Contribute to 401K vs Roth 401K Contribute to 401K vs Roth 401K - Page 2 - Talk of The Villages Florida

Contribute to 401K vs Roth 401K

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  #16  
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Ramblnman Ramblnman is offline
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Default Roth ira - best tax shelter for ordinary people

Continue to contribute the maximum to your 401K and take advantage of your employer match.

During your working years, contribute to a "Back-Door Roth" and if you are married and your wife is over fifty, you can both contribute $ 8,600 each and never concern yourself with taxes on those contributions or growth ever.

If you retire at 57, and you stay under the 1st or 2nd, (maybe even the 3rd) tiers of tax you can start conversions into your Roth up to those maximums until your full retirement age and better yet at age 70 and potentially could accumulate a very large "Non-Taxable" Retirement Nest Egg.

Not investment advice, just my personal opinion of a pretty good plan considering your age options.

I retired at 55 and my wife at 59...and never looked back...

Good Luck!

Quote:
Originally Posted by BuyckCabin View Post
Looking for a sounding board.

I’m 50. planning on retiring at 57.

I’ve been maxing my 401K this year, and whatever the max will be next year, etc. I am debating maxing the Roth 401 instead. But that means I know I’ll pay 22% tax on that money (Federal). I live in FL so no state.

I was planning on converting $100,000 a year after I retire. BUT, I’ll be living in MN. Thus paying 12% federal and 7.85% in MN. Thus paying 19.85% total. At face value, the later looks slightly better. But I get an employer match would nullify the 2027 taxes I pay if I do the ROTH 401. I wonder if doing it 7 years earlier would be beneficial.

The wife will stay working after I retire. So we will have a minimum of 80k taxable income when I’m retired.
  #17  
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Boilerman Boilerman is offline
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In response to post #10 by Maker
Two errors:
Doing Roth conversion in multiple years does NOT require separate accounts. As long as the Roth has been open 5 years, you’re good.
The break even for social security payments, whether you claim at 62 or 70, is usually around 80. Not late 80s.
  #18  
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GWilliams GWilliams is offline
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Quote:
Originally Posted by dewilson58 View Post
Dude, this ain't the place for advice.

PERIOD
Village advice not financial advice.
Talk of the Villages? Is financial advice banned for scammers? LOL
  #19  
Unread Today, 10:12 AM
Ramblnman Ramblnman is offline
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Residents of TV have years and years of life experience. In addition, they have made all sorts of life decisions and have experienced the "Ups & Down" of the last 50 years or more of Financial Markets.

Dude, this may not be the place to go for Financial Advice, however; I learned a long time ago to listen to the wisdom that have been there before you. Costs nothing to listen to our residents convey their opinions and experiences.

In my opinion, I trust the opinions of TV's and their experiences than most Financial Advisors that probably have their financial interests ahead of yours. Or some 25 year old MBA Finance Graduate that steers you into a never-ending rising stock market that has only seen low mortgage rates and hyper-inflated Real Estate.

Just my opinion but I appreciate the financial posts on the forum. I'll do my research, and if I can benefit from that advice...thank you for the "heads-up."
  #20  
Unread Today, 11:19 AM
manaboutown manaboutown is offline
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Different strokes for different folks.

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Warren Buffett’s Deputy Ted Weschler Paid About $28 Million in Taxes in 2012 to Convert His IRA to a Roth. It’s Now Worth $264 Million, Will Never Owe an RMD, and the $500,000 Version Has a Deadline of Age 73
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