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It is a pretty safe generality. Tax sheltered accounts generally mean you pay less in taxes.
That 1 is a typo. Removed. 80k at 4% draw down.
Today.
Theoretically a couple making 70k and saving 20-25k/yr in tax sheltered accounts for 35-40 years may end up paying more in taxes when they retire than they would have if they had chosen a Roth. I typically work under the idea that if your federal tax rates are 25% or higher tax sheltered accounts are the way to go. If it is lower than 25% Roth's are the better bet.
you may pay less in taxes at the moment but much more in taxes in retirement by taking the deduction up front rather than doing the roth . boy if i could have done roths through my working career had they existed i would be on easy street today tax wise .
not getting ss taxed alone is enormous as a by product of having roths . no rmds and medicare surcharges is another .
Theoretically a couple making 70k and saving 20-25k/yr in tax sheltered accounts for 35-40 years may end up paying more in taxes when they retire than they would have if they had chosen a Roth. I typically work under the idea that if your federal tax rates are 25% or higher tax sheltered accounts are the way to go. If it is lower than 25% Roth's are the better bet.
Roth is also a tax sheltered account. Really up to the individuals income projections to decide where to defer taxes. I am a fan of Roth's for my personal situation.
you may pay less in taxes at the moment but much more in taxes in retirement by taking the deduction up front rather than doing the roth . boy if i could have done roths through my working career had they existed i would be on easy street today tax wise .
not getting ss taxed alone is enormous as a by product of having roths . no rmds and medicare surcharges is another .
Yep. I discovered all of this a couple of months ago. Fortunately, I'm 57 and have 8 years beginning January 1 to push my money to a Roth 401(k) instead of a conventional 401(k). I wish I'd known.
It will be really hard to get there without equities IMO
Brings me back to the original debate, why is that? Why are stocks presented as this guaranteed way to make more money than Long Term CDs, when they aren't? I have Long Term CDs that are going to give me 3.5% - 5% over the next 30 years considering an eventual Fed Funds Rate increase. Balanced Funds will be about 5% - 7%. Yes, the Balanced Funds "should" provide more, but that's not a guarantee, so why is it being presented LIKE a guarantee here?
Quote:
Originally Posted by Lowexpectations
Sales if you are good at it can get you to the 100-200k area on in to the millions . Selling insurance, cars, logistics etc
Sales or a lot more responsibility and managing people.
I'm in Sales right now and I'm considered to be one of the "best tier" guys in the industry and again, I'm topping out at $70k on average with EXTREME hardache in the process. Most guys aren't making enough to pay rent and drop out of it after a short period of time.
So what type of sales positions are we talking about here? I was looking at Medical Device and Medical Capital Equipment as I keep hearing they make a lot of money, but getting into that damn industry is like pulling elephant's teeth.
I just wish people would provide more specifics on hot industries, better markets, etc. for us ambitious folks to get into instead of just telling us how stupid we are for only planning to have $1 million at retirement when for me to even get to that $1 million...it's going to take a LOT of sacrifice.
Honestly, I might not even make it to my 60's with the level of stress I go through right now with my current Sales position. The stress levels are extremely high and I'm talking wanting to jump off a bridge high (that's literally, not figuratively).
Roth is also a tax sheltered account. Really up to the individuals income projections to decide where to defer taxes. I am a fan of Roth's for my personal situation.
The way you worded it made it sound like you were only referring to tax deferred accounts like 401ks.
Still if you plan to retire with an income of less than 85k/yr there is no difference between a Roth and a brokerage account as long term capital gains in brokerage accounts aren't taxed unless your AGI exceeds 74k (for a couple).
Brings me back to the original debate, why is that? Why are stocks presented as this guaranteed way to make more money than Long Term CDs, when they aren't? I have Long Term CDs that are going to give me 3.5% - 5% over the next 30 years considering an eventual Fed Funds Rate increase. Balanced Funds will be about 5% - 7%. Yes, the Balanced Funds "should" provide more, but that's not a guarantee, so why is it being presented LIKE a guarantee here?
Stocks aren't guaranteed but on 70k getting to 5-10mm isn't going to happen with CDs
Quote:
I'm in Sales right now and I'm considered to be one of the "best tier" guys in the industry and again, I'm topping out at $70k on average with EXTREME hardache in the process. Most guys aren't making enough to pay rent and drop out of it after a short period of time.
So what type of sales positions are we talking about here? I was looking at Medical Device and Medical Capital Equipment as I keep hearing they make a lot of money, but getting into that damn industry is like pulling elephant's teeth.
I just wish people would provide more specifics on hot industries, better markets, etc. for us ambitious folks to get into instead of just telling us how stupid we are for only planning to have $1 million at retirement when for me to even get to that $1 million...it's going to take a LOT of sacrifice.
Honestly, I might not even make it to my 60's with the level of stress I go through right now with my current Sales position. The stress levels are extremely high and I'm talking wanting to jump off a bridge high (that's literally, not figuratively).
Are you salary plus commission or commission only? What's limiting your topside income? Looking for the "hot" industry is going about it wrong. Find a sales role in an area you like, that has uncapped compensation and build your business. I don't know of a way to make 100-200k stress free
Yep. I discovered all of this a couple of months ago. Fortunately, I'm 57 and have 8 years beginning January 1 to push my money to a Roth 401(k) instead of a conventional 401(k). I wish I'd known.
I understand your rational to max roth account first. However, 401K is still the second best option here in our case which trims our AGI by $54K per year. If we retire by 60, our income will drop by 180Ks until we reach 70 while my pension will still be too high to claim any government breaks. 180x10=1.8MM. In addition, we intend to move to a low tax state which should save us another 6%. That is 10K-20K/year.
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