Tfw you realize people didn't start their Roth IRA's or 401k's at 18

>he can't spare a few thousand a year to have a comfy nest egg at retirement
Stay mad poorfag

What's wrong with a 401k?

Veeky Forums Roleplayers refuse to acknowledge that tax-free retirement accounts are amazing because they're all gonna be sooper rich off shitcoin

I'm 25, should I open a Roth IRA or a 401k for retiring at 40?

I make about 60k a year and pay 1k in rent.

Yes I don't spend much money, my annual expenses are $25k but I live in a 1br apartment in a city so my rent is expensive. I feel a little bit secure with the money, but I just want enough money to leave my job and maybe run a small business earning maybe $15k - $20k a year.

You know what's tragic?

My Nubian Queen getting pounded daily by some faggoty ass skinny white techie douche.

This makes me sad.

I'm currently investing with the acorns app, is it a good replacement?

do you trust your government not to raid these funds one way or an other before you retire tho?

i have similar options in my country, i dare not to take advantage of them i figure when the pension system collapses these will be raided first.

>My Nubian Queen getting pounded daily by some faggoty ass skinny white techie douche.

WOW. Serena is marrying a fucking white boy.

WTF???

I bet her ProudNigger "All white men must die" father is fucking crying inside.

the problem with a 401k is that I can actually make a better return with that money investing in the stock market myself adjusting my portfolio every 3-8 months which is more liquid than a 401k.

A 401k is basically given to wageslaves so they feel like they are doing something right for their future, when in reality they could actually be learning how to roll that money over themselfs and retire early.

do these things also have high fees attached that almost negate the benefit from delayed/no tax?

i had this weird feeling when i ran through these pension plans with a guy that the only one really profiting from it is the institution handling your account. even more so, not only they negate the tax advantage, but in bad years when you would have no profits to pay taxes after they outright skin you alive with the fees that are dependent on the size of the account and not the yield.

kek

just learn to navigate the world of finance yourself. A 401k is basically the lazy way of doing things.

yeah well i have been hanging around on Veeky Forums for 2 years now and feel more stupid and unsure about investment every day.

Roth IRA takes priority, it is 100% tax free deposit and 100% tax free withdrawal at retirement. Plus the max deposit into a Roth IRA per year is $5,500 which most full time workers can achieve without too much worry.

401k has taxes at some point (mind is blanking right now because I just got back from the gym) but the maximum deposit anually is somewhere in the 18k range, which is waaaayyy harder to meet.

I'd say with 60k, 12k a year in rent (I would find a cheaper deal if you're renting senpai, $1k is dumb for one person to pay for an apartment, and you shouldn't be spending more than $600~ a month in rent if you plan on retiring early (40 is a meme, you won't retire comfortably unless you save/invest 80% of your income until you're 40. Which is in no way realistic. I'd aim for 50 years at the minimum. )

That leaves $48k a year

Take about $5k to cover living expenses and utilities

You now have $43k a year, take $5k to cover extra costs/fun.

That leaves us with $38k to invest.

----
>ROTH IRA
Max it out at $5,500 a year. No question.

That leaves $32.5k to invest.

>401k
This is the harder part. If you work a good job, you should have a company 401k plan where they take a part of your paycheck every pay period (usually %5) and put it into your 401k. The cool thing about these company policies are that the contributions from your paycheck (that %5) gets matched by the employer.

That's free money.

But besides that, you should be making a $10k a year investment into your 401k for a healthy retirement to supplement the big bucks from your savings and Roth IRA. If you want to be absolutely sure you have the best retirement chances, go full out on the 401k and max out your deposits.

Let's call that $18,000 a year into your 401k.

That leaves us with $14.5k to work with.

This money should be split between a brokerage account/savings

(mainly splitting equal investing in- mutual funds for a riskier investment, dividend stocks, and bonds)

Tl;dr - you have enough income to max out both and you should

I'm in your position. In 2017 I'm going to divert 100% of my paychecks to my 401(k), and when that's maxed out switch to after-tax 401(k) which I'll immediately rollover to my Roth IRA. I'll also put $5500 in my tIRA and convert that to the Roth and well.

