U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 10-30-2012, 08:56 PM
 
4,338 posts, read 7,111,718 times
Reputation: 1639

Advertisements

Do you all maximize 401K to $17,000 and Roth IRA to $5,000?

Do most people do that?

I wonder what their income is when they do maximize it?
Rate this post positively Quick reply to this message

 
Old 10-30-2012, 09:12 PM
 
Location: MMU->ABE->ATL->ASH
9,262 posts, read 19,165,836 times
Reputation: 10258
401K No, just up to company match
Roth Yes, (Sort of) Put it in non-deductible IRA, then roll it into Roth.

No
Lots
Rate this post positively Quick reply to this message
 
Old 10-30-2012, 09:19 PM
 
4,338 posts, read 7,111,718 times
Reputation: 1639
Quote:
Originally Posted by flyonpa View Post
401K No, just up to company match
Roth Yes, (Sort of) Put it in non-deductible IRA, then roll it into Roth.

No
Lots

Your reason to not invest to $17,000?

You mean transfer the Traditional IRA to Roth?

So most people don't do that?

Lots? How much is lots?

$17K + $5K is only $22K.
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 02:25 PM
 
Location: Toronto, Ottawa Valley & Dunedin FL
1,409 posts, read 2,555,237 times
Reputation: 1166
Would someone care to explain the difference between an IRA and a 401K to an ignorant Canadian?

Here we have what's called an RRSP (registered retirement saving plan), which is tax sheltered up to certain limits. After age 71, this is rolled over into an RRIF (registered retirement income fund), from which you draw income, which is taxable.

Is this similar to the American system? I've always wondered.
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 02:40 PM
 
144 posts, read 303,935 times
Reputation: 163
Quote:
Originally Posted by Wwanderer View Post
Would someone care to explain the difference between an IRA and a 401K to an ignorant Canadian?
.
Here is a brief explanation of the 2 types:

IRA is a tax-deferred retirement savings account completely in controlled by the individual. The individual is free to invest in anything he wants. The maximum annual contribution is $6K (provided that you have no other retirement vehicles such as 401K, 403B, etc.)

401K is a tax-deferred retirement savings accounts offered through your place of employment and managed by the employee. They offered a limited choices of investments. The maximum annually is between $17k and $22K depending on your age.
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 05:12 PM
 
4,338 posts, read 7,111,718 times
Reputation: 1639
So who are the type who do the $22K maximum? I wonder what their income is.
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 06:00 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
28,759 posts, read 47,901,038 times
Reputation: 34618
I'm with Flyonpa,
Same answers. I ALWAYS max my 'Tax Free future withdrawals"... i.e. ROTH and it is my Guess... that will be REALLY HANDY someday in the future. (I may be wrong...)

I have only MAXED my 401k on rare occasions.
I run MANY IRS scenerios every yr. I do what makes sense for ME. High earning yr or not.

(I have WAY too much imbalance in 'qualified' accounts, having always saved for retirement for nearly 40 yrs of employment).

YMMV (which I would expect!)

My kids opened their self managed ROTHs when they were age 12. They are doing extremely well for not being over age 30, and either could pull ALL their contributions TAX / Penalty FREE and keep earnings working for them. (They did very speculative investing as kids and college students, thus they have a sizable asset based on earnings alone). ROTH = a GREAT savings account for young folks. SO much flexibility! Making max contributions for nearly 20 yrs, they have enough for a down payment on a house. Though they each built their own house in Jr High School, so don't need real estate equity. I suspect they will use ROTH contributions for Grad school, or a few yrs off work to travel.

Last edited by StealthRabbit; 11-02-2012 at 06:09 PM..
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 07:27 PM
 
4,338 posts, read 7,111,718 times
Reputation: 1639
Roth IRA only allows $5K though. They should allow more.

401K saves you on pre-tax.

YMMV?

Why would you even want to touch Roth principal until retirement anyway?


Quote:
Originally Posted by StealthRabbit View Post
I'm with Flyonpa,
Same answers. I ALWAYS max my 'Tax Free future withdrawals"... i.e. ROTH and it is my Guess... that will be REALLY HANDY someday in the future. (I may be wrong...)

I have only MAXED my 401k on rare occasions.
I run MANY IRS scenerios every yr. I do what makes sense for ME. High earning yr or not.

(I have WAY too much imbalance in 'qualified' accounts, having always saved for retirement for nearly 40 yrs of employment).

YMMV (which I would expect!)

My kids opened their self managed ROTHs when they were age 12. They are doing extremely well for not being over age 30, and either could pull ALL their contributions TAX / Penalty FREE and keep earnings working for them. (They did very speculative investing as kids and college students, thus they have a sizable asset based on earnings alone). ROTH = a GREAT savings account for young folks. SO much flexibility! Making max contributions for nearly 20 yrs, they have enough for a down payment on a house. Though they each built their own house in Jr High School, so don't need real estate equity. I suspect they will use ROTH contributions for Grad school, or a few yrs off work to travel.
Rate this post positively Quick reply to this message
 
Old 11-02-2012, 10:53 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
28,759 posts, read 47,901,038 times
Reputation: 34618
Quote:
Originally Posted by Info Guy View Post
Roth IRA only allows $5K though. They should allow more. $6k for us 'ole-timers' Only to $183k income (joint)... which is POVERTY according to Obama,,, thinking $250k is 'normal'

401K saves you on pre-tax. You can also do a ROTH 401K, BUT 401K WILL trigger REQUIRED Distributions @ age 70.5

YMMV? Your Mileage may Vary

Why would you even want to touch Roth principal until retirement anyway?
There are many unexpected events in life that REQUIRE you to scrape the bottom of the piggy bank (though you certainly don't want to touch 'qualified' $$ if avoidable). The ROTH is nice, in allowing you to take out initial contributions without penalty. (after 24 months)

ROTH is a PERFECT way to shelter assets from FAFSA (Student Loan Qualification). If you apply as a student with bucks in accessible accts... 100% is expected contribution. If in a ROTH... 0% is expected contribution (tho 100% of ROTH is accessible for EDU (up to limits)).

Then there is the 401k 'Catchup' (additional $5500 above the 'kid's' (buckaroo's) $17k cap)

I have found it nice when taking an early severence / Golden Parachute payout. but BEWARE Beware Playing 401(k) Catch-Up Close to Retirement - US News and World Report

I am hoping to do Multiple 'Golden Parachutes'. I have coworkers that got as many as 4... (get paid to leave, then paid extra to come back, then paid to leave again... Good Gig !) Unfortunately, the Company has wised up and they now reduce subsequent payouts But still you get the miminum (Or more) usually 6 mo to 1 yr salary. Currently I'm trying the 'reverse' sabatical, Off seven, then work one, then off seven
Rate this post positively Quick reply to this message
 
Old 11-03-2012, 12:49 PM
 
Location: Florida
5,662 posts, read 5,372,992 times
Reputation: 6183
Quote:
Originally Posted by Info Guy View Post
Do you all maximize 401K to $17,000 and Roth IRA to $5,000?

Do most people do that?

I wonder what their income is when they do maximize it?
If you can afford to then you should.
If you can not afford to then use the 401k up to the company match, then the ROTH and then back to the 401k for anything that is left.

Remember you will probably (might have to have the ROTH open for 5 years)be able to take your ROTH contribution (no earnings) out without penalties if you run into problems down the road.
Rate this post positively Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top