Roth IRA

Hey All
No company match on my 401k so thinking I should be diverting 401k money (with low fees but still fees) to a Roth IRA instead.

If I max out Roth within the year, can put some extra in the company 401k but doesnt look like match is coming anytime soon.

Any recommendations on good Roth's to use? Have heard good things about Charles Schwabb and Fidelity.

Not sure if it matters but im young and more willing to take risks on a portfolio, and looking for something easy to manage.

Thanks
๐Ÿง  Advice
๐Ÿ’ต Finance
๐Ÿ’ธ Investing
10
TennisandSales
Politicker
8
Head Of Sales
ok so as a former financial advisor id point out a few things.

There are no "good Roth IRA's"

its all about the investments that you put inside them.

If you open an Roth with Schwabb or Vanguard that doesnt matter.

but what does matter is if you put Vanguard Funds or Amerian Funds or what have you.

you are on the right path with not putting money in the 401k at this point.

Max out the Roth first. Thats a really solid 1st step.
saasbaby
Politicker
1
SDR
Ooo do you have any recommendations for a blog or podcast that shares helpful financial info like that?
TennisandSales
Politicker
4
Head Of Sales
follow Jennifer Welsh on Linked In.

Read Simple Path to Wealth by JL Colins
BostonHound
Opinionated
1
Enterprise BDR
Gotcha gotcha, any recommendations for long-term funds to put in? Know vanguard has a great rep (know theres a bunch of different vanguard funds but)
TennisandSales
Politicker
3
Head Of Sales
VTSAX is a very popular one. and one that I have money in myself.

check out Jennifer Welsh on linked in. she has an email list that has a bunch of solid information on how to understand mutual funds and stocks.
ChunkyButters
Tycoon
2
AE
A lot of advisors have tools to put in risk tolerance, retirement goals, capital growth, etc. and they will give you some funds to look at. This is how I chose my allocation and then altered about 10% for additional growth.
TennisandSales
Politicker
0
Head Of Sales
yep. its not as hard as people think/make it out to be. especially financial advisors. they make it seem WAY more complicated.

if you understand index mutual funds you will be in a GREAT place in my mind.
YoursTruly
Politicker
1
Account Executive (SaaS)
Iโ€™d rather not pay taxes on 20k of my earnings today than not pay what will definitely be a lower tax rate when Iโ€™m retired.
TennisandSales
Politicker
0
Head Of Sales
If you want to defer taxes Then a traditional investment vehicular like 401k or traditional IRA are you best bets at first.
JDialz
Politicker
1
Chief Operating Officer
Why do you think your tax rate will be lower in the future?
TennisandSales
Politicker
0
Head Of Sales
some people believe when they retire they will have less income coming in that would put them at a lower tax bracket.

I dnt know the stats off hand any more but I believe the tax brackets are lower now than ever before?.....which means they can only really go one direction.....
YoursTruly
Politicker
1
Account Executive (SaaS)
we make enough that weโ€™re at the the 35% federal tax bracket threshold after our 401k deductions. I donโ€™t qualify to invest in a Roth regardless.

BUT letโ€™s say my spouse and i combine for $200k, weโ€™d be paying 32% federal income tax on 30k of our income to put it in a roth. Thatโ€™s 10k per year in taxes that wonโ€™t grow over time.

10k per year with a 7% return for 25 years is over $350,000 of growth that i would lose by investing in a roth instead of my 401k.

invest your pre tax money first. Itโ€™s more money working for you for 30-40 years compared to handing it to Uncle Sam.
YoursTruly
Politicker
1
Account Executive (SaaS)
Because we wonโ€™t be earning income . Weโ€™ll be drawing off of our retirement accounts which wonโ€™t be close to the amount we earn today.
TennisandSales
Politicker
1
Head Of Sales
yeah there is nothing wrong with this strategy at all. especially if you have a company match in the 401k. thats just free money you are leaving on the table haha.
TennisandSales
Politicker
1
Head Of Sales
this is also an assumption. Idk how old you are but i would not be shocked if we see more people "working" in retirement. not in the traditional sense but some sort of activity that is bringing in money as well as living off assets.
CuriousFox
WR Officer
7
๐ŸฆŠ
I've got Vanguard they seem ok. ๐Ÿคทโ€โ™€๏ธ
braintank
Politicker
4
Enterprise Account Executive
Why not both?
antiASKHOLE
Tycoon
1
Bravado's Resident Asshole
Yeah, if there is no match, then really you aren't getting your full potential from your company's 401k.
BostonHound
Opinionated
1
Enterprise BDR
Went from 6% match to 0% hate to see it
JDialz
Politicker
0
Chief Operating Officer
If you like the tax treatment of a Roth but not the qualified rules, there are better options out there. Not a plug for my firm because Iโ€™m not going to doxx myself, but you should consult a fiduciary advisor to tailor a solution to your specific need and goal.
10

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