Untaxed conversions are basically the same as contributions, they're available for immediate withdrawal, so I'm basically overmaxing my Roth with no risk.

I can afford to do this for about five years in a row before my checking account runs dry, I won't even be touching the majority of my taxable accounts.

You guys should get a vanguard 401k where your company pays the administrative fees.

A 401k is also fairly liquid, you can rollover to a tIRA and convert to Roth (which is a taxable event) and the converted money is available after 5 years.

It's obviously not good emergency money but it's not tied up til you're 60 either.

>A 401k is basically the lazy way of doing things.

Everyone saying this is an idiot. The tax deferral directly saves you money (unless you run your 401(k) balance through the roof, which you'll have years of warning before doing in which time you can work on filling Roths and bleeding the 401(k) via rollovers and small conversions).

You literally can't get this by "being smart" on the stock market.

Walk me through the steps you're taking, because I've always heard about people using after tax 401k's and I never really got the point.

Also overmaxing a roth, how do?

The smart man can do both and get away with it.

Just one or the other won't help.

>40 is a meme, you won't retire comfortably unless you save/invest 80% of your income until you're 40

The "simple math of early retirement" post suggests that saving 50% of your income will get you a same-expense-level retirement after 15 years, from ages 25 to 40. This ignores tax (because MMM manages to pay no tax by having a kid and barely any expenses, which really depends on him living his sort of lifestyle in Colorado) and also assumes a constant average return (which is quite a gamble over a period as small as 15 years) but it's definitely doable.

So I think the person you're replying to has a very good chance of pulling it off with only a 60-65% savings rate.

>I never really got the point.
>Also overmaxing a roth, how do?

If you plan supports "in-service rollovers" (my plan at my.vanguardplan.com does, I suspect all of Vanguard's 401(k) plans do) you are allowed to roll over any after-tax 401(k) money directly into a Roth IRA. Since the 401(k) contribution limit is $54k in 2017, but only $18k of this is allowed to be pre-tax money, you can in principle put $36k of money into a rIRA with this trick.

Basically every paycheck you divert some amount to "after tax 401k". Wait a day or two, then phone Vanguard and say "I want to make an in-service non-hardship withdrawal of my after-tax 401(k) into my Roth IRA" to move the money.

The waiting is probably unnecessary, but it doesn't hurt (well, if there are gains in the two day period you have to pay income tax on them), and it means that the IRS will see different dates on its records so they'll be clear that you did this process in order and weren't somehow directly contributing to a Roth, which would be illegal.

This is explained in more detail in
madfientist.com/after-tax-contributions/

Jfc I researched this for this last hour and this seems too good to be true.

If that's the case then 401k's are literally useless if you can roll everything into your IRA's...
Any more tax cheats I've been oblivious to that you can think of?

Well, bear in mind that even a 5-year delay is five years in which congress can close these loopholes (and they'll be portrayed as "rich people dodging taxes", so it'd be hard to argue to keep them unless the AARP likes them). I'm doing long-term planning assuming I have all these loopholes forever, but I'm very conscious that congress might block me, which could lock my funds away from me until age 55 and/or force me to convert a lot at once and pay a ton of income tax.

But here's the deal, as I know it:
1. You can always put $5500/yr into a tIRA, but it won't be tax-deductible if you make more than $70k or so. (If you make less than this shit gets complicated, I haven't explored this.) You can then convert this into a Roth, and since this conversion is nontaxable (it's on after-tax money) the funds are immediately available for withdrawal at any time penalty-free.

Any earnings on this money are locked away until you're 59.5. I don't know how to get around this.

2. Traditional 401(k) money can be rolled into a tIRA when you leave employers, or at any time if your plan supports in-service withdrawals. Be careful doing this if you are also using your tIRA to backdoor Roth funds as in step (1), since this money is pre-tax and there are ordering rules for what you can convert. (Converting pre-tax money is a double whammy because you're not only taxed at conversion time, but the taxed funds are then locked for 5 years before you can withdraw without penalty. And Roth withdrawals must be taken in order, so if you have locked money in there, all the subsequent money gets locked with it, even if it wouldn't have been locked otherwise.)

