Tfw you realize people didn't setup 401ks and IRAs after college and max them...

haveahappyday
haveahappyday

tfw you realize people didn't setup 401ks and IRAs after college and max them out
they still haven't

Other urls found in this thread:

ssa.gov/history/taxationofbenefits.html

CouchChiller
CouchChiller

maxing out my roth 401k this year

stay poor

VisualMaster
VisualMaster

locking up your money with a bank that gambles it on the market for 40 years
all that wasted opportunity cost
penalized if you want to access it
literally just follows the market, nothing you can't do on your own
evading income tax now to only pay it later under the assumption your income will be lower when you're older (what kind of beta approach to life is this? lol)

literally the most pleb thing you can do is a retirement fund

TechHater
TechHater

I think I'm a super genius who can beat the market
trust me I swear!

JunkTop
JunkTop

roth accounts pay tax now and never owe any taxes on gains for as long as the account exists

StrangeWizard
StrangeWizard

How the hell do you guys even know you're going to be alive by the time you can access that money? The whole concept seems so bizarre to me.

Fuzzy_Logic
Fuzzy_Logic

You can access the money any time

whereismyname
whereismyname

can I set up a roth IRA if I already have a 401k?

Nojokur
Nojokur

you cant touch the money until you are 59 and cant do shit... literally.

Supergrass
Supergrass

wait wat? so the only limitation is that u can deposit a max of 5.5k a year?

Fried_Sushi
Fried_Sushi

never

ssa.gov/history/taxationofbenefits.html

farquit
farquit

the account can be passed on to heirs tax free

yes

social security tax and roth iras literally have nothing to do with each other

takes2long
takes2long

What went wrong in your mind that made you think that page has anything to do with investment arrangements?

lostmypassword
lostmypassword

59
can't do shit

You've got to be younger than 20 with that mindset. That or your parents set a terrible example.

TechHater
TechHater

Are you 100% sure that Roth distributions will *never* be taxed?

eGremlin
eGremlin

You get taxed for taking it out early, unless you use it to pay for a house, medical, or educational expenses.

BinaryMan
BinaryMan

It's easy when you compete with locals. Hard on an international scale as in Public companies/debt financing.

PurpleCharger
PurpleCharger

Fuck off wagecuck. Rich people don't use Roth IRA. They value liquidity and most of their wealth is tied up in their business and properties.

All Roth IRA does is give you a more comfy retirement, but it's not a great tool for those who are risk takers.

BunnyJinx
BunnyJinx

who is Mitt Romney

Fuzzy_Logic
Fuzzy_Logic

then why pay taxes on it before? isn't that a double tax if you don't use it for the things u listed

New_Cliche
New_Cliche

Absolutely no reason to. There's not that much potential revenue there, and the economic benefit of IRAs is enormous.
It would be like suddenly taxing soup kitchens.

whereismyname
whereismyname

they value liquidity so they tie their equity into property, the most time consuming and expensive shit to buy/sell

WELCOME TO BIZ ERRYBODY

Nojokur
Nojokur

How do tax free distributions benefit the government?

Illusionz
Illusionz

You don't compete with locals. Your neighbor's etrade account is less than 0.0000000000000001% of the market. The rest is run by Math PhDs from Harvard and MIT using supercomputer simluations.

Spazyfool
Spazyfool

Ill invest myself so i can pull out when the market crashes

Lunatick
Lunatick

Rich people don't use Roth IRA
Because you can only contribute to an IRA if your income falls below a certain amount.
it's not a great tool for those who are risk takers
It's free money for anyone who qualifies

Booteefool
Booteefool

You normally have to pay taxes on investment income.
If I earn $100 at my job, then invest it and kake another $10 in the stock market, I have to pay taxes on all $110.
If I invested it in a Roth and followed the conditions, I would only have to pay taxes on the $100. The $10 I earned from the market is tax free.

Personal retirement planning benefits the government, because it reduces the reliance on government-run programs. It also keeps the capital in private hands rather than sitting on public books.
In the case of a future budget crisis, personal retirement schemes will be protected because they offer a cheaper alternative to social security.

