What’s your 401K doing?

[Newbie2012]

14 minutes ago, HuntHarder said:

Common misconception on roth 401k vs roth ira.  Imo, if employer offers roth 401k, it's a no Brainer.  Income limits prevent contributions to Roth ira, but not roth 401k.  

Yup. If your plan offers it, it’s a great option!

[stanley]

Making more sense now.....    From Investopedia:  Like traditional 401(k)s, contributions are made directly from an employee's paychecks and the employer may match part of those contributions. Like Roth IRAs, the income taxes are paid on that money before it goes into the account, so withdrawals will not be subject to income tax down the line.

It's a post-tax contribution, as with a Roth IRA.   Still a GREAT option for those looking to max-out above and beyond the standard $22.5/$27K pre-tax limit.

 

 

[Newbie2012]

Just remember, you have to start taking minimum distributions at age 72 if you don’t start sooner to avoid penalties. (Roth)

[HuntHarder]

36 minutes ago, stanley said:

Making more sense now.....    From Investopedia:  Like traditional 401(k)s, contributions are made directly from an employee's paychecks and the employer may match part of those contributions. Like Roth IRAs, the income taxes are paid on that money before it goes into the account, so withdrawals will not be subject to income tax down the line.

It's a post-tax contribution, as with a Roth IRA.   Still a GREAT option for those looking to max-out above and beyond the standard $22.5/$27K pre-tax limit.

 

 

Exactly, difference between Roth 401k and after tax contributions is Roth 401k earnings grow tax free.  Standard after tax contribution earnings grow tax deferred and you will pay taxes on your earnings upon withdrawal.  Talking with an experienced tax guy will pay off tenfold in my opinion.  I suggest everyone have a consultation at a minimum and see which route works best for you.  

[HuntHarder]

1 hour ago, ShutYourLib said:

Exactly. I am curious if there is a way to contribute more to a Roth that I don’t know about.  Max contribution for 401k is $20,500 for 2022, but max allowable Roth contributions are capped at $6000 in 2022 if under the age of 50, and $7kmif over the age of 50.  I am curious if you are doing a back door Roth, and how that works if that’s what you are doing. If your brokerage account has a setting that allows you to allocate more than 6k to your Roth, you should probably talk to a tax advisor very soon as you could have repercussions for going over max roth limits.  

Quick Google search roth 401k vs. Roth ira..

[MULEPACKHUNTER]

only a few downsides on the roth 401 along with weather your employer offers it or not.

1- minimum distributions 

2- fees are high on most plans

3 - very limited options to invest

Roth Ira allows full control with almost zero fees 

If i could go back I would have maxed out the roth ira every year instead of putting any extra in my traditional 401. 

I have bought more shares in the last few months than I have in a long time, you never know but if history serves it should pay off in years to come. I just pushed a bunch of cash into the 401 that i wasnt planning on due to the discounted prices of late. When this thing comes rolling out of this hole its going to be smile city. Then it just needs to hold up until im ready to use it, thats the hard part. timing when you want to use the money and where the markets are at that point.

One thing Crypto taught me is how to be ok with down swings and instead of getting flustered I just toss another hundred in. Funny Crypto is the only thing Im green on right now.

[MULEPACKHUNTER]

something to think on when looking for funds to buy. How many share can you get into?

For me the more shares the better, if you buy 1 tesla share and it goes up 10 bucks great you made 10 bucks.

If you buy a ten dollar share 10 times and it goes up ten bucks well now your talking. VUG mentioned above has been a good performer and my wife is in it pretty heavy but recently it was up in the 320 a share range and we offloaded a portion of that in lue of another fund in the 60 dollar range that owns the same companies just to get the share count up overall. of course the leverage is different in the cheaper fund but so far it has played out well ahead of owning VUG alone just on the share count.

[MULEPACKHUNTER]

Whats the most expensive per share investment you own?

Mine is Bitcoin and Ethereum. Much heavier on the Ethereum side, I have a date set to own 1 Bitcoin then I think im done on that front, just be cool to have one full share.