To be clear: by "locked" here I mean you have to pay a 10% penalty on this. You'll wind up with a few bucks locked in this way because of gains/losses while the money is in transit, just eat the 10% on the few bucks.

con't.

3. Roth 401(k) money can be rolled over into a Roth IRA. Again this is a nontaxable event so the principal is immediately available for withdrawal. I believe, but don't know, that the earnings from the Roth 401(k) become earnings in the IRA, and are therefore trapped til you're 59.5.

4. After-tax 401(k) money can be rolled over into a Roth IRA. Principal is not a taxed conversion so is available immediately. Earnings on the 401(k) money will be taxed as income and subject to the 5-year rule so you probably only want to do this if your plan supports in-service rollovers and you can do the conversion quickly after contributing it.

5. If you have a low-income year, say because you've quit your job, you can roll your 401(k) into a tIRA. This is not a taxable event. You can then, at any time and in any quantity (modulo the ordering rules, if you're doing this at the same time as step (1)) convert this money into your Roth IRA. This will be a taxable event but you can do this a little bit at a time to keep your net taxes low. Any money you convert this way in the 0% bracket will be totally untaxed!

All of this money, even the 0% money, is considered a taxable conversion and is locked for 5 years. You can withdraw any money from the Roth you contributed _before_ this, but this money (and all money after) has a 5-year delay on it. Every conversion has its own 5-year clock. Keep track of this.

Finally, if you're playing these games and make it to age 70 still with a ton of money in your 401(k), you need to be careful. There are now Required Minimum Distributions which could force you to withdraw a ton more than you were, jacking up your taxes.

You want to keep this in mind as you age and start withdrawing more earlier, even if it increases your taxes then.

If you find yourself in this situation and just want to fuck the government, you can contribute to charity directly from a tIRA or 401(k). These contributions count toward you minimum distribution but are not taxed. So you're basically increasing your tax rate from 30-40% or whatever it was, to 100%, but the "taxes" go to a charity you like instead of the IRS.

I'd advise you don't do be spiteful toward the IRS, because at this point you (a) want there to be Social Security money available to placate the proles who weren't doing this their whole lives, and (b) you got a _lot_ of tax breaks from the IRS through these schemes, I'd be kinda grateful.

Oh, and I should add: I am not a lawyer, this is not legal advice, I'm not even American. I just live here and was ecstatic to learn that this country's high wages are complemented by a porous tax code that outright encourages FIRE behaviour.

he paid his rent

CHALKED.

Also that guy is like 6'5. He's probably hung like a milk bottle.

He is ready for that jelly

black women belong to white men, nigger.

>mfw i'm related to her
feels gud

>a porous tax code
Not sure how you draw that assessment. Your "trick" involves moving around POST-tax dollars, which the government has never been particularly restrictive of doing. The IRS has already collected taxed on the earned portion of the income, so they're happy if you choose to invest it.

Case in point: backdoor Roth conversions. You can literally contribute MILLIONS to a Roth, as long as you pay income tax on the earned portion.

>You guys should get a vanguard 401k where your company pays the administrative fees.
I realize you're not American, so I won't ream you over this mistake. But do understand that a 401k is a company sponsored plan, by definition. It's offered by your employer, and the employee does not get to choose whether it exists, the amount of the match (if any), who administers it, what the fees are, or where the accounts are maintained. You cannot "choose" a Vanguard 401k.

Some employees offer very good 401ks, with healthy matches, sound administration, low fee investment options, and flexible rules. But many 401ks are toxic deathtraps. Investment options may be few and expensive, matching may be paltry or non-existent, and administration may be difficult to work with. Indeed, its so bad that many employers get a portion of the fee income for your 401k, creating a perverse incentive to raise the fees to offset the operating costs.

Don't paint with too broad a brush. Not all 401ks are the same, and you can't give blanket advice and expect it to be relevant to everyone.

height has nothing to do with penis size sadly

>implying he doesn't have some slave to fold it for him

In America the first thing to go would be Social Security, not privately held accounts

Looks like a complete scam to me. I told my parents to put a long put option on all their 401k investments for 2017 and they said that it was not possible. I don't want to be in a situation where I am forced to lose 80% of my savings and it's literally impossible for me to do anything without getting screwed.

