Alabama thread!

The advantage of Roth is tax free growth for retirement. All others are taxed when you remove during retirement based on a tax rate that is more than likely going to be much greater then than what it is now.

Example - $100,000 in retirement account might be taxed at 25% now but when you retire it could be 35% and you get $65,000 of your $100,000.

 

Roth IRA - individual retirement account. Think it’s just a different way of saying it.

 

so at the point I'm at ----> employee match 6% and I contribute 7% to my 401k

your suggestion is open a Roth? is that what Jeff was saying too?

 

well I think the point that jeff is making is the more pretax dollars come out of your check the less taxable amount of moneys you have. so say you make 40k a year but you have 10% going into a 401 and we will say another 10% for insurance and such that comes out pretax. instead of you being taxed 18% on 40k you may get yourself into a lower percentage tax bracket so 16% so now instead of paying 7200 in taxes you would pay 5120...

it would be more accurate to say, since you are already putting 7% in and insurance wouldn't change that you may be in the 18% bracket but have 33200 worth of taxable income and that would be about 6k in taxes. my take away would be, if you can afford to up your pretax deductions enough to get you in a lower percentage tax bracket it is a win/win (less taxes now and when you retire), and if you can't it's a win/lose (less taxes when you retire and more now)

 

The proper name is "Roth IRA". It functions as a personal 401K (more or less) but is not labeled "401K".

If you have the spare cash, it is good to put as much as allowed into each fund. Otherwise, do what you comfortably can. Personally, I put a priority on the 401K - max that one first. Any extra, dump in the IRA.

Remember - this is long-term savings. Don't look at the total every week - only check it annually. Be patient, live your life, and before you know it, aside from being old, you will have a nice nest egg saved up.

 

Not sure what he was saying but, if all you have is a 401k I would diversify some. Find you a solid financial advisor and let them help you put together a plan. I found it was worth the yearly fee they charge. I currently have a Roth IRA, Traditional IRA and 401k. I just retired from my first 20 years of work so I will more than likely roll 401k into Traditional IRA to have in one spot.

 

right, I can't put in enough to get to a lower tax bracket. so go towards a Roth at this point?

at what point, though, is it waiting too long to start the Roth? I understand 401k is pre tax and that's the best option, but what is the "cutoff" per say that the advantage is to one or the other?

 

Those that did the ECGS bushing. Did you replace the seal when you installed the bushing? Or does it only need to be done if the axle is leaking?

 

I agree that it helps now. The money you put into the 401k will be taxed at a rate that will not be determined until you get ready to retire which my bet would be much greater than now. Might actually cost you more if it is all in one spot.

 

what seal, the crush washer?

 

401k invested now means less tax now so actually you are investing that tax money and getting interest on it until you retire and then it is taxed. Both are good to invest in,

 

yes I would say if you were not on the bubble of a tax bracket if would behoove you to diversify your investment. I have also been told by many, to save until it hurts, and then save just a little more.
I have a mutual fund that is the accumulation of my previous jobs' 401ks and also my wife's, but apparently they no longer do those or something and if I want to invest anymore independently I must start a new account to due so (the mutual fund is grandfathered in but there has been legislation now that, from my understanding, does not allow for those kinds of investments anymore something something something) I plan on rolling that into whatever I have too (assuming some sort of ira) and then taking what ever my annual raise is this year and putting maybe have of that direct deposit to that account. I'm also at 7% on my 401k and I may up that because I feel like I may be on the bubble but ill just have to play that by ear I guess haha

 

yeah I am currently waiting for 2 things to happen.

1. my first paycheck after the bill is signed will show my tax change.

2. mid January we have potential raises that will affect my paycheck, and I want to see how that is affected.

these 2 things will decide how much I can put back compared to what I am now. the 7% I am doing is basically what I am comfortable at this point, so whatever my take home amount changes to be I plan to take that "extra" and put it elsewhere since I am comfortable now.

 

Let’s all just say more than likely we will all be passing each other during our replacement shift as Wal-Mart greeters! LOL!

 

It is never too long to wait - start one when you have some cash. And if you don't have extra cash one year (say you buy a house) don't add anything. Your money is still there, earning interest. Add more when you can.

The only hard and fast rule is to save when you can. And, starting early helps to earning a larger sum later in life.

 

if all else fails, I know a place that offers 3 hots and a cot, plus a free gym and cable tv

 

hey would could just build a time machine and go back like 5 years and invest it bitcoin

 

Financial talk is soooooo much better than “ohhh, I’m sooooo butthurt over a girl I met 2 months ago...” LC

In other news, I just picked up a 7lb Rib Roast for Christmas dinner.

 

lol I enjoy financial talk. I enjoy a good discussion period, but a lot of it isn't allowed on here.

I texted dad about this stuff and wanting to discuss it when we got together for christmas and he got almost giddy with excitement. he and I are a lot alike..