Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 30, 2011 20:58:42 GMT -5
I just updated my Quicken Account and as of today we have in retirements account $14,739.74
After my 401K contributions tomorrow (usually goes thru on Friday's) , our ROTH IRA contributions, and if the market cooperates, we will have 15K in retirement accounts by the end of this week.
I am hoping to beat 20K by June 1st 2011 if all goes well. Why?
Because June 1st 2010 we add zero dollars in our 401K's (we both did not have one at the time), zero in Roth... Nada zilch for retirements.
Mine: - 401K : 7,320.72 - Roth : 1,799.00
Wife - 401k : 3,821.02 - Roth : 1,799.00
Fingers crossed, 20K is the goal for June 1rst... also the time we are schedule to live this apartment.
Would be so great to reach 20K and this expensive place at the same time ;D ;D ;D
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 30, 2011 21:30:52 GMT -5
Sending good thoughts your way (and not just because the market cooperating part would benefit the rest of us too)
|
|
schildi
Well-Known Member
3718 and no text
Joined: Jan 14, 2011 1:38:58 GMT -5
Posts: 1,799
|
Post by schildi on Mar 30, 2011 21:42:16 GMT -5
He cawiau, here is another poster wishing you the best. Even if you end up with $19,997 "only" on June 1st, keep on going!
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 30, 2011 21:55:38 GMT -5
Sending good thoughts your way (and not just because the market cooperating part would benefit the rest of us too) He cawiau, here is another poster wishing you the best. Even if you end up with $19,997 "only" on June 1st, keep on going! Thanks guys, I really appreciate it! I definitely intend to keep on going, even more motivated now than ever... just hope to get wife on board. I told her the good news, she did not even flinch. Since she cannot use the money now, she has no interest in it.
|
|
RoadToRiches
Familiar Member
Formerly "indebt"
Joined: Jan 4, 2011 11:08:00 GMT -5
Posts: 965
|
Post by RoadToRiches on Mar 30, 2011 22:17:21 GMT -5
Hey man, I just have a question. What is the reason to have Roth IRA when 401k is not maxed out? Is it because your employer's contributions?
I was under the impression (or maybe I just don't understand it right yet lol) that you want to first totally max out your tax deferred accounts?
Wouldn't you want to have 16.5k in 401k per year before opening up Roth IRA?
Congrats btw...hopefully you will see 15k in there this week!
|
|
txengineer
Initiate Member
Joined: Feb 3, 2011 17:14:01 GMT -5
Posts: 66
|
Post by txengineer on Mar 30, 2011 22:25:38 GMT -5
Sending good thoughts your way (and not just because the market cooperating part would benefit the rest of us too) He cawiau, here is another poster wishing you the best. Even if you end up with $19,997 "only" on June 1st, keep on going! Thanks guys, I really appreciate it! I definitely intend to keep on going, even more motivated now than ever... just hope to get wife on board. I told her the good news, she did not even flinch. Since she cannot use the money now, she has no interest in it. Hey, even if you don't get to your target because market didn't cooperate, think on the bright side that you are buying low with potential for even bigger return in the future.
|
|
txengineer
Initiate Member
Joined: Feb 3, 2011 17:14:01 GMT -5
Posts: 66
|
Post by txengineer on Mar 30, 2011 22:26:33 GMT -5
Hey man, I just have a question. What is the reason to have Roth IRA when 401k is not maxed out? Is it because your employer's contributions? I was under the impression (or maybe I just don't understand it right yet lol) that you want to first totally max out your tax deferred accounts? Wouldn't you want to have 16.5k in 401k per year before opening up Roth IRA? Congrats btw...hopefully you will see 15k in there this week! It really depends. The "rule of thumb" is you contribute 401k up to match, then Roth IRA, then max 401k...
|
|
RoadToRiches
Familiar Member
Formerly "indebt"
Joined: Jan 4, 2011 11:08:00 GMT -5
Posts: 965
|
Post by RoadToRiches on Mar 30, 2011 22:29:23 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA?
