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A 401k has a 17500.00 max contribution and that can go 401k, roth 401k or any combination of the two there isn't an income limit within the 401k. If your husband makes 175000 a year do you also work? With the higher possible tax bracket why are you giving up the reduced tax bill now?
I haven't been working. I might be doing a little pet sitting on the side in the coming year, but informally
I think the reason why we are giving up the reduced taxes now is because in a Roth 401k we are taxed on today's value and in a traditional 401k we will be taxed on the total value. I would rather see my 17,500 taxed today and grow TAX FREE FOR DECADES instead of paying 17,500, watch it grow and getting taxed on pay out....unless I'm missing something.. you always seem more articulate and knowledgeable on the subject so let me know if this is not right.
I have my Roth with Fidelity, I've been happy with them thus far. I'm unemployed right now, but I contribute regularly even if it's just small amounts here and there. It all adds up!
I haven't been working. I might be doing a little pet sitting on the side in the coming year, but informally
I think the reason why we are giving up the reduced taxes now is because in a Roth 401k we are taxed on today's value and in a traditional 401k we will be taxed on the total value. I would rather see my 17,500 taxed today and grow TAX FREE FOR DECADES instead of paying 17,500, watch it grow and getting taxed on pay out....unless I'm missing something.. you always seem more articulate and knowledgeable on the subject so let me know if this is not right.
If your tax rates are the same now vs retirement the Ira vs Roth is actually no different. If you're in a 28% bracket now a 17.5k contribution saves you 4900 right now. If you go Roth you put in 17.5k and pay the 4900 in taxes for a total of 22.4k.
If you invested 17.5k a year for 30 years @ 8% return you have 2.17mm
With the regular 401k option you should have roughly 300 a month or more extra after taxes due to reducing your tax liability. If you invested 300 a month for 30 years @ 8% you have an additional 447k and that could be in a regular brokerage account or a Roth IRA.
Regular 401k route
401k 2,175,000
Roth IRA or taxable account 447,000
Roth 401k
2,175,000
People also really attempt to simplify this choice upfront as in pay taxes now or later when it's a lot more complicated than that. Mathjak has pointed out how much money you can take out of your Ira with an effective tax rate in the single digits.
Your best savings plan would be for your girlfriend to keep a full time job that pays more than 26k a year and keep that up. Don't spend so much time figuring out what you are going to do with 9k when you could collectively increase total income multiple times more than that
Well, beings I travel the country for work and she comes with, that's not always the most practical. Some places we are there for 2 months, some places 10 months. Often we don't know for sure, and often it's in a small town with nothing nearby. Not to mention she's 20 years old and I'm 26.. Not like there's a lot of 20 year olds out there making 6 figures. I've been making over 100k since 23 or 24 but I'm hardly the average.
Whether she works or not isn't the issue. Once I pay down some debt, decrease my monthly bills, and save up for around a house down payment, we will quit traveling and I'll take a permanent job somewhere and the paycut that comes along with it. Then, she will go to school for nursing and will have a decent career and we will be set.
Regardless of my gf working or not we do fine. I have saved an average of $2625 over the last 7 months (since I've diligently been keeping track). In August I saved nearly $4000 including the week vacation I took. Once I pay off my student loans and truck I'll be averaging around $3500-$4000/mo easily in savings.
While I appreciate your honesty, not everyone's situations are the same, and not everyone can just go out and find some good paying job regardless. I've dated girls that make 100k-150k before. Girls I like enough to put up with are hard enough as is, put income requirements on it, and it's near impossible for me.. I've been on dates with hundreds of women, literally, and I'm well past the point that their income would sway my decision over about 1000 other factors I've learned to put ahead of it.
Last edited by houstan-dan; 09-17-2014 at 02:34 PM..
Well, beings I travel the country for work and she comes with, that's not always the most practical. Some places we are there for 2 months, some places 10 months. Often we don't know for sure, and often it's in a small town with nothing nearby. Not to mention she's 20 years old and I'm 26.. Not like there's a lot of 20 year olds out there making 6 figures. I've been making over 100k since 23 or 24 but I'm hardly the average.
Whether she works or not isn't the issue. Once I pay down some debt, decrease my monthly bills, and save up for around a house down payment, we will quit traveling and I'll take a permanent job somewhere and the paycut that comes along with it. Then, she will go to school for nursing and will have a decent career and we will be set.
Regardless of my gf working or not we do fine. I have saved an average of $2625 over the last 7 months (since I've diligently been keeping track). In August I saved nearly $4000 including the week vacation I took. Once I pay off my student loans and truck I'll be averaging around $3500-$4000/mo easily.
