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Where can I find such newsletters or what should I look for?
Or perhaps I should take a step back first. What can I read to get a better grasp on investing in general before I read the newsletters? Is there a good book that would cover the basics?
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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If your are currently under a 20% tax rate, Do the Roth 401k at your age, (tax rates have a LOW probability of decreasing). When you change employers, roll the 401k (Roth or traditional) to a self managed IRA (To save fees, and likely have similar investment choices. )
Always max your contribution (which will effectively be higher in a ROTH 401k). Run annual scenerios at tax time to determine if you can benefit from a deductable traditional IRA. In low tax yrs (unemployment / school / travel...) roll traditional IRA into ROTH.
Invest your aggressive money in the Roths (tax free gains).
Where can I find such newsletters or what should I look for?
Or perhaps I should take a step back first. What can I read to get a better grasp on investing in general before I read the newsletters? Is there a good book that would cover the basics?
i have been using fidelity insight for the better part of 25 years. they cater only to fidelity funds.
I'll check out the boglehead book and the fidelity newsletter. Most of my income was in the 15% bracket last year with some in the 25% bracket. I know I'm fairly young but Im pretty sure I won't change employers the rest of my career if I have any say in the matter. I work for a great company and have no intentions of leaving.
I'm excited to start getting a better handle on this. I'll be happy when I can help determine my future retirement income vs a machine determining it.
You're missing the point. You argued that fees of 1.5% ate up only 1/4-1/3 of the potential gains. That is incorrect because you were not, in fact, considering the opportunity costs. Using the same hypo of 8% gain over 30 years on an investment of $30k, with the 0.07% ER of Vanguard Admiral shares, the final balance becomes $98535.
Your 1.5% ER leaves you a balance of $64000. So that 1.5% cost you $34535 over 30 years. In other words, 54% of the gain you would've gotten on the same investment with the lower ER.
Excellent demonstration. The expense is basically a reduction in returns, and as we all know, compounded returns can become quite large. This shows the net damage a high expense ratio can deal to your portfolio.
My employer offers both at a 6% match. Ive been doing the Roth but want to see if I'm doing the right thing. I am 33 now and am doing things to prepare for future promotions at work so I expect my income to increase over time.
What do I need to look at when choosing between the two? Any other info you need to help me make a decision?
Who is your employer, if you don't mind me asking?
There is nothing better than tax free growth. Another thing to consider is SS only gets taxed once you reach certain, very low, income levels. Even then the % of the tax increases with income. So it's far better to have that money in a Roth that is withdrawn without taxable income to lower your income totals.
There is nothing better than tax free growth. Another thing to consider is SS only gets taxed once you reach certain, very low, income levels. Even then the % of the tax increases with income. So it's far better to have that money in a Roth that is withdrawn without taxable income to lower your income totals.
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