Just trying to get hold of these money things lol that's why I am asking. Wouldn't that work better? Put money somewhere to lower your taxable income?
|
|
txengineer
Initiate Member
Joined: Feb 3, 2011 17:14:01 GMT -5
Posts: 66
|
Post by txengineer on Mar 30, 2011 22:42:55 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA? Just trying to get hold of these money things lol that's why I am asking. Wouldn't that work better? Put money somewhere to lower your taxable income? So, assume you can comfortably max 401k and use the tax benefits for Roth IRA like you mentioned, then basically it's the same thing, you are maxing 401k and Roth IRA, just different sequence. If your income does not allow maxing both, then it comes down to personal choices. 401k is great for pre-tax savings but you will be taxed when you withdraw; while Roth IRA is post-tax, it grows tax free and can be withdrawn free of tax when you become eligible. If you feel strongly one way or another (pre-tax vs post-tax), then you should follow that priority. In most cases, since you can't predict future tax laws, the conventional rule-of-thumb suggests that you do 401k up to match and then Roth so that you have some investment in either arrangement.
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 30, 2011 22:44:52 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA? Just trying to get hold of these money things lol that's why I am asking. Wouldn't that work better? Put money somewhere to lower your taxable income? For us it is kinda simple: - Our jobs limit our contributions to 25% of our gross income and we are already doing that.
|
|
RoadToRiches
Familiar Member
Formerly "indebt"
Joined: Jan 4, 2011 11:08:00 GMT -5
Posts: 965
|
Post by RoadToRiches on Mar 30, 2011 22:52:55 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA? Just trying to get hold of these money things lol that's why I am asking. Wouldn't that work better? Put money somewhere to lower your taxable income? So, assume you can comfortably max 401k and use the tax benefits for Roth IRA like you mentioned, then basically it's the same thing, you are maxing 401k and Roth IRA, just different sequence. If your income does not allow maxing both, then it comes down to personal choices. 401k is great for pre-tax savings but you will be taxed when you withdraw; while Roth IRA is post-tax, it grows tax free and can be withdrawn free of tax when you become eligible. If you feel strongly one way or another (pre-tax vs post-tax), then you should follow that priority. In most cases, since you can't predict future tax laws, the conventional rule-of-thumb suggests that you do 401k up to match and then Roth so that you have some investment in either arrangement. Makes sense now. It's kind of like diversifying your taxes lol Thanks!
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 30, 2011 23:11:21 GMT -5
So, assume you can comfortably max 401k and use the tax benefits for Roth IRA like you mentioned, then basically it's the same thing, you are maxing 401k and Roth IRA, just different sequence. If your income does not allow maxing both, then it comes down to personal choices. 401k is great for pre-tax savings but you will be taxed when you withdraw; while Roth IRA is post-tax, it grows tax free and can be withdrawn free of tax when you become eligible. If you feel strongly one way or another (pre-tax vs post-tax), then you should follow that priority. In most cases, since you can't predict future tax laws, the conventional rule-of-thumb suggests that you do 401k up to match and then Roth so that you have some investment in either arrangement. Makes sense now. It's kind of like diversifying your taxes lol Thanks! Basically, gives you more options in retirement. You take enough out of your 401K account to remain at a low rate and compensate the rest with your ROTH IRA.
|
|
azphx1972
Familiar Member
Joined: Mar 2, 2011 22:08:36 GMT -5
Posts: 809
|
Post by azphx1972 on Mar 31, 2011 0:29:55 GMT -5
|
|
zibazinski
Community Leader
Joined: Dec 24, 2010 16:12:50 GMT -5
Posts: 47,866
|
Post by zibazinski on Mar 31, 2011 8:06:20 GMT -5
No kidding. As others have forseen, you have a lot of issues there.
|
|
Urban Chicago
Established Member
Joined: Dec 23, 2010 9:21:48 GMT -5
Posts: 435
|
Post by Urban Chicago on Mar 31, 2011 8:18:37 GMT -5
I think you're doing a great job. I like to think of it this way, on June 1st, you will have kept your discipline, gotten your way with you and your wife, and avoided debt for a full year!
|
|
Wisconsin Beth
Distinguished Associate
No, we don't walk away. But when we're holding on to something precious, we run.