Harmless_Venom
Harmless_Venom

This doesnt even make sense

viagrandad
viagrandad

People that have Roths can still get SS.

When the unfunded liabilities for entitlement programs cause a reduction in benefits, there is a possibility of a public outcry for the "rich" to pay their "fair share." For example, they could say if you get X amount in Roth distributions, you will face a reduction in SS benefits.

Bidwell
Bidwell

I picked AMD (sold too early, fuck) and PIP, I'm up almost 36% since last August.

iluvmen
iluvmen

You are delusional if you think you're going to get any social security benefits at all.

likme
likme

Ok? So again what makes you think that Roth IRA distributions will be untaxable?

hairygrape
hairygrape

What makes you think the government isn't going to decide to raid your etrade account or your rental properties?

Gigastrength
Gigastrength

Have you heard of capital gains taxes, dividend taxes, rental income taxes and property taxes?

Techpill
Techpill

I'm 70% crypto
Feels good man

happy_sad
happy_sad

401ks are for suckers

FastChef
FastChef

The USA has a growing population, the money is there

they'll just push out the starting age for social security. This is the same as slashing benefits, and it attracts less resistance

basically all the Reddit normies will work til they nearly drop

New_Cliche
New_Cliche

And you would still be better off, because the IRA gains interest while SS money doesn't. Get it?

Need_TLC
Need_TLC

I have $500 in various coins hoping they moon
muh pioneer future gorillianaire

They're offering these tax bonuses as a carrot to get people to save because having a gaggle of old poor people is just a drag.

Booteefool
Booteefool

basically all the Reddit normies will work til they nearly drop

Up until social security though that was how it went, and in some ways I think that's a good thing. I can't imagine retiring at 65 and living to be 100.

just do stuff bro!

35 years is a long time to get things done user

Evil_kitten
Evil_kitten

This.
Also, do pension plans even beat inflation?

Skullbone
Skullbone

t. Buttcoiner

DeathDog
DeathDog

Over 100k actually

TechHater
TechHater

Damn dude you've barely eclipsed my sister's beanie baby collection. You're on fire.

JunkTop
JunkTop

a roth is not run by a bank necessarily.

I trust a roth account over an FDIC bank account under dodd-frank anyway. Banks can't fractionally reserve lend your securities out unlike fiat currency.

PurpleCharger
PurpleCharger

Yes. Investing in index funds and you can expect around 10% a year

CodeBuns
CodeBuns

t. nocoiner

Fuzzy_Logic
Fuzzy_Logic

You can buy the dip on any stock. Look at AMD's past year. That's a real company too, unlike bitcoin.

Nojokur
Nojokur

This entire post is so financially illiterate it hurts to read.

Illusionz
Illusionz

Yes. Investing in index funds and you can expect around 10% a year

pffft

we'll be lucky to get 5% a year for the next 5 to 10 years

lucky to beat inflation by 2%

kill me

haveahappyday
haveahappyday

average return on sp500 over 100 years is 10%

w8t4u
w8t4u

i have a roth IRA with Ameriprise. half of my money is in cash equivalencies and the other half is in equities. I contribute 30% of my income to it.

Bidwell
Bidwell

BTW, i opened this account with a 2k principle and didn't start contribootin until i was 29. i only have myself to blame. i pissed away a lot of money after college

iluvmen
iluvmen

we all need to prepare for retirement . not a single one of us in the U.S. can count on social security alone when we are old. and i sure as hell don't want to be 70 years old working at dunking donuts just to pay my bills

idontknow
idontknow

ya im a wagecuk now. But I figure if I pay my dues now then I won't have to rely on anyone when I don't feel like working anymore. And I guarantee that day will come. I will not be like one of these 65 year olds who tries to retire but gets too bored and goes back to work. The only thing Ill be working on is my golf game when i retire.

likme
likme

Nocoiners are always so mad. Get some coins and be happy :)

kizzmybutt
kizzmybutt

Have you never heard, "past performance does not guarantee future returns" in your life? It legally has to be stated by financial advisors for a reason.