The eternal despair of nocoiners. How butthurt will you be when BTC becomes official world currency?

yeah i mean after that. out state pension system will foreseeably collapse in 2018. with the demographic changes the money flowing in does not nearly cover the money flowing out.

when that happens in that very moment the government will have two options 1 they reduce pensions 2 they find some money elsewhere. extra taxes are unlikely and contrary to their previous policies. more debt is also not a path they can openly follow. so that is why i think they will try to postpone the issue by a few years by raiding private savings. first step would be to disallow the option to choose cashout instead of life annuity. then they will simply cut the pensions to size those with private annuity will receive less state pension as it will be distributed based on "need" and stuff like that.

I dont like the thought of locking myself out of my money for a few decades. Yes, its tax-free, and employers will even put more money in with you if you agree. but remember: these are the same people that will ship your job overseas in a heartbeat. they DO NOT have YOUR best interest in mind. They WILL find a way to fuck everyone over. Maybe it hasnt been done yet, but the situation gets more desperate every year.

No one believes social security will be there for millenials, so you should be taking matters into your OWN hands. whatever you are allowed to keep, keep it close, and spend/invest it on your terms.

You do realize that assets in a 401k are legally yours right? The likelihood that an employer will be able to raid it is the same as an employer raiding your checking or brokerage accout.

I dont need an IRA. I have ORB

>our state pension system will foreseeably collapse in 2018

How have you not spent every dollar you own buying ocean-front property in Arizona? Also, how do you not forget to breathe during the day?

i have absolutely no idea what you are trying to say here user.

He's saying that you're expecting huge disasters to happen immediately and in the biggest way possible, and that this is retarded.

this is a Venezula tier policy
if it gets that bad America will not be worth living in

oh shit no i didnt well if the government gives me their reassurance then it that case i think its a great idea.

I started two years ago, I'm 47 lol

I'm 27 but I just started a 401k. I'm not putting much into it though, just $100 a month or so.

I do have a 403b that has vested and I've been contributing to it since I was 25. If I retire at 55 I get 50% pay for life, and if I retire at 65 I get 100% pay for life.

I want to invest enough in my 401k to make up for that other 50%. I'd like to retire at 55. Shit, my parents are 55 now, and that'd be ideal. I only make 70k right now and have some debt that needs to be paid off. Should be debt free in like 3 years though.

Their fees are dumb. I just look at what's in my chase account at the end of the day and round up and add a dollar, then send that to my brokerage vanguard account

>this is a Venezula tier policy
yeah same stupid shit different wrappings

>tfw when u think we live in communism and a lower class doesnt exist

you really should be 18 before posting on this site?

All 401k contributions by employers are legally required to be vested deposits. (That means that the money is yours and only yours, employers have no legal right or the ability to take from your 401k, even if you leave the company.)

?

roth ira is not 100% tax free. you pay income tax on the funds you deposit (unlike the standard ira where those taxes are deferred). basically, use roth IRA to pay income taxes now or use standard IRA to pay income taxes later.

i use a roth.

>coping with the fact that guy is a multimillionaire making mad money on instagram doing nothing while you wagecuck

>has to wagecuck
>calls other poor

it's for wagecuck pussies that think retirement as an old bald man is amazing

>it's for wagecuck pussies that think retirement as an old bald man is amazing

See my posts
There is no reason deferring taxes means you "want to retire as an old man".

pensions are a ponzi. wake up idiot.

Any funds you do have left will be stolen by the government when the finacial crash happens

>pensions are a ponzi.
yes exactly, they are if you think about it. at least in my country maybe in the us the money is actually invested and kept here they just pay out what comes in. which works fine till the demographic grows. but we are now in contraction. shit gonna blow up.

started mine in highschool i've got 180k right now.. not too much, the calculator says when i retire at 60 itll be 15m. that plus other savings and investments and inheritance i'll be paying some serious taxes, hope the army needs some new gear 8)

>big saver
>new company doesnt offer 401k
>only have IRA and HSA to shield my money from the zog machine

what if I don't want to save that much money for when im older?

