. One of them once told me it didn't matter if he made $30k or $300k a year that he will always be broke. He and his wife unwilling to manage their spending habits.
My dad and step mom are the same way. They made amazing money most of their lives but eat out most meals and spend money like water. They both recently retired and are going on 8 cruises this year. They went on 6 last year yet had to take a loan out for a mediocre car when theirs was having issues. They don't own anything or have any significant savings never living within their means. They've always rented huge fancy houses to show off to the rest of my step moms well to do family. They are happy tho and as long as their health holds up that's all that matters.
I guess I'm the polar opposite and thats possibly some of the motivational factor to be. I bounced around living with friends during high school. Moved to my own place at 18, bought my first house at 20. Got married, worked my butt off to keep her home with the kids for 13 years and spoiled rotten.
Now kids are older, Wife has a reasonably paying career she enjoys with acceptable benefits. I now work part time 28-30 hours a week vs the 60-80 I used to work and spend time with family, projects or whatever I want. I wish I only worked 2 days a week instead of 3. There's so much to do and see besides working. I could be working full time and be putting boatloads into retirement or have a fancier house but realized all the time with my kids I missed when they were younger was only worth it because my wife was there. Now it's my turn and if I don't live to see 50 I know that I lived a pretty darn good life and hopefully taught my family to do the same after I'm gone.
They can just use this for 3 months to get a bunch of deposits and then change the rate to 0.05% or something, right? Some short term liquidity for them, no long term obligation and then they hope you stay when the rate goes to hell and keep using them as a bank due to laziness or not wanting to close an account? I don't know how to, but wouldn't you be better off buying Treasury Bills?
I have 17 years on my 30 year mortgage @ 4.25% and I'm considering paying it off later this year. I already max out things like my 401k, I don't have access to a bunch of tax advantaged accounts because of having to high of an income but do have what should be fully funded 529s. I know I can, and financial advisors would tell me I should, put that money elsewhere and pocket the spread between the 4.25% and the return on an investment but I would like to not have mortgage payment anymore. Just something about that never being an obligation.
DrStrange
4 of a Kind
Tldr: Don't panic sell your investments, be a buyer when others sell. You will likely live longer than you expect and should plan for it. Old people need a healthy dose of investment risk.
If there is a self-inflicted financial wound related to the debt ceiling in the USA in the next month or two, that is a buying opportunity not the end of the world.
As a reminder, the US markets dropped ~15% in less than a week in 2011 - the last time the debt ceiling was a crisis. The markets fell 7% in one day after the 2008 dysfunctional vote in congress to ignore the banking / financial sector crisis. The point being that these sorts of situations often lead to massive swings in market values as panic overwhelms the financial markets.
Long term investors shouldn't be panicked and simply ride the wave. Easy to say, "don't panic". Hard to keep cool when everyone seems to have lost their minds. Lots of people damage their self interest in such times.
From Warren Buffett on 05-06-2023 "What gives you opportunities is other people doing dumb things," Buffett said. "During the 58 years we've been running Berkshire, I would say there's been a great increase in the number of people doing dumb things — and they do big dumb things. "
Retirement is a long-term project. Most of us will live far longer than we expect. The average person at age 65 can be expected to live 18 more years (age 83). But the mere fact you are part of this discussion likely means your life expectancy skews to the longer end of the spectrum. Savey enough to take care of your physical health. Financially capable to pay for "preventative" health care. A couple should be assuming at least one of them will live past 90 and invest accordingly.
Conventional wisdom is "old people" should significantly moderate their investment risks. That might not be right for everybody. Expecting to live 20+ years means someone can safely invest pretty aggressively. Keep in mind there are hidden consequences for avoiding investment risk. You will be lucky to tread water after inflation and taxes when your portfolio is designed to minimize risks.
Both my wife and I are 65. We have an aggressive investment strategy - very roughly a third in equity market indexes, a third in long-term income-oriented securities, and the last third in real property / oil & gas interests. It is all pretty volatile, but the synergy of the portfolio works out pretty well. Still see regular swings in value in the six-figure range, but these average out. < exception is oil & gas, which can have astonishing swings in value that might not "average out" >
Be conservative in your spending and aggressive with your investments -=- DrStrange
If there is a self-inflicted financial wound related to the debt ceiling in the USA in the next month or two, that is a buying opportunity not the end of the world.
As a reminder, the US markets dropped ~15% in less than a week in 2011 - the last time the debt ceiling was a crisis. The markets fell 7% in one day after the 2008 dysfunctional vote in congress to ignore the banking / financial sector crisis. The point being that these sorts of situations often lead to massive swings in market values as panic overwhelms the financial markets.
Long term investors shouldn't be panicked and simply ride the wave. Easy to say, "don't panic". Hard to keep cool when everyone seems to have lost their minds. Lots of people damage their self interest in such times.
From Warren Buffett on 05-06-2023 "What gives you opportunities is other people doing dumb things," Buffett said. "During the 58 years we've been running Berkshire, I would say there's been a great increase in the number of people doing dumb things — and they do big dumb things. "
Retirement is a long-term project. Most of us will live far longer than we expect. The average person at age 65 can be expected to live 18 more years (age 83). But the mere fact you are part of this discussion likely means your life expectancy skews to the longer end of the spectrum. Savey enough to take care of your physical health. Financially capable to pay for "preventative" health care. A couple should be assuming at least one of them will live past 90 and invest accordingly.
Conventional wisdom is "old people" should significantly moderate their investment risks. That might not be right for everybody. Expecting to live 20+ years means someone can safely invest pretty aggressively. Keep in mind there are hidden consequences for avoiding investment risk. You will be lucky to tread water after inflation and taxes when your portfolio is designed to minimize risks.
Both my wife and I are 65. We have an aggressive investment strategy - very roughly a third in equity market indexes, a third in long-term income-oriented securities, and the last third in real property / oil & gas interests. It is all pretty volatile, but the synergy of the portfolio works out pretty well. Still see regular swings in value in the six-figure range, but these average out. < exception is oil & gas, which can have astonishing swings in value that might not "average out" >
Be conservative in your spending and aggressive with your investments -=- DrStrange
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