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

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

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maxing out my roth 401k this year

stay poor

>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

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

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

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.

You can access the money any time

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

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

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

>>never

ssa.gov/history/taxationofbenefits.html

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

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

>59
>can't do shit

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

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

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

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

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.

>>who is Mitt Romney

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

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.

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

WELCOME TO BIZ ERRYBODY

How do tax free distributions benefit the government?

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.

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

>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

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.

This doesnt even make sense

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.

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

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

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

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

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

I'm 70% crypto
Feels good man

401ks are for suckers

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

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

>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.

>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

This.
Also, do pension plans even beat inflation?

>t. Buttcoiner

Over 100k actually

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

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.

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

>t. nocoiner

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

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

>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

average return on sp500 over 100 years is 10%

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.

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

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

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.

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

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.

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

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.

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.

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.

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

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.

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

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

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

> 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.

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.

> 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.

>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.

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

roth 401k is the best of both worlds.

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.

yes i live with my parents at the moment

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.)

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.

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.

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

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

What are you, poor?

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