Joined: Dec 20, 2010 11:59:36 GMT -5
Posts: 30,626
|
Post by Wisconsin Beth on Mar 31, 2011 8:34:13 GMT -5
When I saw the title, I thought Carl was going to say they'd had a major fight last night. I'm glad I was wrong!
|
|
runewell
Established Member
Joined: Jan 3, 2011 15:37:33 GMT -5
Posts: 395
|
Post by runewell on Mar 31, 2011 8:37:57 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA? People constantly speak of the 401k as a tax "benefit" which it isn't. It is simply a tax deferral. It is only a benefit if the tax rate you pay later is less than the tax rate you would pay now. It your tax bracket stays the same, you haven't saved a dime. If it's higher, you've lost money.
|
|
runewell
Established Member
Joined: Jan 3, 2011 15:37:33 GMT -5
Posts: 395
|
Post by runewell on Mar 31, 2011 8:38:28 GMT -5
Hmm.. but why not max out 401k (16.5k a year), get the tax benefits and then use that money from the tax to put it in Roth IRA? People constantly speak of the 401k as a tax "benefit" which it isn't. It is simply a tax deferral. It is only a benefit if the tax rate you pay later is less than the tax rate you would pay now. It your tax bracket stays the same, you haven't saved a dime. If it's higher, you've lost money.
|
|
RoadToRiches
Familiar Member
Formerly "indebt"
Joined: Jan 4, 2011 11:08:00 GMT -5
Posts: 965
|
Post by RoadToRiches on Mar 31, 2011 8:39:31 GMT -5
Thanks for explanation! Splitting it up sounds like a good strategy.
|
|
The J
Senior Member
Joined: Dec 18, 2010 11:01:13 GMT -5
Posts: 4,821
|
Post by The J on Mar 31, 2011 8:55:16 GMT -5
Thanks for explanation! Splitting it up sounds like a good strategy. There are other benefits to splitting it up as well, including the fact that a Roth can be used as a back-up emergency fund (you can withdraw contributions without tax or penalty at any time).
|
|
|
Post by 4boyz1gurl on Mar 31, 2011 9:15:22 GMT -5
Don't worry Cawiau your wife will start to get interested once it starts to build up momentum. My husband is the exact same way as your wife, but now he sees the amount in his 401k and actually gets giddy now. My only chagrin is that it has surpassed my Roth IRA/ SEP IRA accounts . Now if I can only persuade him to open a Roth!
|
|
|
Post by pig on Mar 31, 2011 9:20:59 GMT -5
Why do you keep bashing your wife on savings? It looks to me like she's got as much put away as you according to income no?
|
|
Gardening Grandma
Senior Associate
Joined: Dec 20, 2010 13:39:46 GMT -5
Posts: 17,962
|
Post by Gardening Grandma on Mar 31, 2011 9:35:57 GMT -5
That's a pretty impressive accomplishment in only one year. Congrats to both of you.
|
|
telephus44
Well-Known Member
Joined: Dec 23, 2010 10:20:21 GMT -5
Posts: 1,259
|
Post by telephus44 on Mar 31, 2011 9:43:17 GMT -5
When I was 25, I think my goal was to reach $10,000 in retirement savings. So you're twice as far as I was.
Now I'm going to turn 33 next year and I'm hoping to cross the $100,000 mark. Pitiful for this board, I know, but still a goal for me.