While I appreciate your honesty, not everyone's situations are the same, and not everyone can just go out and find some good paying job regardless. I've dated girls that make 100k-150k before. Girls I like enough to put up with are hard enough as is, put income requirements on it, and it's near impossible for me.. I've been on dates with hundreds of women, literally, and I'm well past the point that their income would sway my decision over about 1000 other factors I've learned to put ahead of it.
Do you not have a place to live at "home"?
If she couldn't work she could be currently working on her nursing degree so that she could work a couple of years sooner. IMO you two are making a mistake not getting ahead while you are young. Another truth is she's 20 and in 10 years there are better odds you won't be together than will have made it another 10. She's an adult at 20 but living more like a child of yours. Again all my opinion and they are like *******s but that's that.
If she couldn't work she could be currently working on her nursing degree so that she could work a couple of years sooner. IMO you two are making a mistake not getting ahead while you are young. Another truth is she's 20 and in 10 years there are better odds you won't be together than will have made it another 10. She's an adult at 20 but living more like a child of yours. Again all my opinion and they are like *******s but that's that.
She will be taking classes, right now we are thinking we will travel around 3-4 more years but "could" be potentially as much as 6. I'd like to be debt free and have at least 100k saved for a house down payment and extra large emergency fund to hold over until she finishes school. I think I can do that in about 4-5 years max, so I'll be around 30-31. Nursing pre-requisites are only valid for 5 years before starting the program. Once we are positive we are within about 2 years she will ABSOLUTELY get all of her pre-requisites done that she can ahead of time.
And no, we don't have a place to live at "home." We have a 5th wheel travel trailer that we live in full time. I receive $650/wk tax free per diem for "living expenses" to travel, so with my $460 trailer payment and $500 lot rent, I make out like a bandit.
You are absolutely correct about your odds. Like I said, I have dated a gross number of women over the years. I have been with her 2.5 years. I feel very confident that we will be fine, however. We get along ridiculously amazing having lived together for 2 years. Our biggest disagreements usually consist of who "has" to pick what movie we watch or where we go to dinner, since neither of us care and we're both so laid back.
If I decide to pay off my student loans right now, then do the IRA thing at the end of the year, my next purchase will likely be an engagement ring and then get married after we pay off my truck. So fortunately with her I feel pretty good, and like I mentioned, she's incredibly low maintenance and money savy so that helps. Her idea of shopping is getting a $12 purse or $9 dress at wal-mart, in which case she would still ask me prior to purchasing it.
She will be taking classes, right now we are thinking we will travel around 3-4 more years but "could" be potentially as much as 6. I'd like to be debt free and have at least 100k saved for a house down payment and extra large emergency fund to hold over until she finishes school. I think I can do that in about 4-5 years max, so I'll be around 30-31. Nursing pre-requisites are only valid for 5 years before starting the program. Once we are positive we are within about 2 years she will ABSOLUTELY get all of her pre-requisites done that she can ahead of time.
And no, we don't have a place to live at "home." We have a 5th wheel travel trailer that we live in full time. I receive $650/wk tax free per diem for "living expenses" to travel, so with my $460 trailer payment and $500 lot rent, I make out like a bandit.
You are absolutely correct about your odds. Like I said, I have dated a gross number of women over the years. I have been with her 2.5 years. I feel very confident that we will be fine, however. We get along ridiculously amazing having lived together for 2 years. Our biggest disagreements usually consist of who "has" to pick what movie we watch or where we go to dinner, since neither of us care and we're both so laid back.
If I decide to pay off my student loans right now, then do the IRA thing at the end of the year, my next purchase will likely be an engagement ring and then get married after we pay off my truck. So fortunately with her I feel pretty good, and like I mentioned, she's incredibly low maintenance and money savy so that helps. Her idea of shopping is getting a $12 purse or $9 dress at wal-mart, in which case she would still ask me prior to purchasing it.
Your plans are great for you, but are they great for your gf?
First of all, at 20 it's VERY important to be working towards a career if you ever want a chance at getting ahead. It's risky to put off the education for 5 years and it's unrealistic that you'd expect for her to complete these courses while your traveling around. She should be able to do her Psychology, English and Communication classes online, maybe even some Math, but she'll have her sciences... Chemistry, Biology, Microbiology, Nutrition, etc... and those will have a lab requirement and be done in person. Additionally, most nursing programs are highly competitive these days. It's not enough to get a 4.0, she'll be expected to become a certified nursing assistant either before, or just after, applying for a program.
