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Sure they are. For example your Roth IRA contributions can be taken out at any time. You’ve already paid taxes on them. The interest though has to wait until I

Sure they are. For example your Roth IRA contributions can be taken out at any time. You’ve already paid taxes on them. The interest though has to wait until I believe 55 years old. You should do your own research (you as in anyone reading this) to see what investment options are right for your personal goals. > No, it is not possible to find a house for a family of four where I live for less than $200k Well we weren’t talking about you specifically, but Americans in general. If you need $10mm retire in the Bay Area or something g ya know that’s just what you’ll personally have to work on. I don’t have an answer for you. You can buy affordable houses and live comfortably in almost anywhere in America. In fact there are people who retire and move to other countries, or live very frugally on much less, like $400,000.

sanderjd 5y ago
You're right about the principal in Roth accounts, but most people (especially high earners at time of contribution) put their savings in traditional retirement accounts, for good reason. The age to withdraw without penalty (for both types of accounts) is 59.5. 200k is unrealistic in most population centers in the country, not just the Bay Area (I don't live there).
- ericmay 5y ago
  Why are you shifting goalposts? You don’t need to live near a population center. Even so, it depends on what you mean by population centers. If you’ve got a million dollars you don’t need to work, so you don’t have to incur the higher expenses. You can live 30 minutes or so outside of MCOL cities like Columbus and get houses for $200,000 or $300,000. That might be unrealistic for you but that doesn’t generalize to the vast majority of people in America. > but most people (especially high earners at time of contribution) put their savings in traditional retirement accounts, for good reason. Not so clear cut. So first if you’re a high enough earner you’re adjusted family income is >$200,000 or so before the Roth IRA starts being phased out for you. So we’re already talking about the top 10% or so of all income earners in the U.S. Second, you tend to put the money in a traditional IRA, but you might withdraw (probably actually) less than you were making with your income. So if you’ve been phased out and can only contribute to a Traditional IRA, depending on when you want to retire you might withdraw $100,000/year (or less) and potentially pay a lower tax rate on that income then your marginal contribution rate on a Roth. Lastly, you can still contribute $19,000 to a Roth 401k which doesn’t have contribution challenges related to income (at least for the income the vast majority of people would ever make - idk what happens if you make $1mm or something).
  - sanderjd 5y ago
    I don't think I am shifting goal posts? Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts. You haven't convinced me that this isn't true... Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong. On the retirement account front, what I'm saying is that most professionals in their 40s will have a large amount in traditional 401k/IRA accounts, and much less in Roth or non-tax advantaged accounts. I believe this is accurate. I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets.
    - ericmay 5y ago
      > Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts. This must be a misunderstanding. I never made this claim so now this wasn't the original goal posts. Apologies if I somehow gave off that interpretation. I actually was pretty explicit I think when saying you could save $10,000 (this is cash) via a 401k or other investment vehicle and the math works out to be around $900,000 saved. > Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong. Again, not a claim I've made. I've simply stated that you can buy a house for less than $200,000 and live just fine (this was based on accumulating a million dollars and that there was an assertion that you couldn't live off of that). It's trivially easy to see for yourself on Zillow or via another product that you can buy an affordable enough house and live just fine in most of the U.S.. > I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets. Yea that about sums it up. So I'm not sure where you're really going with any of this. I guess it's cool as a general assertion (and I think it would be interesting to discuss) but I'm bewildered as to why it would used as a rebuttal to something I've said. That's why I asked why you were shifting goalposts.

sanderjd 5y ago

You're right about the principal in Roth accounts, but most people (especially high earners at time of contribution) put their savings in traditional retirement accounts, for good reason. The age to withdraw without penalty (for both types of accounts) is 59.5. 200k is unrealistic in most population centers in the country, not just the Bay Area (I don't live there).

ericmay 5y ago
Why are you shifting goalposts? You don’t need to live near a population center. Even so, it depends on what you mean by population centers. If you’ve got a million dollars you don’t need to work, so you don’t have to incur the higher expenses. You can live 30 minutes or so outside of MCOL cities like Columbus and get houses for $200,000 or $300,000. That might be unrealistic for you but that doesn’t generalize to the vast majority of people in America. > but most people (especially high earners at time of contribution) put their savings in traditional retirement accounts, for good reason. Not so clear cut. So first if you’re a high enough earner you’re adjusted family income is >$200,000 or so before the Roth IRA starts being phased out for you. So we’re already talking about the top 10% or so of all income earners in the U.S. Second, you tend to put the money in a traditional IRA, but you might withdraw (probably actually) less than you were making with your income. So if you’ve been phased out and can only contribute to a Traditional IRA, depending on when you want to retire you might withdraw $100,000/year (or less) and potentially pay a lower tax rate on that income then your marginal contribution rate on a Roth. Lastly, you can still contribute $19,000 to a Roth 401k which doesn’t have contribution challenges related to income (at least for the income the vast majority of people would ever make - idk what happens if you make $1mm or something).
- sanderjd 5y ago
  I don't think I am shifting goal posts? Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts. You haven't convinced me that this isn't true... Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong. On the retirement account front, what I'm saying is that most professionals in their 40s will have a large amount in traditional 401k/IRA accounts, and much less in Roth or non-tax advantaged accounts. I believe this is accurate. I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets.
  - ericmay 5y ago
    > Most people don't have enough of their savings in liquid assets to retire early was, I think, the original goal posts. This must be a misunderstanding. I never made this claim so now this wasn't the original goal posts. Apologies if I somehow gave off that interpretation. I actually was pretty explicit I think when saying you could save $10,000 (this is cash) via a 401k or other investment vehicle and the math works out to be around $900,000 saved. > Your point about housing (and mine) would benefit from actual data. My contention is that for greater than 50% of people in the US, that they cannot, without moving (say the concrete metric here is a move that doesn't require children to switch schools), purchase a home for $200k or less. This is my intuition based on experience with housing markets and a general sense for how the population is distributed in the country, but it may well be wrong. Again, not a claim I've made. I've simply stated that you can buy a house for less than $200,000 and live just fine (this was based on accumulating a million dollars and that there was an assertion that you couldn't live off of that). It's trivially easy to see for yourself on Zillow or via another product that you can buy an affordable enough house and live just fine in most of the U.S.. > I think the confusion in our conversation is that you seem to be talking about what people can do, if they're focused from an early age on accumulating liquid savings, whereas I'm making a descriptive point that most people, even with large net worth, do not have most of it in liquid assets. Yea that about sums it up. So I'm not sure where you're really going with any of this. I guess it's cool as a general assertion (and I think it would be interesting to discuss) but I'm bewildered as to why it would used as a rebuttal to something I've said. That's why I asked why you were shifting goalposts.