Berkshire class A anyone?

[Newbie2012]

1 hour ago, MULEPACKHUNTER said:

Whats the most expensive per share investment you own?

Mine is Bitcoin and Ethereum. Much heavier on the Ethereum side, I have a date set to own 1 Bitcoin then I think im done on that front, just be cool to have one full share.

Berkshire class A anyone?

VTI is my highest per share in any of my investments. It sits in my personal Roth and I keep accumulating shares, making the max contributions allowed per year at my age. It’s been very good to me.

[muledeerarea33?]

Lots of good info in here! Sounds like no gain or loss for 8-9 months is a good thing. My company recently offered the Roth 401k option which I jumped at. This will be the first year of it. So essentially now, if I decide to take investment money before the age of 60 (55) what would be a good secondary option to invest in? I already own a piece of land, don’t want to be a landlord. I’m thinking mutual funds and if I go at 55 then I’ll go part time at ace hardware til 60 and be done!

[cjl2010]

2 hours ago, muledeerarea33? said:

Lots of good info in here! Sounds like no gain or loss for 8-9 months is a good thing. My company recently offered the Roth 401k option which I jumped at. This will be the first year of it. So essentially now, if I decide to take investment money before the age of 60 (55) what would be a good secondary option to invest in? I already own a piece of land, don’t want to be a landlord. I’m thinking mutual funds and if I go at 55 then I’ll go part time at ace hardware til 60 and be done!

Don’t forget your tax liability if you pulled your trad 401k and went all Roth.

[muledeerarea33?]

1 minute ago, cjl2010 said:

Don’t forget your tax liability if you pulled your trad 401k and went all Roth.

I didn’t pull my previous, I only started this year with the Roth option.

[dusty]

2 hours ago, muledeerarea33? said:

Lots of good info in here! Sounds like no gain or loss for 8-9 months is a good thing. My company recently offered the Roth 401k option which I jumped at. This will be the first year of it. So essentially now, if I decide to take investment money before the age of 60 (55) what would be a good secondary option to invest in? I already own a piece of land, don’t want to be a landlord. I’m thinking mutual funds and if I go at 55 then I’ll go part time at ace hardware til 60 and be done!

Over 80% of mutual fund managers don't beat the S@P 500 index and charge you. 

[MULEPACKHUNTER]

19 hours ago, Newbie2012 said:

VTI is my highest per share in any of my investments. It sits in my personal Roth and I keep accumulating shares, making the max contributions allowed per year at my age. It’s been very good to me.

that fund seems pretty stable and actually has followed the market. 

Its really tough to make selections, I though for sure It was the perfect time to buy a few months back after earnings hit on most companies so I started adding to current positions and added a few new ones based on 50 percent correction and guess what, bragged on it a few days and bam, down another 10 percent. So bought more shares and then bam, down another 10 percent. Its a viscous cycle right now. I had to cut myself off. Decided I would wait for a few days of gains before buying any more. 401k is still getting funding but holding off a bit for anything else.

[Newbie2012]

3 hours ago, MULEPACKHUNTER said:

that fund seems pretty stable and actually has followed the market. 

Its really tough to make selections, I though for sure It was the perfect time to buy a few months back after earnings hit on most companies so I started adding to current positions and added a few new ones based on 50 percent correction and guess what, bragged on it a few days and bam, down another 10 percent. So bought more shares and then bam, down another 10 percent. Its a viscous cycle right now. I had to cut myself off. Decided I would wait for a few days of gains before buying any more. 401k is still getting funding but holding off a bit for anything else.

Yeah, it’s a roller coaster for sure. It’s why I rarely log on and check. Only when I buy more shares do I see the action. 
 

Like other Vanguard funds, VTI share price has doubled in 5 years. I’ll continue to accumulate, albeit with less buying power, but if it doubles again in 5 years, I can tell my boss I’m on permanent vacation! 🎣🏕