So assume she'll be older than 25 before she gets into the program. But here is another new reality different than my grandmother's era: employers are increasingly requiring a BS. It could be another year or two tacked on to the 2 year RN program. If you follow this plan of yours, she could be 27 or 28 before she applies to her first job.... and then will she want to have children? Most women I know have known have had their first child between 28-32.
Your plans are great for you, but are they great for your gf?
First of all, at 20 it's VERY important to be working towards a career if you ever want a chance at getting ahead. It's risky to put off the education for 5 years and it's unrealistic that you'd expect for her to complete these courses while your traveling around. She should be able to do her Psychology, English and Communication classes online, maybe even some Math, but she'll have her sciences... Chemistry, Biology, Microbiology, Nutrition, etc... and those will have a lab requirement and be done in person. Additionally, most nursing programs are highly competitive these days. It's not enough to get a 4.0, she'll be expected to become a certified nursing assistant either before, or just after, applying for a program.
So assume she'll be older than 25 before she gets into the program. But here is another new reality different than my grandmother's era: employers are increasingly requiring a BS. It could be another year or two tacked on to the 2 year RN program. If you follow this plan of yours, she could be 27 or 28 before she applies to her first job.... and then will she want to have children? Most women I know have known have had their first child between 28-32.
Great points. Dating her since she's 17, no career path currently and following a guy around just increases the danger of a blowout
Wow is the the relationship forum or the finance forum?
Flying saucer mom - why are you posting here? You are giving advice to garbage in which you clearly know little about.
1. I was a CNA from 17-20 years old
2. I was accepted into a nursing program already and know the requirements. I have completed every singlee pre requisite through BSN with the exception of microbiology, which was not a pre req. I took all the a&p 1 and 2, medical term, nutrition, math, etc. etc.
We aren't talking about that right now so what gives you the right to think you can even give your input when I am obviously 1000x more qualified to give input on the subject beings I have done all that. Thanks, but please butt out. It was just over 5 years ago but I'm sure the requirements haven't changed that tremendously.
Lowerexpectations - is this a math forum or why are you unable to perform simple subtraction? I hope you don't give financial advice on top of it.
My gf is 20 but turns 21 in 2 months. Meaning. She was just under 18.5 when we started dating. Big difference from 17, granted a 17 year old could probably figure that out as well.
I'm unsure what your big deterrent is against marriage and my situation other than the obvious fact you must struggle with your own relationship problems, or lack thereof.
Also, I'm not really holding her back from too much. I don't think anyone in her family has ever graduated from college, and I met about 60 of her family members last week. It's not really pressed with them. I only have an associates degree which I just got last year. I was already making over 100k in my earky 20s prior to my associates. Education is not a "must" for everyone.
Either way, my relationship nor my gf is not the issue here. I make a ton of money to me so her income is no issue for me. Like I said, I literally had been on dates with hundreds of women prior to meeting her. I had a very large selection and the fact I've been happy with her so long obviously says a lot about her. When you are in your early 20s and sleeping with several women a week, sometimes a day, I can promise you that it typically a pretty amazing woman to change that
Last edited by houstan-dan; 09-17-2014 at 05:34 PM..
Nothing's worse than when forever expires and one is left with truly nothing. Even if it's not a break-up...what if it's a job loss, or a disability...then what?
After 25 years of marriage my parents got a divorce...my mom was 43, not enough education for a decent paying job (and too old for a secretary job)...so she had a major lifestyle change just to get by...she always says her biggest regret was not going to school when she had the chance...when I asked why she didn't go to school? She said because my dad had promised her forever...and apparently that meant 25 years. So she left with her car, her clothes, and a box of pictures.
I say this because my wife stays at home...she has a BA and an MA and worked for 10 years...we put a ton into savings...so if forever expires, she has most of the tools needed to land back on her feet.
Anyway...good luck OP.
Well if I die I have my company life insurance policy plus I took out an additional $100k life insurance policy that she will receive the majority of, even though she's "just my gf" I obviously think ahead to make sure she's provided for as I understand the sacrifice she makes.
As for disability, that's just a risk everyone takes.
As for job security, that's no issue. Ive received 3 or 4 offers in the last month all for over 100k per year and I haven't even apploed to anywhere for over a year. Those are just old head hunters. My current job is actually about a 50k/yr cut from my lastproject and I still do very well.
If the economy crashes.. well then eeveryone's screwed.
Sorry about your parents but that's life. Like I said no one in my gfs family has degrees so I doubt I was holding her back. If anything I'll be pushing her to do more.
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