Deleted
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Post by Deleted on Jan 7, 2015 16:39:35 GMT -5
How much do you put in each? Is it just a matter of maxing and after, or do you choose to put more or less in one type of account and why?
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TheHaitian
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Post by TheHaitian on Jan 7, 2015 16:46:48 GMT -5
For now the focus is maxing retirements accounts and the plan is:
A) my 401k B) DW 403b C) my ROTH D) DW ROTH D) taxable accounts
So will not be moving to taxable accounts till the top 4 buckets are full...
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Ombud
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Post by Ombud on Jan 7, 2015 16:48:19 GMT -5
Roth 6500 (max) Brokerage whatever is left over
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Deleted
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Post by Deleted on Jan 7, 2015 16:48:59 GMT -5
Max retirement accounts (Roth 401k, Roth IRA, HSA) due to their tax advantages and the rest goes in taxable.
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muttleynfelix
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Post by muttleynfelix on Jan 7, 2015 16:50:00 GMT -5
I don't do taxable accounts because we do ROTH IRAs instead and we are nowhere near maxing them out. DH will be 50 in March. So, we only have 9.67 years until we could completely access all of that money penalty free. Plus we could access the contributions without penalty right now. If we were maxing out the ROTHs, then I'd go to taxable, but we are so far from being there, I don't have to make that decision.
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Baby Fawkes
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Post by Baby Fawkes on Jan 7, 2015 16:51:05 GMT -5
I'm not a true YMer when it comes to the retirement stuff. I do the following:
A) My 401(K) to the max B) HSA to the max for a family plan C) Taxable for the rest
I don't bother with the backdoor Roth or non-deductible IRA options for either myself or my wife (spousal IRA would be non-deductible). I know I should, but I just put the rest in the taxable account instead.
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Deleted
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Post by Deleted on Jan 7, 2015 16:51:33 GMT -5
I don't have a taxable account outside of my emergency fund. 401K, IRAs and 529s suck up everything. I'm thinking of starting one as my "pay off the house" fund though.
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giramomma
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Post by giramomma on Jan 7, 2015 16:53:39 GMT -5
DH brought a taxable account to our marriage.
Most of the time, we only contribute to retirement accounts. When we had an extra 5K we didn't have any plan for, we added it to his taxable account.
His account is mostly in utilities, which provide some nice passive income.
Before we had our last kid, my goal was to have 25% of our retirement income come from dividends. I don't think we'll get there. Right now, it's about 10%.
I also was hoping to retire at 55, before I had our last kid. I wanted to have access to money that wasn't tied up. You can't access IRAs until you are 59.5, I think.
And, I just think it makes sense not to rely one one or two sources of income in retirement. Though, I don't know how much that will make sense, since most of our retirement $$ is in the market.
We're looking at passive income, retirement accounts, taxable account, a job, pensions, and maybe even SS to get us through.
If we extra money, I'd consider buying a condo or two to rent out. Unfortunately, we couldn't afford to hang on to our first place when we bought our second. And my DH didn't want to deal with two properties.
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gooddecisions
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Post by gooddecisions on Jan 7, 2015 16:56:01 GMT -5
18K each into 401(k), $3350 in my HSA, $6,650 in his HSA, $5K in each kid's 529 and shoot for $30K in the brokerage account.
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Deleted
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Post by Deleted on Jan 7, 2015 16:56:43 GMT -5
I know I'm in an enviable and not usual situation. I'm just not sure I'm going to be able to transfer as much from taxable accounts to 'retirement' accounts. I max both Roths and HSA at this point. And if I'm ever employed again I might be able to convert more. But I'm just not sure it's a huge deal, for me... I mean I know I'll have to pay income on gains, but if you have a 401k or traditional Roth you do that anyway right?
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giramomma
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Post by giramomma on Jan 7, 2015 16:58:11 GMT -5
For me the key is to remain flexible.
I toss a job in there, because I do plan to work. And, I'd prefer to teach another 5 hours a week rather than draw down our accounts when the market is low.
Or, I'd rather try to make it on dividends and the pension that draw down our accounts when the market is low.
I also don't know what my health insurance is going to look like. Right now, unused sick leave gets turned into health insurance credits in retirement. So I'll pay less for premiums when I initially retire. If I retire at 58, I may spend all my health insurance money before I hit 65, or whatever age medicare will be. If I need money for premiums, but my money is tied up in IRAs, well, that gives me less choices.
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Deleted
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Post by Deleted on Jan 7, 2015 16:58:28 GMT -5
18K each into 401(k), $3350 in my HSA, $6,650 in his HSA, $5K in each kid's 529 and shoot for $30K in the brokerage account. Are you not married?
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Deleted
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Post by Deleted on Jan 7, 2015 17:01:25 GMT -5
Ok, what are you considering under passive income?
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Deleted
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Post by Deleted on Jan 7, 2015 17:06:40 GMT -5
I always maxed out the 401(k) and then put the rest into after-tax. There wasn't much choice when it came to the proceeds from our houses in NJ when we moved to a lower COL area.
