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Old 02-24-2018, 06:43 PM
 
857 posts, read 830,630 times
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Quote:
Originally Posted by Rollingon View Post
Thanks. Really looking forward to it.

Also others who chipped in with your advice. I will be researching all those options. Aim is to educate myself to a level where I can project and meet targets.
Forget about “projections” and” targets. Follow the advice on this thread. Max your 401k and contribute monthly to a Roth IRA. Treat these like they were bills. Choose an index fund from Vanguard like the Vanguard 500 to invest in. Then forget about it.
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Old 02-24-2018, 06:46 PM
 
857 posts, read 830,630 times
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If you don’t have a 401k then open an index fund at Vanguard and write a check every week for 10% of your income. Do this like it was a bill every week and you will do fine.

You can educate yourself along the way. Don’t miss out on savings while your trying to educate yourself.
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Old 02-25-2018, 10:53 AM
 
Location: NJ
31,771 posts, read 40,580,083 times
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Quote:
Originally Posted by HudsonCoNJ View Post
Contributing the max $18,500 a year into a tax deferred 401k can have huge benefits. It can put you in a lower tax bracket depending on your income and there’s the obvious savings in taxes now. And if you’re contributing to a Roth 401k you’re taking advantage of tax free growth to protect against whatever tax rates may look like when you retire. I don’t know how you would consider that I significant.

The only downside I see really is the penalty imposed for taking money before retirement age. It’s my money, the government shouldn’t tell me when I can touch it. Although I imagine some people could use the forced discipline
there is no savings in taxes now. it is just deferred. since that money is now locked in a 401k, its not like you can say "yeah well you dont have to pay the tax now so you keep that money." as that invested money grows, so does the tax obligation. you are also going to pay it all out at your income tax rate and not at a long term capital gains rate.

you are giving up control over a lot of your money. rules regarding 401k's can change at any time and if your money is stuck there; you are subject to them.

i understand that there are strategies to minimize taxes on distributions and you may very well end up financially ahead. but it isnt a guarantee, even if it is it isnt likely a very large difference and the government is evil and now holds your retirement in its hands.
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Old 02-25-2018, 02:41 PM
 
19,066 posts, read 25,221,023 times
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I finally found the time to send the OP a detailed DM.
Please check your messages, Rollingon.
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Old 02-25-2018, 04:52 PM
 
625 posts, read 795,301 times
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For those interested in ETFs or Vanguard Index Funs, realize that you likely own gun related manufactures and cannot restrict them from being purchased. With active management you can restrict industries or individual stocks.
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Old 02-26-2018, 06:40 AM
 
386 posts, read 613,070 times
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Quote:
Originally Posted by Retriever View Post
I finally found the time to send the OP a detailed DM.
Please check your messages, Rollingon.
Thanks a lot. It really helps me focus
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Old 02-26-2018, 07:56 AM
 
520 posts, read 987,104 times
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Quote:
Originally Posted by CaptainNJ View Post
there is no savings in taxes now. it is just deferred. since that money is now locked in a 401k, its not like you can say "yeah well you dont have to pay the tax now so you keep that money." as that invested money grows, so does the tax obligation. you are also going to pay it all out at your income tax rate and not at a long term capital gains rate. .
But how about you sell it in small bits every year once one retires? It would be taxed at lower brackets.
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Old 02-26-2018, 08:12 AM
 
Location: NJ
31,771 posts, read 40,580,083 times
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Quote:
Originally Posted by Shet View Post
But how about you sell it in small bits every year once one retires? It would be taxed at lower brackets.
that is definitely the idea and the primary way to benefit (and many people can and do benefit this way). however, it isnt a guarantee that taxes will be lower at that time and because you have put your money there you are stuck with whatever the government decides.
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Old 02-26-2018, 10:23 AM
 
Location: Bergen County, NJ
4,016 posts, read 3,583,522 times
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Quote:
Originally Posted by CaptainNJ View Post
that is definitely the idea and the primary way to benefit (and many people can and do benefit this way). however, it isnt a guarantee that taxes will be lower at that time and because you have put your money there you are stuck with whatever the government decides.


Well then, the solution is a Roth 401k
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Old 02-26-2018, 03:16 PM
46H
 
1,648 posts, read 1,389,144 times
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Quote:
Originally Posted by CaptainNJ View Post
that is definitely the idea and the primary way to benefit (and many people can and do benefit this way). however, it isnt a guarantee that taxes will be lower at that time and because you have put your money there you are stuck with whatever the government decides.
It is possible that US tax rates will be higher when you retire versus when you are working, but the odds are that they won't be higher. In addition, the odds are higher that you will have less income when you retire and will therefore pay the taxes on your withdrawals at lower rates.

If tax rates and the 401K rules do not change when you reach retirement and you are paying at higher rates, that just means you saved more than enough money for your retirement. That is good news. There are ways to avoid this "problem", too, as you can adjust what you put in the 401K throughout your career and balance things with a Roth and savings outside retirement accounts.
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