Finance/Investing ITT

[z31maniac]

I believe they should, hopefully.

I assume you meant to say IRA at the end there. Yes, I'd get the full match from the company and put as much as you can in the Roth IRA up to $5000 or $5500 or $6000 or whatever it is this year.

If you end up closing on a house, you should have help shrinking your adjusted gross income, along with any student loan debt or whatnot so it's not like you totally need pre-tax contributions.

I would think, but thought I'd go ahead and ask, L3 is a pretty damn big company!

Actually walking out the door right now to go look at another house.

[nando]

I think my company only matches regular 401k contributions, but I'll have to check. If it matches both then I the only reason to do a regular 401k would be for a lower AGI. in any case I'm already putting twice as much into my Roth.

[rwh11385]

Thanks. I'll check into that tomorrow at work.

Let's say my company doesn't have a Roth 401k option, I should still put my 3% to get the match, then put all else in a Roth 401k?

I believe they should, hopefully.

I assume you meant to say IRA at the end there. Yes, I'd get the full match from the company and put as much as you can in the Roth IRA up to $5000 or $5500 or $6000 or whatever it is this year.

If you end up closing on a house, you should have help shrinking your adjusted gross income, along with any student loan debt or whatnot so it's not like you totally need pre-tax contributions.

[z31maniac]

Put it all in Roth 401k. That money should still be matched, although it will be placed in a regular 401(k) account. Confirm with HR or your plan rep.

Roth 401k's are relatively new (have been around since 2007), but I have not seen any benefit of a Roth IRA described over a Roth 401k. (Besides being able to say you maxed out a Roth IRA when bragging to people about your finances, I guess, if you are into that like Turf1600 was)


Like nando said, there are tax benefits to both forms of 401k, but I'd rather pay taxes now on earnings than on tomorrow's returns. This should be the lowest paid period of my life and I would rather maximize future benefits than minimize my current adjusted gross income.

Thanks. I'll check into that tomorrow at work.

Let's say my company doesn't have a Roth 401k option, I should still put my 3% to get the match, then put all else in a Roth 401k?

[z31maniac]

Yeah, I just don't want to pay for their advice! I need to start doing some more research on the topic, I've always read a good rule of thumb is to do after-tax contributions if you think you will retire in a higher tax bracket then you are currently. Given my profession and little experience (not quite 2 years) it should be no problem for me to be making at least another 30-35% in the next 5 years.

Same here on the %, once I get stupid debt paid off, I'd like to eventually be putting 13-15% in my retirement and 5% in savings.

[rwh11385]

So do you suggest only putting up the company match in the 401k (3% of gross salary in my case), then taking the extra I'm putting in the 401k and switch to a Roth IRA or Roth 401k like Heeter suggested?

Currently I put 6% of my pay in along with my 3% company match, so I'm getting 9% of salary in my company 401k (with my allottments I earned a 12% return on my last quarter).

Should I take the extra 3% I'm putting in my company 401k and put it in a Roth account? Should I do any post-tax contributions to my company 401k?

I know I need to be putting in more than 9% of my earnings into retirement accounts, but I'd like to get some other things paid off first before I contribute more to savings and retirement.

Put it all in Roth 401k. That money should still be matched, although it will be placed in a regular 401(k) account. Confirm with HR or your plan rep.

Roth 401k's are relatively new (have been around since 2007), but I have not seen any benefit of a Roth IRA described over a Roth 401k. (Besides being able to say you maxed out a Roth IRA when bragging to people about your finances, I guess, if you are into that like Turf1600 was)


Like nando said, there are tax benefits to both forms of 401k, but I'd rather pay taxes now on earnings than on tomorrow's returns. This should be the lowest paid period of my life and I would rather maximize future benefits than minimize my current adjusted gross income.

[nando]

So do you suggest only putting up the company match in the 401k (3% of gross salary in my case), then taking the extra I'm putting in the 401k and switch to a Roth IRA or Roth 401k like Heeter suggested?

Currently I put 6% of my pay in along with my 3% company match, so I'm getting 9% of salary in my company 401k (with my allottments I earned a 12% return on my last quarter).

Should I take the extra 3% I'm putting in my company 401k and put it in a Roth account? Should I do any post-tax contributions to my company 401k?

I know I need to be putting in more than 9% of my earnings into retirement accounts, but I'd like to get some other things paid off first before I contribute more to savings and retirement.

talk to a financial adviser for that. ;) Personally I'd be putting the extra 3% into the roth, but there are tax benefits to both options.

9% overall isn't bad, I think I'm around 8% with matching. My eventual goal is like 16% which will happen when my student loans and credit cards are paid off :)

[nando]

yes but you pay taxes on gains rather than contributions. that's what makes a Roth IRA or 401k so powerful. in 40 years when I have 1.5 million in my Roth IRA, the government won't be able to touch any of it. with the regular 401k, you'll likely be subject to 30% taxes or more. The reason you do both is because the employer match makes it worth it even though you have to pay taxes on it later when the amount is much larger. If your employer doesn't match 401k contributions then max out your Roth first.

I believe the max contribution is 16,500 for all of the 401k/IRA programs combined. They are all tax sheltered accounts, if you are maxing that out you are doing quite well.

[ZM Blue Devil]

if you are not investing in your 401k you are making a big mistake, once you max that out then you can look at other options. 401k combines growth with tax savings or rather tax deferring, which is great.

Great time to buy some steady companies. Lot of great books out there on the topic, no quick wins.

[John Rocker]

I believe IRA has a max, not sure on 401k.

[Alkasquawlik]

Isn't the max you can put into a 401k annually roughly $15,000?

[z31maniac]

if your employer offers 401k matching, take advantage of it and max it out. After that put money into a Roth IRA, max it out if you can, especially if you are young. The advantage to the Roth IRA is capital gains are not taxed, which is huge.

So do you suggest only putting up the company match in the 401k (3% of gross salary in my case), then taking the extra I'm putting in the 401k and switch to a Roth IRA or Roth 401k like Heeter suggested?

Currently I put 6% of my pay in along with my 3% company match, so I'm getting 9% of salary in my company 401k (with my allottments I earned a 12% return on my last quarter).

Should I take the extra 3% I'm putting in my company 401k and put it in a Roth account? Should I do any post-tax contributions to my company 401k?

I know I need to be putting in more than 9% of my earnings into retirement accounts, but I'd like to get some other things paid off first before I contribute more to savings and retirement.

[Alkasquawlik]

You still owe me $10

[scabzzzz]

See sig

[Alkasquawlik]

Kish, you're only 30 years old? I thought you were older than that.

Finance is something I would like to do as a profession when I'm out of school, so I'm trying to learn as much as I can right now.