I think it's good to hedge your bets; although the tax bill from the capital gains distributions on our after-tax funds will be a killer this year (mostly L-T but still a big hit), I don't trust the gubmint to keep all its promises on Roths. I do plan on doing a Roth conversion this year that generates enough taxable income to fill up the 15% marginal bracket.
My favorite retirement asset is Berkshire-Hathaway stock in the after-tax account. It just sits there and appreciates. No dividends, no capital gain distributions.
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lynnerself
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Post by lynnerself on Jan 7, 2015 17:25:48 GMT -5
Until the last few years, DH and I maxed the Roth IRA and the 401K and only put about $6-7,000 in the taxable account. As we approach retirement however, I have changed to a Roth 401k and DH has decreased his 401k to increase money sent to taxable and to build up cash.
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gooddecisions
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Post by gooddecisions on Jan 7, 2015 17:28:42 GMT -5
18K each into 401(k), $3350 in my HSA, $6,650 in his HSA, $5K in each kid's 529 and shoot for $30K in the brokerage account. Are you not married? I'm on an individual plan and he's on an employee with child(ren) plan. It's possible, we've screwed that up, but the rules aren't super clear when we're both on separate employer-sponsored HDHPs and one has the kids and one doesn't. I guess we'll find out. Last year, I had a traditional plan with the kids and he had an individual HDHP w/ HSA. So this is the first year we've both had HSAs and kids to consider. Still time to fix it if that's not how it works.
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Deleted
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Post by Deleted on Jan 7, 2015 17:38:37 GMT -5
But I'm just not sure it's a huge deal, for me... I mean I know I'll have to pay income on gains, but if you have a 401k or traditional Roth you do that anyway right? No, that's the appeal of a traditional (or a 401k) Roth. You don't pay tax on gains. I'm trying to make mine my "super" emergency fund for my old age. Lol.
This is my order: - Teacher Retirement (no choice because it is mandatory)
- Roth IRA
- 457b (but nowhere near the max and actually the first thing lowered)
- Personal savings (currently $650 covering my savings, the dog's savings, and CClub)
- Grandkids' 529 ($100 monthly spread among 6 grandkids isn't much)
I also have $2000 a year going into the FSA account. We usually run out 2-3 months before the year's end.
I am slowly trying to convert some of my IRA (I have one separate from my 457) to my Roth as I am nearing retirement. I know people keep asking, "Are you really going to be in as high a tax bracket in retirement?" I think the answer is yes. I am going to get pretty much 80% (maybe more) of my income when I retire. I won't have access to tax reductions like retirement, 457, and FSA. Even if taxes don't go up, and I think they will, I am going to be paying a lot of tax on my relatively low salary of $60,000 currently. I'd like to get some of the IRA into the Roth if I can afford it.
I don't do the taxable at all except for the $4000 worth of stocks that I own in Sharebuilder. I have Costco, GE, and Yahoo. I don't sell them because I don't want to fool with the tax consequences. Lol. Seriously, they would be a great gift to my kids one day when they are worth a trillion dollars due to inflation.
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Deleted
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Post by Deleted on Jan 7, 2015 18:00:05 GMT -5
I'm on an individual plan and he's on an employee with child(ren) plan. It's possible, we've screwed that up, but the rules aren't super clear when we're both on separate employer-sponsored HDHPs and one has the kids and one doesn't. I guess we'll find out. Last year, I had a traditional plan with the kids and he had an individual HDHP w/ HSA. So this is the first year we've both had HSAs and kids to consider. Still time to fix it if that's not how it works. From what I read I don't think you can max both the single and family. Please look into that. I'd hate for you to get a penalty? Not sure how that works.
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Deleted
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Post by Deleted on Jan 7, 2015 18:00:53 GMT -5
No longer qualify for 401K or Roth. Still contributing (not that much) to taxable accounts.
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Deleted
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Post by Deleted on Jan 7, 2015 18:15:36 GMT -5
I understand you don't pay taxes on gains in Roth. I do max our Roths. And HSA is the same.
Compatibly though, if I had my money in a traditional or 401 K, I'd pay on the gains, correct? So in effect it wouldn't be any different for me, specifically, than having them in a taxable account than in a 401 K or traditional account... ? Or is my thinking wrong there?
I'm finding it hard to find another retirement type account to start, and am not sure it's really worth it?
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vonna
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Post by vonna on Jan 7, 2015 18:16:43 GMT -5
How much do you put in each? Is it just a matter of maxing and after, or do you choose to put more or less in one type of account and why? When I joined the navy, there was no TSP (401K). So, my only "retirement" account option was a traditional IRA. I actually did contribute the max to a non-deductible IRA from the beginning -- not the best move, but ended up working in my favor when the Roth IRA was introduced in ~'98. I started contributing to max each year to the Roth then, and when the dot-com bubble hit, I converted all my traditional to roth with little tax consequence.
I was really bummed I had no 401K type account to contribute to, and had no intention of staying in for 20 years to earn the pension, so I used the 401K limit each year as my "goal" to invest in taxable accounts.
