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Nice satire, but to truly be on point he needs to do the kind of willfully-ignorant accounting that claims someone maxing out their 401(k) and putting another $
by RyanCavanaugh 9y ago
Nice satire, but to truly be on point he needs to do the kind of willfully-ignorant accounting that claims someone maxing out their 401(k) and putting another $40k/year into a retirement account is "after expenses, left with no extra money at all".
- gamechangr 9y agoI have read a few that say "after regular expenses" and then go own to include: "$60k towards Roth/401k" and "three vacations a year" After that..I'm only left with $17,000 for entertainment.
- CocaKoala 9y agoWait, how do you even PUT 60k in a Roth/401k in one year? You're capped at 18k for the 401k, and you're capped at 5.5k for a Roth IRA, assuming you're under the income cap to contribute to the Roth in the first place. If you're doing a Roth for your partner as well, that's another 5.5k. So if you and your partner both max out your 401ks, that's 36k per year, plus another 11k for the two Roths to make 47k going to retirement savings. Is there another vehicle for retirement savings that I could be dropping money into, aside from my Roth IRA, my wife's Roth IRA, and my 401k?
- ng12 9y agoYou can put an additional $35k in post-tax contributions to your 401k after $18k in pre-tax.
- CocaKoala 9y agoAh, interesting; I didn't know that. It looks like the post-tax contributions get rolled over into a Roth IRA when you start disbursement (I think? I am not in the business of financial management and my grasp of the subject pretty much extends to "I should max out my 401k and my Roth IRA every year and if I keep on doing that then probably I'll be able to retire", so there are almost definitely some nuances here that I'm missing). I'll have to talk to somebody to figure out if this is a good option for me or not.
- kingnothing 9y agoYou can do a backdoor Roth IRA contribution. It has no limits.
- ng12 9y agoThat's still only $5.5k/year though, right?
- nerfhammer 9y agoYou have to have contributed as much to a traditional IRA, which still has contribution limits.
- monster_group 9y agoThat is incorrect. Conversion from traditional to Roth IRA has no limit. Contribution limit is $5500 per year regardless backdoor or not.
- wsxiaoys 9y agoIt's a well-known trick across googlers.... 1. IRA Backdoor: Contributed to traditional ira with after tax money, capped at 5500, then converted to RothIRA 2. After-Tax 401k Mega Backdoor: Contributed to After-Tax 401k, capped at 26K, then converted to RothIRA.
- gipp 9y agoIsn't there also a $130k salary cap on a Roth IRA?
- CocaKoala 9y agoIf you're single, then you have to make less than 132k a year to contribute to a Roth IRA (and it begins to phase out at 117k); if you're married filing jointly, then your combined income has to be less than 198k a year (and it begins to phase out at 184k). If you're over those limits, then the website I'm looking at says that you should look into a "backdoor Roth", which as far as I can tell means you contribute money to a traditional IRA and then roll it over into a Roth IRA. I am not a financial professional and if this is something that you are concerned about, you should probably consult one of those.
- deleted 9y ago[deleted]
- JKCalhoun 9y agoNever mind that when he decides to sell and move out of "the valley" he's going to have multimillion dollar home to cash in. (Just don't retire to London or Tokyo and you'll be okay.)