401k roth

[iloadthetruck]

Like I said earlier, it's a pretty safe bet that tax rates are going to up which means you will be better off taking that tax break in retirement.

Of course, the question begs to be asked - the tax-free withdrawal is law today. What happens if they amend it and cause it to be taxed in the future? You can see those greedy Congresspersons looking at all the overflowing Roth IRAs and 401k's thirty years from now and wanting to take a bite...!

 

[brett636]

Of course, the question begs to be asked - the tax-free withdrawal is law today. What happens if they amend it and cause it to be taxed in the future? You can see those greedy Congresspersons looking at all the overflowing Roth IRAs and 401k's thirty years from now and wanting to take a bite...!

They are already considering somethign much more sinister. There have been hearings held in the Senate on the topic of confiscating all private retirement fund and pension plans and dumping into one big pot to be doled out by the government as the government sees fit. There have also been ideas floated to require all private retirement funds like IRAs and 401ks to invest a certain percentage of their assets into government bonds and this would be sold as a way to keep retirement funds "safe" from extreme market fluctuations. We all know the real motivation and that is to find more buyers for increasingly unpopular federal government debt.

If I am not mistaken right before the republican takeover of Congress in 1994 there was a bill that would hit all retirement accounts with a one time 10 or 15 percent tax. I'm sure if the democrats had remained in control after the 1994 elections they would have gone through with it too. So the answer to your concern is yes, the government is a threat to your retirement accounts no matter what type they are and as their sources of funding for their pet projects and social entitlements become ever more scarce hold onto your seats because your retirement accounts, no matter what they are, will be targeted.

 

[hellfire]

They are already considering somethign much more sinister. There have been hearings held in the Senate on the topic of confiscating all private retirement fund and pension plans and dumping into one big pot to be doled out by the government as the government sees fit. There have also been ideas floated to require all private retirement funds like IRAs and 401ks to invest a certain percentage of their assets into government bonds and this would be sold as a way to keep retirement funds "safe" from extreme market fluctuations. We all know the real motivation and that is to find more buyers for increasingly unpopular federal government debt.

If I am not mistaken right before the republican takeover of Congress in 1994 there was a bill that would hit all retirement accounts with a one time 10 or 15 percent tax. I'm sure if the democrats had remained in control after the 1994 elections they would have gone through with it too. So the answer to your concern is yes, the government is a threat to your retirement accounts no matter what type they are and as their sources of funding for their pet projects and social entitlements become ever more scarce hold onto your seats because your retirement accounts, no matter what they are, will be targeted.

is this Fox news??

 

[UpstateNYUPSer(Ret)]

One more question on the Roth 401K--since this is after tax money can we contribute money directly to our accounts? I am talking about tax refunds or other surplus personal funds.

 

[moreluck]

One more question on the Roth 401K--since this is after tax money can we contribute money directly to our accounts? I am talking about tax refunds or other surplus personal funds.

Send surplus funds to the California chick you owe it to.

 

[Jones]

is this Fox news??

Do you even have to ask?

 

[Jones]

One more question on the Roth 401K--since this is after tax money can we contribute money directly to our accounts? I am talking about tax refunds or other surplus personal funds.

Nope, that would be nice but you cannot make your own contributions to a 401k, they have to come from work. Consider opening a Roth IRA.

 

[satellitedriver]

One more question on the Roth 401K--since this is after tax money can we contribute money directly to our accounts? I am talking about tax refunds or other surplus personal funds.

No, but you can start a personal Roth and contribute into it, if you meet the earnings guide lines.

 

[1989]

Of course, the question begs to be asked - the tax-free withdrawal is law today. What happens if they amend it and cause it to be taxed in the future? You can see those greedy Congresspersons looking at all the overflowing Roth IRAs and 401k's thirty years from now and wanting to take a bite...!

There is always a risk of that. the golden rule applies to everything. (He who has all the gold, makes all the rules)...But rich people can't have a roth so you may stay under the radar.

 

[air_dr]

The only thing I could realistically see happening is the "Roth" type plans being closed to new money. In other words, what was contributed under today's rules would be grandfathered in, so to speak, and the money, of course would remain tax free and under the control of the individual.

I think the real misfortune is how few people who are eligible contribute to an IRA or 401K plan. The statistics I have seen on the personal savings habits of Americans are quite discouraging. All too many people can't seem to manage their money very well, though I also realize that for many people to just make it from paycheck to paycheck is a genuine struggle through no fault of their own.

I am hopeful that the "Roth" type investments are something everyone, liberal or conservative, D or R, could see as a good option to have available. The left has no grounds to view it as a tax shelter for the very wealthy and privieged while the right can particularly appreciate the strong positive incentive it gives to the individual to take personal responsibility for planning and saving for ones future needs.

 

[brett636]

is this Fox news??

No, this is the reality of a government living beyond its means for generations both past, present, and future and the consequences of such behavior. What I post is simply the logical conclusion to the road we are on today. Accept it now or face the consequences later.

