Wait, is Julia arguing you should NOT use tax advantaged retirement accts? Jfc
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Poast new message in this thread
Date: January 20th, 2018 6:33 PM Author: stimulating voyeur
I don't think she said that.
I think her argument is this. Roth-IRAs are just as a good a vehicle for saving for kids' college education as 529s. Which is true. Infact they are better because what is in your IRAs cannot be considered when evaluating how much financial aid to provide. So she is right here.
(http://www.autoadmit.com/thread.php?thread_id=3865714&forum_id=2#35198842) |
Date: January 21st, 2018 7:21 PM Author: White passionate stage persian
I have never said any such thing. Roth IRAs are terrific, and even 401Ks offer some modest benefits ( they’re just not the holy grail everyone portrays them as). For most middle-income earners, however, 401Ks remain the best option, because they offer essential protections ( from raiding th cookie jar; from bankruptcy; delaying taxes) that are worthwhile.
The best approach is always to diversify retirement accounts - have some money each in taxable and non-taxable holdings. We aren’t clairvoyants and can’t predict all the nuances of future tax brackets and cash flow needs. I would just suggest you shouldn’t hold the majority of your retirement funds in a 401k, because they’re the least flexible account type.
(http://www.autoadmit.com/thread.php?thread_id=3865714&forum_id=2#35205240) |
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Date: January 21st, 2018 7:27 PM Author: White passionate stage persian
Wtf? Have you been reading what I’ve been writing? I’ve specifically said you should max out 401k first. That’s like the cardinal rule of personal finance that everyone learns at their first job. It goes without saying.
That said, the order of contributions could, under some circumstances, arguably be better if you:
1) Contribute to 401k up to th company match
2) Contribute to a Roth
3) Contribute to an HSA if there’s a match
4) Anything left can again start going into a 401k
(http://www.autoadmit.com/thread.php?thread_id=3865714&forum_id=2#35205297)
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Date: January 21st, 2018 7:50 PM Author: Concupiscible peach forum
"it makes sense to hold 401k, Roth, and taxable funds in order to satisfy myriad potential eventualities and tax/income scenarios."
see also http://www.xoxohth.com/thread.php?thread_id=3865563&mc=60&forum_id=2#35197984:
"4) 401K fees and offerings are often less advantageous than a taxable account.
5) Funds in a brokerage account can be converted into IRAs, or you can pool many account types, making you a preferred customer and qualifying you for preferential treatment/rates.You can't convert a 401K into anything except a rollover account.
6) Opportunity cost of keeping money tied in a 401K and not invested more lucratively elsewhere.
Again, the advantages of a 401K are limited to 1) Employer match 2) bankruptcy protection, 3) lowering current taxable income ( for IBR or PAYE, for example), and 4) encouraging undisciplined savers to keep heir hands out of the cookie jar."
(http://www.autoadmit.com/thread.php?thread_id=3865714&forum_id=2#35205565)
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Date: January 21st, 2018 7:52 PM Author: indigo striped hyena
I think most of this advice is just tinkering at the margins for most people, given the sums involved. The only exception is to contribute to a tax sheltered account before a taxable account.
People would be better served learning about how to avoid getting gouged on their home purchase.
(http://www.autoadmit.com/thread.php?thread_id=3865714&forum_id=2#35205584) |
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