Do you seriously think an average (which includes major upswings and also large pullbacks) over n=100 should be used in investment decisions? Try doing some thinking for yourself and stop letting passive-minded money managers waste working days on the golf course while they park your money in an index fund.

hairygrape
hairygrape

Why not just save it yourself?
Use it to invest in your house.

Gigastrength
Gigastrength

i do that too.I contribute 30% to my IRA and 20% to a money market account. Ill eventually use that for a down payment on a house.

Flameblow
Flameblow

So what if you use it all for a house?

Real estate is one of the surer investments, and that way you can actually enjoy your money before you're old.

ZeroReborn
ZeroReborn

because I've already saved almost half of what i need for a down payment and Im only 30 y/o, considering I'm appx. 35 years away from retirement, I need to keep saving for that.

FastChef
FastChef

plus i don't really look at youth as time to be enjoyed. id rather put the work in now while i have the energy and enjoy life and my money when Im old

StrangeWizard
StrangeWizard

You're 30 and only have half of your downpayment?

Are you renting right now, or living with your parents?

Either way, you should have used your retirement money to help pay for your house.

Money not used is wasted money.

Fuzzy_Logic
Fuzzy_Logic

So if I can just pass it to heirs, and I don't want kids, what's the point?

Supergrass
Supergrass

another waggie coping with muh retirement
Good goy. Keep waging until you are old bald and useless.

Need_TLC
Need_TLC

Enjoy being rich. Nocoiners will keep coping with their commutecucking until they get cancer.

Booteefool
Booteefool

not using a HDHP with an HSA
not maxing your 401(k)
not using the mega backdoor and ordinary backdoor
The $40k+ of Roth contributions each year is available forever, and then the 401(k) money is available with a 5-year delay by rolling it into a tIRA and doing partial conversions.

I swear, even for Veeky Forums this thread is stupid. Your money is not tied up for 45 years, "rich" people absolutely do use tax-advantaged accounts because they're fucking tax-advantaged, it's not "gambling on the market" to buy and hold indexes or a diversified collection of stocks, and your relative tax rate in retirement vs now is how you decide between using a Roth or traditional account not how you decide whether to use a tax-advantaged account at all.

To add to this, retirement accounts are protected in bankruptcy and have estate-planning advantages.

And Roth distributions are not ever going to be taxed. At best they will be used in means-testing for SS, but that's so far down the line that if you're planning so far ahead you shouldn't be planning to have SS in the first place.

Evil_kitten
Evil_kitten

Capital gains tax for stock held for a year or more is zero if you are in the 10% or 15% tax brackets.

So 401ks only make sense if you make more than 37k/ yr single or if you are somehow married, more than 75k/yr.

So for the average broke autistic kid on Veeky Forums, a Roth account makes no sense at all since it'd provide no benefit and only waste money if you want to capitalize on your gains.

w8t4u
w8t4u

Capital gains tax for stock held for a year or more is zero if you are in the 10% or 15% tax brackets.

This is true, and i get that most of Veeky Forums is not going to be putting away even the measly $7k/year it would take to get a million 2017 dollars into their 401(k) after 45 years (at which point your drawdowns will likely exceed $37k and you'll be being taxed on them). But another advantage is that cap gains taxes have gone up and down, the 0% bracket has changed, etc., whereas Roth contributions have been consistently taxed at 0. So the Roth gives you more certainty.

askme
askme

rich people don't do this that's what I read on the internet because I've never actually been around money in my life
Confirmed for being 15 years old.

LuckyDusty
LuckyDusty

I max out my 401k and Roth IRA. Should I get a Roth 401k or a trad IRA next? 24 years old. 15% bracket.

VisualMaster
VisualMaster

roth 401k is the best of both worlds.

Stark_Naked
Stark_Naked

I do the 401k cause of my company's match. I like the tax free withdrawal of the Roth IRA so yeah, I'll probably setup the Roth 401k in a little bit.

