Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 12:52 PM   #21
Dryer sheet wannabe
 
Join Date: Jan 2006
Posts: 10
Re: roth 401k and roth dont seem good deal

A benefit of Roth 401k is that you can put in $15k (or $20k in year you turn 50 or older) of after-tax dollars.

With a standard 401k, you're limited to $15k (or $20K for >=50) of pre-tax dollars. (Amounts greater than this can be put in after tax, but you need to pay tax on earnings upon withdrawal.)

So if you're trying to maximize the amount of your salary that you can put away in tax preferred manner, the Roth 401k has an advantage.
__________________

__________________
pms163 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 02:20 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: roth 401k and roth dont seem good deal

im not convinced any roth is a good deal for most of us
__________________

__________________
mathjak107 is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 02:29 PM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: roth 401k and roth dont seem good deal

just looked for 2006 you can put an extra 5000 in a 401k after 50 for a total of 20,000...20,000 pretax dollars is pretty powerful considering you can pull out 35,000 a year at 1500 in tax.
__________________
mathjak107 is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 04:51 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: roth 401k and roth dont seem good deal

I dunno...seems to me that putting money in a roth now that I wont be taking out for 20 years, being able to withdraw that money + the investment growth tax free is a pretty good deal.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 05:00 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: roth 401k and roth dont seem good deal

but you can pull out 35,000 a tear almost totally tax free from a traditional filled with pretax dollars..seems crazy to piss away 25% or so upfront for something you can get almost tax free anyway for 1500 bucks in total taxes for most of us...in fact if you do this right by having your equities outside the retirement plans and your income generating stuff in the retirement plan you can do even better. capital gains on the stuff outside of the retirement plan is a mere 5% if you can get into the 15% bracket and is soon to go to zero....
__________________
mathjak107 is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 05:03 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: roth 401k and roth dont seem good deal

Simple. I cant contribute to a pretax plan as I, like most early retirees, have no earned income. My wife contributes the max to her plan. After that we've already paid taxes on our money, why not invest what we can in a roth and let it grow and be withdrawn tax free?
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 05:05 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: roth 401k and roth dont seem good deal

Quote:
Originally Posted by Cute Fuzzy Bunny
Simple.* I cant contribute to a pretax plan as I, like most early retirees, have no earned income.* My wife contributes the max to her plan.* After that we've already paid taxes on our money, why not invest what we can in a roth and let it grow and be withdrawn tax free?
yes this is true ,if you cant deduct your 401k or ira than all this is a moot point
__________________
mathjak107 is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-28-2006, 05:23 PM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: roth 401k and roth dont seem good deal

Quote:
Originally Posted by mathjak107
this is a moot point
Comb your hair just right, and nobody will notice
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-29-2006, 04:19 AM   #29
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,174
Re: roth 401k and roth dont seem good deal

Quote:
Originally Posted by Cute Fuzzy Bunny
It doesnt matter.* Fifteen minutes before I make a Roth withdrawal, the feds will institute a national sales tax as a replacement for the income tax
I agree that most proposed solutions to the boomer retirement involve a wealth transfer within the boomer generation from one boomer savings account into another boomer checking account or younger worker investment account. The flat tax/sales tax proponents are coming out in force now.

I max out my husband and my deferred "401k" and Roth IRA. I didn't start the Roth's until late in the game. They are easy access to money for critical situations; sort of like a creation of a ready cash fund. So I am hoping they will continue to be untaxed. This is just one more gamble in the politicized savings game.

Also, there was a comment in one of the posts that boomers will continue to work because of low savings rate. There is no reason to believe that low earners will delay claiming SS benefits starting at age 62. So, for many that expect to work in retirement, the SS fund will be a supplemental income fund. The bend points make this especially attractive for poor workers with low paying jobs. I think there will be a lot of people with this profile.
__________________
Tadpole is offline   Reply With Quote
Re: roth 401k and roth dont seem good deal
Old 05-29-2006, 06:43 AM   #30
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
Re: roth 401k and roth dont seem good deal

Quote:
Originally Posted by Tadpole
There is no reason to believe that low earners will delay claiming SS benefits starting at age 62. So, for many that expect to work in retirement, the SS fund will be a supplemental income fund. The bend points make this especially attractive for poor workers with low paying jobs. I think there will be a lot of people with this profile.
It isn't just the people in low paying jobs. I've talked with several hard heads making decent money that say SS is going broke and they want to get their money before it runs out. They don't seem to care about tax implications or the lower payment by not waiting until true retirement. Of course, these people are the same ones that have little or no savings. I suspect they see this as a way to enhance their income and lifestyle.
__________________

__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Reply

Tags
401k


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
500 search phrases for 2006 dory36 Other topics 2 01-16-2007 08:00 AM
Trad 401k or Roth 401k for High Earners Linney Young Dreamers 7 01-01-2007 08:24 PM
Traditional 401k or Roth 401k HatePayingTaxes Young Dreamers 4 12-30-2006 10:59 PM
Roth 401k - Coming January 2006 Roth401k Other topics 12 06-16-2005 05:59 PM

 

 
All times are GMT -6. The time now is 09:23 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.