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 31, 2011 9:52:03 GMT -5
Why do you keep bashing your wife on savings? It looks to me like she's got as much put away as you according to income no? I filed out the paperwork for her 401k. My wife doesn't even know the username and login to her accounts or even the financial institution that has it. As for the Roth Ira accounts I opened both of them for us and same case. I have given her the user name/passwords many time and just gave up. Now they are written on a piece of paper and locked up in a safe. She doesn't care for future savings/retirement. And I am not bashing her, I wish she could want to plan how we are going to save for retirement with me, or a house, next car. I don't want all the responsibility, I want both of us to seat down and discuss what we are going to do as for as budget, savings, expenses, retirement, etc. Her answer: that is why I have you here for.
|
|
Gardening Grandma
Senior Associate
Joined: Dec 20, 2010 13:39:46 GMT -5
Posts: 17,962
|
Post by Gardening Grandma on Mar 31, 2011 9:58:04 GMT -5
She doesn't care for future savings/retirement. And I am not bashing her, I wish she could want to plan how we are going to save for retirement with me, or a house, next car. I don't want all the responsibility, I want both of us to seat down and discuss what we are going to do as for as budget, savings, expenses, retirement, etc.
Her answer: that is why I have you here for.
My response: "Life is uncertain. I could get hit by a truck tomorrow. You need to know this whether or not you want to".
My DH hates dealing with financial issues. He was a saver (thank goodness), but he simply hates making financial decisions. I make him sit down with me at the end of each month for our "how are we doing" conversation. I hand him the budget spreadsheet and the retirement account spreadsheet. And I have written instructions about bank accounts, userids, passwords, what day/date bills are due and how they are paid (online, auto, or check). The written instructions are in the Will Book, so he knows where to go.
|
|
|
Post by pig on Mar 31, 2011 9:59:01 GMT -5
I see. But she let you do it right? Sounds like she's not adverse to it just uninterested. As long as you don't mind handling it all it shouldn't be a problem. You're doing great don't become too obsessed with the numbers or you'll go nuts as the market goes up and down. You've got the boat going in the right direction just have to stay the course and guide it. You've got a good head on your shoulders. Just make sure that you two are on the same page though. I mean you two are obviously serious with one another so pay attention to her needs/wants as well. Perhaps save up for something that you normally wouldn't do or consider frivolous but that would make her happy once in a while (not that you don't or won't, just saying).
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 31, 2011 9:59:55 GMT -5
When I was 25, I think my goal was to reach $10,000 in retirement savings. So you're twice as far as I was. Now I'm going to turn 33 next year and I'm hoping to cross the $100,000 mark. Pitiful for this board, I know, but still a goal for me. Best of luck reaching that goal and 100K is not pitiful
|
|
Deleted
Joined: May 2, 2024 18:59:53 GMT -5
Posts: 0
|
Post by Deleted on Mar 31, 2011 10:06:39 GMT -5
I see. But she let you do it right? Sounds like she's not adverse to it just uninterested. As long as you don't mind handling it all it shouldn't be a problem. You're doing great don't become too obsessed with the numbers or you'll go nuts as the market goes up and down. You've got the boat going in the right direction just have to stay the course and guide it. You've got a good head on your shoulders. Just make sure that you two are on the same page though. I mean you two are obviously serious with one another so pay attention to her needs/wants as well. Perhaps save up for something that you normally wouldn't do or consider frivolous but that would make her happy once in a while (not that you don't or won't, just saying). She is not against it, just not involve. I am thinking more long tem let's 15 years down the road I die. There she is widowed with kids, no idea about our assets, how they are allocated, savings, etc. Finding them will be easy since I have the list of our accounts, user name and passwords in a safe spot where she can find them. I am afraid that her lack of knowledge will make her an easy prey for any smooth "financial adviser" or gold diggers. That is why I want her as involve in it as I am... So I can sleep better at night knowing if I were to had a kid and I die she will be able to handle the finances.
|
|
azphx1972
Familiar Member
Joined: Mar 2, 2011 22:08:36 GMT -5
Posts: 809
|
Post by azphx1972 on Mar 31, 2011 10:12:42 GMT -5
cawiau, I get the sense that you expect to change her attitude all by yourself, but at the same time it's obvious that approach is not working because she's not tuning into what you're saying. Money is obviously very important to you because you keep posting about it on here, but it doesn't seem to be a priority for her at all from what you're writing. Why not try to get some help from an unbiased third party either in the form of marriage counseling, or by taking the FPU class?
|
|