 

[satellitedriver]

I am hopeful that the "Roth" type investments are something everyone, liberal or conservative, D or R, could see as a good option to have available. The left has no grounds to view it as a tax shelter for the very wealthy and privieged while the right can particularly appreciate the strong positive incentive it gives to the individual to take personal responsibility for planning and saving for ones future needs.

Well said.

 

[UpstateNYUPSer(Ret)]

I have been thinking of one possible use for my Roth 401k and would like advice on whether you think this is a good idea or not. I recently refinanced my mortgage from a 6.125% 30 yr fixed (VA) to a 4.5% 15 yr fixed (VA) with a current balance of about $79K. I plan to resume contributions to my 401k in January of 2012 as I will finally be debt free. I am thinking of using my Roth 401k as a kind of "forced" savings account with the purpose of paying off my mortgage when I turn 59 1/2. I will continue to make my monthly mortgage payments ($860) between now and then which should bring the balance down to $35-40K by the time I retire in 2019. If I contribute 25%, which is roughly $350, per week, I will have $127,400 in principal in the account in 7 years, which would be more than enough to pay off the mortgage.

Does this sound like a good idea or should I simply make additonal principal payments? I like the Roth option as I will (hopefully) make money on my investments whereas if I simply make additonal principal payments I will be saving on interest payments.

Any thoughts?

 

[Jones]

If the only thing you plan on doing with that Roth money is paying off the remainder of your mortgage then you're better off just paying down the principal on the mortgage now as that will reduce the amount of interest you pay over the life of the mortgage. Paying down interest bearing debt is a guaranteed return on your investment. You could make a case that if the market maintains it's historical rate of return then you would come out ahead by putting all that money in the Roth, but it's not guaranteed. I would put the money in the Roth just because it gives you more options down the road should you decide to do something different with money.

 

[brett636]

Something else to think about upstate is in retirement when you begin drawing Social Security typically the benefits are not taxable, but start to become so once other sources of income start to add up over a certain amount. I believe that amount is $32k and as the income goes up so does the percentage of your social security that becomes taxable. I am not sure how much of your retirement income you plan on coming from 401k savings, but if that money comes from a Roth it is not reported on your income tax return thus not affecting the taxable amount of social security. Assuming the pension figures you posted are accurate you will be paying some taxes on your Social Security benefits, but anything that can reduce that may be worth looking into.

 

[beentheredonethat]

I have been thinking of one possible use for my Roth 401k and would like advice on whether you think this is a good idea or not. I recently refinanced my mortgage from a 6.125% 30 yr fixed (VA) to a 4.5% 15 yr fixed (VA) with a current balance of about $79K. I plan to resume contributions to my 401k in January of 2012 as I will finally be debt free. I am thinking of using my Roth 401k as a kind of "forced" savings account with the purpose of paying off my mortgage when I turn 59 1/2. I will continue to make my monthly mortgage payments ($860) between now and then which should bring the balance down to $35-40K by the time I retire in 2019. If I contribute 25%, which is roughly $350, per week, I will have $127,400 in principal in the account in 7 years, which would be more than enough to pay off the mortgage.

Does this sound like a good idea or should I simply make additonal principal payments? I like the Roth option as I will (hopefully) make money on my investments whereas if I simply make additonal principal payments I will be saving on interest payments.

Any thoughts?

Any plan where you are saving in one form or fashion for your future is good. Then best answer will be based on what the future holds. If the interest rates rise, then keeping a debt at 4.5% is a good thing and you can invest and earn a higher rate of return. If the interest rates drop even more and the stock markets decline, then it would have been paying off the debt giving you a guaranteed 4.5% ROI.

This is where a good financial advisor can help you. (I wish I had one myself). You may want to consider putting most of that extra money for 2 years into your mortgage and take off most if not all that 35K. Then resume normal payments to your mortgage and then put the money to your Roth 401K. You will still have close to 100K in principal for the last years of your working in your Roth 401K, and have no mortgage.

But you should make sure you have enough cash on hand for emergencies such as 6 months of living expenses so that if something goes wrong, you don't have to try to pull money out of untouchable funds.

 

[moreluck]

If Mitt gets elected, he wants to immediately do away with capitol gains tax for anyone making under $250,000.

 

[UpstateNYUPSer(Ret)]

If Mitt gets elected, he wants to immediately do away with capitol gains tax for anyone making under $250,000.

That's nice--what does that have to do with Roth 401k's?

 

[moreluck]

That's nice--what does that have to do with Roth 401k's?

In general you were talking about retiring.....sometimes people have stuff to sell like stocks and such.........timing wise, I was trying to save you some tax if you just wait to see how the election goes.
But nevermind, sell your stock right now and pay humongous cap. gains, I don't give a crap!

 

[UpstateNYUPSer(Ret)]

In general you were talking about retiring.....sometimes people have stuff to sell like stocks and such.........timing wise, I was trying to save you some tax if you just wait to see how the election goes.
But nevermind, sell your stock right now and pay humongous cap. gains, I don't give a crap!

Then you should have posted this in the retirement topics thread.