TSP was opened to the military in 2001, and I did max it until I retired in 2006 -- but, that is definitely the smallest of my accounts!
So, my largest account (by far) is taxable, then Roth, and then a dash of TSP. Turns out this is a good mix for me (and us), because I ended up staying long enough to get the pension, and married a cute sailor with a great laugh along the way -- doubling the pension, and making tax deferred our least favorable type of account.
Just dumb luck, but it worked out great!
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Baby Fawkes
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Post by Baby Fawkes on Jan 7, 2015 18:22:06 GMT -5
I'm on an individual plan and he's on an employee with child(ren) plan. It's possible, we've screwed that up, but the rules aren't super clear when we're both on separate employer-sponsored HDHPs and one has the kids and one doesn't. I guess we'll find out. Last year, I had a traditional plan with the kids and he had an individual HDHP w/ HSA. So this is the first year we've both had HSAs and kids to consider. Still time to fix it if that's not how it works. From what I read I don't think you can max both the single and family. Please look into that. I'd hate for you to get a penalty? Not sure how that works. That is my current understanding as well. I believe the IRS views both spouse HSA contribution limits as a single limit and the family max applies in all cases. (but I'm not a tax accountant so you should double check with someone who knows for sure)
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Deleted
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Post by Deleted on Jan 7, 2015 18:30:11 GMT -5
I understand you don't pay taxes on gains in Roth. I do max our Roths. And HSA is the same. Compatibly though, if I had my money in a traditional or 401 K, I'd pay on the gains, correct? So in effect it wouldn't be any different for me, specifically, than having them in a taxable account than in a 401 K or traditional account... ? Or is my thinking wrong there? I'm finding it hard to find another retirement type account to start, and am not sure it's really worth it? You don't just pay taxes on the gains in 401k. You pay taxes on the contributions when withdrawn too.
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lynnerself
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Post by lynnerself on Jan 7, 2015 18:35:31 GMT -5
I understand you don't pay taxes on gains in Roth. I do max our Roths. And HSA is the same. Compatibly though, if I had my money in a traditional or 401 K, I'd pay on the gains, correct? So in effect it wouldn't be any different for me, specifically, than having them in a taxable account than in a 401 K or traditional account... ? Or is my thinking wrong there? I'm finding it hard to find another retirement type account to start, and am not sure it's really worth it? You don't just pay taxes on the gains in 401k. You pay taxes on the contributions when withdrawn too. And you pay income tax rates on it all, including the gains, not capitol gains tax.
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HoneyBBQ
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Post by HoneyBBQ on Jan 7, 2015 18:52:33 GMT -5
Max retirement accounts (Roth 401k, Roth IRA, HSA) due to their tax advantages and the rest goes in taxable. Yep.
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Bonny
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Post by Bonny on Jan 7, 2015 19:14:45 GMT -5
I think it depends on the purpose of the account. I'm not a fan of the required distributions past a certain age for ourselves because we are planning on our passive income for retirement. That's not common though. I'm confused. In your earlier post you said you were no longer contributing to a taxable account and just letting it grow. Are you also not contributing to a tax deferred account because you don't want to deal with RMDs?
FWIW we're not doing any active "saving". The plan is to live on the oil royalties, dividends and other "income" generated by our investments. Once DH turns 59 1/2 in 3.5 years the plan is to supplement our income from his rollover IRA as a kind of COLA.
The big wild card is as we start cashing in the properties. We want to take some capital to do some home improvements and invest the balance. How and when that happens will be interesting!
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whoisjohngalt
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Post by whoisjohngalt on Jan 7, 2015 23:31:19 GMT -5
I need to stop reading this thread, I am getting depressed realizing how poor I really am
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msventoux
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Post by msventoux on Jan 8, 2015 1:14:19 GMT -5
I'll max out the 401k, then do a Roth, then add an HSA into the mix this year. I don't get a match on the 401k, but I like contributing to employer plans. There's the higher limit, and premature withdrawal of the funds is out of the question due to early withdrawal penalties, taxes, etc.
The Roth comes next because I can withdraw the contributions whenever so it's sort of an absolute last resort emergency fund. Then the HSA comes next, and a small monthly amount into an emergency fund since I have it built up a bit now. I figure I can save money in taxable accounts no matter what, but if I don't contribute to any available retirement accounts I miss that opportunity forever.
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resolution
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Post by resolution on Jan 8, 2015 1:17:33 GMT -5
I need to stop reading this thread, I am getting depressed realizing how poor I really am It's all relative. If you look in the thread on how much money people need to feel wealthy, generally the people that are putting away larger amounts also require larger amounts to feel comfortable.
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resolution
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Post by resolution on Jan 8, 2015 1:20:38 GMT -5
We are in a relatively low tax bracket right now and I anticipate taxes will go up in the future, so I prioritize the Roths. Our investment money is going into:
pension plan (pre tax) 457 plan (pre tax) Roth IRA Roth IRA taxable brokerage acct pre-paying mortgage
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