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There are very few reasons that would ever make sense (hardcore backdoor Roth's). Other than that you pay income tax on all gains vs. just capital gains rates in a brokerage.
Wouldn't it make more sense just to invest that extra money in a taxable account, since that is basically what it is functioning as?
Again, not everybody is as rich as you. Not only is it not legal to contribute more than $17,000 per year to your 401K (and nobody has an employer that contributes $36,000 per year), but most of us can't afford to put $53,000 per year away anyway.
You've lost all credibility at this point. It is not illegal to contribute more than $17,000 per year to your 401k. There are three rules (that I'm aware of) that allows you to exceed $17,000. They have been discussed in this thread.
The penalty on early withdrawals is 10% not exactly "steep". Also look into 72t distributions and/or Roth conversion ladders. There are definitely ways to access your 401k penalty free well before 59.5 years of age.
Thanks, I was not aware of that. But, how would that help me (or anybody) if Medicare no longer exists?
Wouldn't it make more sense just to invest that extra money in a taxable account, since that is basically what it is functioning as?
In most cases anything above 18k/yr is better off in a taxable account unless your 401k allows immediate transfers to an IRA. If you can do that, then contributing after tax, rolling over your 401k to an IRA and converting to a Roth (backdoor Roth) is actually a great strategy. I know I can't roll over my 401k until I leave my company. This is the case at most companies.
You've lost all credibility at this point. It is not illegal to contribute more than $17,000 per year to your 401k. There are three rules (that I'm aware of) that allows you to exceed $17,000. They have been discussed in this thread.
I now see, but it doesn't matter, since my 401K plan doesn't allow those options, and I can't afford to contribute more than $17,000 anyway. It was advice being given for a completely different social class than the one I am in.
Nice to learn something new, never heard of back door roths (maybe I had but didn't pay attention) or 53k max contributions or after-tax non-roth contributions until today but did some googling and found this good article (hopefully CD allows other links here)
I now see, but it doesn't matter, since my 401K plan doesn't allow those options, and I can't afford to contribute more than $17,000 anyway. It was advice being given for a completely different social class than the one I am in.
I'd say contribute the max now if your plan allows investments in lowcost ETFs that track the SPY or QQQ and don't even worry about it and your future self at 60 should be pretty happy. If they don't offer lowcost ETFs and they don't match and if you're in a low tax bracket anyway, maybe consider investing aftertax money in lowcost Schwab branded ETFs through online trades at Schwab that are commissionfree. This would take more discipline but will be very helpful to your future self.
I now see, but it doesn't matter, since my 401K plan doesn't allow those options, and I can't afford to contribute more than $17,000 anyway. It was advice being given for a completely different social class than the one I am in.
I've been lurking here long enough to know there is a group of people on here that claims it is normal to make $100k/year straight out of college and anything less is a failure. I've run across a few posts that claim everyone on their facebook make like $150k/year. Oh, and I'm guessing these same people wake up every morning to meet a whole row of servants.
Note that I'm not saying it's impossible to make $100k/year fresh out of college. I just doubt these people are so clueless as to think the rest of us lowly mortals made $100k/year fresh out of college as well or that all our friends on FB make at least 150k/year.
I've been lurking here long enough to know there is a group of people on here that claims it is normal to make $100k/year straight out of college and anything less is a failure. I've run across a few posts that claim everyone on their facebook make like $150k/year. Oh, and I'm guessing these same people wake up every morning to meet a whole row of servants.
Note that I'm not saying it's impossible to make $100k/year fresh out of college. I just doubt these people are so clueless as to think the rest of us lowly mortals made $100k/year fresh out of college as well or that all our friends on FB make at least 150k/year.
A lot of it depends on where you are. If you went to a good college and are working in the northeast or west coast, you're likely to make $100k out of college in many fields.
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