Raving_Cute
Raving_Cute

yes i live with my parents at the moment

Soft_member
Soft_member

Note that if you have maxed out your 401(k) you can't then have a Roth 401(k), the limit applies across both. (Ditto for the limit across tIRA and rIRAs.)

I personally would stick with the t401(k)/rIRA combination for the sake of tax diversity. I'd avoid putting pre-tax money into a tIRA for any reason because this will interfere with your ability to do backdoor Roth contributions.

If you can, use the mega backdoor Roth to greatly increase the amount of money you can get into your rIRA. Ideally you'll have enough money in there that you'll be able to supplement your 401(k) withdrawals such that they never go past the 15% tax bracket.

Having said this, because you're only in the 15% bracket right now, your effective tax rate is probably under 10%, so it probably makes sense to just do a Roth 401(k). If you can do in-service rollovers try to rollover the money from your r401(k) into your rIRA as soon as possible. (There's no reason to do this unless the fee structure of your 401(k) is shitty, I just prefer IRAs because they're fully in your control.)

Emberburn
Emberburn

My bad, I get what you mean since it's maxed. What's the mega backdoor Roth you're talking about? My employer match is 5k so I'll probably stick with that but like I said I max my Roth also.

TalkBomber
TalkBomber

Ok somebody explain this shit to me;

Why the fuck would anyone want a Traditional IRA?

Seriously? With Roth you can get to your investment and do w/e the fuck you want with it because its already taxed. With a Traditional IRA you cant get to it until you are 59.5 years old.

SniperWish
SniperWish

Also please explain the pre-tax/after tax part and how that let's me backdoor contributions. I have a HDHP/HSA btw

TurtleCat
TurtleCat

he hasn't maxed his Roth IRA out since age 18

What are you, poor?

CodeBuns
CodeBuns

pulling out when the market crashes
not buying more while the market is low

New_Cliche
New_Cliche

exactly

Harmless_Venom
Harmless_Venom

mfw 18 year old neets on Veeky Forums are making more money with robinhood and cryptocurrency then "educated" people in debt maxing out their 401ks

Soft_member
Soft_member

and then you woke up

w8t4u
w8t4u

ok wageslave

Inmate
Inmate

if your income is surprisingly high right now, your traditional ira contributions are not taxed, obviously. if you assume your income will drastically decrease in the future, your traditional ira withdrawals will likely not be taxed as high as they would right now.

they both have uses, but roth assumes youre gonna be earning way more in the future.

earning 5.5k in the 39% tax bracket is taxed more than earning 5.5k in the 15% tax bracket, simple as that.

Playboyize
Playboyize

who says I don't have both user?
One for retirement and one for speculation.
Ever read the intelligent investor?

likme
likme

The mega backdoor Roth is that if your 401(k) plan supports after-tax contributions and in-service rollovers, you can contribute up to the full $54k 401(k) limit then roll over the excess (everything past the $18k tax-advantaged limit and employer contribution) into a Roth IRA.

The result is that you get up to $36k of extra rIRA room in a year.

lostmypassword
lostmypassword

If you are past the income limit for a tIRA, you can contribute after-tax money (to do this you need to fill out form 8606) up to $5500 and then convert it to Roth. This is useful if you're past the income limit for directly contributing to a Roth.

I explained the "mega" backdoor Roth in the above post.

VisualMaster
VisualMaster

either get taxed on this money now, and get absolutely fucked in the butt so that the niggers and single moms of america can get their welfare checks, or start your investments in an account that is protected from bankruptcy and the ideal place to hold something like stocks
knowing this choice, come into this thread of NEETs, absolutely massive fucking idiots, still calling this a "retirement account"
still pushing the social security will be gone meme
still fucking dakimakuras in the basement

hey morons, you know what rational people with acceptable incomes have after maxing out their tax advantaged space? a ton of money left over to get whatever the fuck they want

literally never happened

PackManBrainlure
PackManBrainlure

I remember when 100k was a lot of money.

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