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Question: my husband has a 401k and he contributes 100% of it to TIRA. Based on current market conditions (and tax rates), would it be better to be putting his contributions (or some) into the ROTH option in his 401k? Can you explain why or why not?
He has nothing in his 401k Roth but we both have small Roth accounts outside of the 401k. We are 56 and 54 and are hoping to retire when hubby is 60. We also will have a pension (and SS eventually.) Thanks!
As long as the current tax law holds, filing a joint return, you're still in the 12% bracket at $100K of income. Unless you think you're going to have 6-figure income as a retiree, a Roth is no longer tax efficient. If you're saving at a rate above a maxed out 401(k), you can always convert after-tax savings into a Roth doing the IRA to Roth back door conversion but it's not a lot of money unless you do it every year and keep adding to that Roth IRA.
That's my point. You made that move back when the ship was getting ready to sail. So did I. At this time, it has sailed. Markets are down almost 20% from their highs.
I make no hard predictions of it snapping back quickly or sharply although I think 2019 will be positive. It could fall further still but I'm moving back in now, "locking in" much of those avoided losses. The economy is fundamentally strong and I can't remember a recession starting with low energy prices, low inflation, and low inflation. My concern is more 2021 if Dems were to sweep, jack up corporate tax rates, and implement UHC.
That's my point. You made that move back when the ship was getting ready to sail. So did I. At this time, it has sailed. Markets are down almost 20% from their highs.
I make no hard predictions of it snapping back quickly or ...
Yeah, I've went to about 35%+ cash towards the end of 2017 & I'm starting to put back more in equity index funds now, I was way conservative in 2018 but I think it will be choppy going forward. I don't like attempting to time the market like I did but the ascent of the last 10 years was ridiculous & it seemed obvious to me that the highs needed to come back to earth a bit with QE starting to go away & all the other nonsense happening now. Gradually rebalancing to 60/40 over the next several months & I will just leave it that way.
remember in the poll last year i called for a losing year for 2018 . i think i was one of 5 of us ..
my gut feeling is 2019 will see some pretty nice gains , they will be fast too .. a hand full of big days and then flat for most of the time
money needs a home and there is loads of cash waiting to go in . so put me on record as saying i think 2019 will be above average . i thought this year would be a stinker because of valuations and the lack of any substantial correction . volatility had gotten so low and leverage so high that i felt you were going to see some spectacular machine selling as leverage unwound breeding more selling as more leverage unwound to avoid margin calls .
Money has been sitting on the sidelines for lot of time between 08 and now
You aren't the only one to think that `19 has some possible upside
It IS possible to have market gains and be in a recession
We just haven't done it in long time
To me this is really rise of machines over buy/hold philosophy
Machines thrive on volatility
As long as the current tax law holds, filing a joint return, you're still in the 12% bracket at $100K of income. Unless you think you're going to have 6-figure income as a retiree, a Roth is no longer tax efficient. If you're saving at a rate above a maxed out 401(k), you can always convert after-tax savings into a Roth doing the IRA to Roth back door conversion but it's not a lot of money unless you do it every year and keep adding to that Roth IRA.
Roth adds flexibility if you can afford to have one
You can make your 401K more bond oriented and put your riskier equities in your Roth like small cap index or crypto or individual stocks...
Jan. 3, 2019. Another stock pummeling, down 2.5%. Dividend stocks kept me barely above water. Until tomorrow. Winners were health care REITs and utilities.
Love the position pages at TD and Fidelity. You can sort by anything.
Treasury yields took a dive yesterday with the 2,3 and 5 year yields falling below the 3-month yields. This is a sign of inherent market weakness or plain panic.
it is simply the bond market being driven lower by demand in a flight to safety . it really is not about weakness as much as it seems to be the best choice along with gold right now just based on fear .
it is simply the bond market being driven lower by demand in a flight to safety . it really is not about weakness as much as it seems to be the best choice along with gold right now just based on fear .
The spread widens between corp notes and treasuries when market conditions are riskier. I'm not saying the market is weak, only that a weak market is a driver for investors to flock to government bonds. I do think market valuations are elevated after a decade of quantitative easing. Tread with care.
The fear you're talking about ... can lead to panic.
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