I would like to 3rd this. People that do not know about this trick do not realize how amazing it is. In addition to the $19k 401k Roth or traditional contribution, you can put thousands of additional dollars into an after tax non-deductible 401k then move that to a Roth IRA, while still employed at that company! (This does not impact your ability to contribute to an ira). You can literally go broke saving money! The amount you can contribute depends on a lot of factors, all specific to your income and company, you need to carefully read the plan and talk to your 401k provider...and sadly some companies don’t allow this
How to save for retirement?
- Thread starter EA-Sports
- Start date
I would like to 3rd this. People that do not know about this trick do not realize how amazing it is. In addition to the $19k 401k Roth or traditional contribution, you can put thousands of additional dollars into an after tax non-deductible 401k then move that to a Roth IRA, while still employed at that company! (This does not impact your ability to contribute to an ira). You can literally go broke saving money! The amount you can contribute depends on a lot of factors, all specific to your income and company, you need to carefully read the plan and talk to your 401k provider...and sadly some companies don’t allow this
Warren Buffett specifically structures his personal wealth and his company to minimize the tax burden. Berkshire Hathaway does not pay a dividend for this reason.
My guess is that Buffett highlights this difference in tax rates with his secretary to appease the overly biased media so he’s not considered a ruthless shark when he makes one of his infamous deals like the one he made with Bank of America a few years ago.
Anyone that actually thinks they are paying too little in taxes is not prevented from sending more money to the federal government. The fact that the greatest allocator of capital of our lifetime (and perhaps ever) purposefully minimizes how much money he and his company sends to the federal government should tell you much more that any quip about the relative tax rate between himself and his secretary.
+4
I contribute about $13k per year (my plan max allowable) into an after-tax 401(k) and roll it over into a Roth IRA on every pay day (eliminates taxes and makes the accounting clean). These contributions can be pulled out penalty free after five years to do as you wish with. Earnings need to be kept until 59.5. Even better than a regular brokerage account.
Maxing your 401k is good. Been there done that however it's the mindset and willpower to live below your means, get out of debt and buying monthly into the stock market regardless of market conditions. It's a marathon, many people give up but stick with it and finish strong. Invested for 30 years , I retired last year at 51. I actually enjoyed working at Megacorp but I did the numbers and left on my terms.
Andre1969
Thinks s/he gets paid by the post
Not just that, but Buffett's secretary isn't just a "secretary" in the classic sense. She's not your stereotypical Jane Hathaway or Carol Kester from classic TV Land barely making ends meet. She's more of an office manager, and I've seen estimates that she could be making $200K or more per year in AGI.
While this is still nowhere in the same league as what Buffett makes, it's still a far cry from what we think of when we hear the word "secretary". I think people just like to throw that word around just so they can cry about income inequality.
OldShooter
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Remember this: Do not let the tax tail wag the investment dog. The goal is to maximize the money in your pocket at the end of the day, the goal is not to minimize taxes.