I have energy now and I want to experience things while im young. I don't give a shit about meeting new people around the world and doing fun stuff when i'm in my 50s or 60s. I don't want to lock 10% of my income away for years as oppose to some other more liquid investment just for some marginal gain where I don't even enjoy that money as much as I would right now.

the only reason you think it sucks to be 40+ is because your entire old retarded family is fat and ugly and miserable and locked down at that age

in reality just save, work out, you'll age like half the amount your fat ugly dumb family did and have an amazing chill care free life when you're their age

not only that but you don't have to lock that much of your income to do it

How old are you now? Have you heard of FIRE?

I started 3 years ago at 35 and its current value is ~$300k after regaining last weeks losses. I guess I should have started at 18.

use a roth ira conversion ladder
also i max out an ira and still make $3k a month after taxes
is that not enough for you to enjoy "muh youth"?

max out 401k*

sorry, i must be paranoid, I just dont trust the government to not pull some totalitarian jewish tricks in the next few decades.

I've been offered a "Simple IRA" at my new job. Should I take it? I don't know I play to stay in that job until I am 65 to retire.

BTW I know absolutely nothing about IRAs or how they work.

>I've been offered a "Simple IRA" at my new job. Should I take it? I don't know I play to stay in that job until I am 65 to retire.
Simple IRAs have mandatory matching or mandatory employer contributions. In other words, FREE MONEY. So do you think FREE MONEY is a good idea?

IRAs are always transferable. You can move them around if you change jobs.

Then google it. You can take your IRA wherever you work, it gets rolled over.

Checked.

And a 401K up to at least the company match is an annual 100% ROI. Even CuckCoin can't match that.

Even if you pay the 10% penalty for cashing out before you're 55, you're still up 80% and the compounding was free.

You are literally leaving a pile of free money on the table for not taking advantage of it.

Most people here live in there parents basements shilling butt coins and specialize in buying high and selling low. You can't reason them, they all have successful businesses lined up ready to take them to the moon.

You can't reason with these people.

I forgot to mention that I make $11/hour.

But I guess its worth it then, even if it means getting less money weekly on my small paycheck.

If you are covering bills and debts then yes make contributions. Pay yourself now and your futureself will thank you.

However if you aren't in school or in a trade you need to look into either and find a better job. 11hr sounds nice at 18-20 years old but it gets old fast.

Already graduated, this job is the only thing that I could get hired for.

Wish I could look for a better job but bills need to be paid. Won't be looking for anything else for at least a year.

Don't be retarded, you can work and look for a job hell at the same time too. Leverage that degree you idiot. What's your degree in?

Computer Engineering
Its not what it sounds like though, may as well have been a liberal arts degree.

>1 post by this ID
>posts a coalburner judging everyone else

i really hate this board sometimes

Lol you're a fool. Even liberal arts majors can find a decent job, better than 11/hr thats for sure. Do you get your degree from a non-accredited university or something? You can find a job with that degree or you can move somewhere that has jobs. How many jobs have you applied for and how many interviews have you done?

Lost track.

This is the only job that I was able to find after a year and a half of unemployment.

Simple math says that if you put away $30k a year for 20 years at an average annual interest rate of 6%, you'll have well over a million dollars.
If you invest that at a 6% fixed annual interest rate you're looking at well over $60k a year to live on in retirement, although I don't know much about fixed income investments so I don't know if that's practical.

I had to put in over 200+ resumes over 3 months to find my job. It's work no doubt but it's really silly to sit there with that degree and not be doing your damndest to find a good paying job. People will hire you for unrelated jobs because of a degree like that.

>Sit there with a degree
>Implying that I haven't submitted hundreds of resumes in that time.

How many interviews have you gotten?

Look man I'm not trying to shit on you but to get that kind of degree which is hard work and settle for 11/hr would really chap my ass. Hell you don't even need a degree to make more than that.

Now that you have a job it'll be easier to find another. Just don't wait too long, or employers will wonder what was wrong with you. Work on building up references, and NETWORK NETWORK NETWORK.

Over half of the jobs I've had were a result of networking. "Frank, we need to add another person. Know anybody ?"

This -> If you're a loser shut in it's time to stop being one.
I believe in you man for what it's worth.