401K, IRA, ROTH IRA, or All 3?

B16RacerN2NR

Working Hard
VIP
I'm a noob at this and wish I paid attention more when I was younger but better late than never I suppose...

I understands the basic of each but what would you all recommend? Should I dump the allowed annual max into an IRA & ROTH IRA while putting the remains of what I can afford into a 401K?

Learn me please...
 

reckedracing

TTIWWOP
VIP
What's your current tax rate/bracket?
Depending on income levels you might be phased out of some of the IRA or ROTH contributions.

If you are in a high tax bracket my advice would probably be to at least take advantage of the 401k employer match, and max the 401k if possible.
If you have funds left over after maxing the 401k, you can consider which IRA would be best for your needs.

If you are in a lower tax bracket I'd steer you towards getting the full benefit of any employer match on the 401k and then maxing out the ROTH.
 

get_nick

These snozzberries taste like snozzberries...
VIP
I'm a noob at this and wish I paid attention more when I was younger but better late than never I suppose...

I understands the basic of each but what would you all recommend? Should I dump the allowed annual max into an IRA & ROTH IRA while putting the remains of what I can afford into a 401K?

Learn me please...
Reverse your order. (sorta)

This is how money should be spent:
  1. Start with your 401k, max out as much as your employer will match.
  2. Then contribute to a Roth. If you make more than the income limits allow, you're sorta screwed.
    1. IRA doesn't make sense if you have a 401k, you don't really do both.
  3. Max out 401k contribution limit ($19,000)
  4. Save 6-12 months of expenses
  5. Then pay off all outstanding revolving credit.
  6. Taxable investments (real estate, stocks, etc.)
  7. Hookers and blow
 

B16

Super Moderator
VIP
IRA would make sense if you want to stash more than $19k a year; no?

so close to hookers and blow! #lifegoals
 

reckedracing

TTIWWOP
VIP
If you make enough to afford to dump 19k in a 401k you likely are going to be phased out a traditional, and possible a roth.
2019 traditional single/married 74k/123k no deduction for IRA contribution.
ROTH single/married 137k/203k MAGI income limits.
 

B16RacerN2NR

Working Hard
VIP
Thanks Fellas.

So my next question then, my last employer had Principle. My current employer uses Vanguard. Should I stick with Principle or roll over into Vanguard? Also, I have a friend who work for Primerica. He makes it "sound" good but i'm also still skeptical because even though I can see the benefits, it's like the amount of fees will just cancel out anything I make lol. Vanguard seems to be the best low-cost option.
 

get_nick

These snozzberries taste like snozzberries...
VIP
Thanks Fellas.

So my next question then, my last employer had Principle. My current employer uses Vanguard. Should I stick with Principle or roll over into Vanguard? Also, I have a friend who work for Primerica. He makes it "sound" good but i'm also still skeptical because even though I can see the benefits, it's like the amount of fees will just cancel out anything I make lol. Vanguard seems to be the best low-cost option.
Primerica is shit. Just roll it all into Vanguard, unless you like Principle. Primerica used to have a slogan, "Buy term (cancel your whole life policy) and reinvest.

This should tell you all you need to know about Primerica.
upload_2019-7-15_16-57-1.png
 

get_nick

These snozzberries taste like snozzberries...
VIP
fwiw, i have Vanguard and it's where I sent my parents when they retired last year. Best funds with the lowest fees. Easy investing with good customer service. Very transparent business practices.
 

B16RacerN2NR

Working Hard
VIP
Cool... I'm OK with Principal but it seems Vanguard is better. Vanguard is also charging me $0 to roll over to them. Principal is charging me a $50 fee to take my money for a rollover. That beats Primerica's 5% Front Load fee that they wanted... F that noise...
 

get_nick

These snozzberries taste like snozzberries...
VIP
Cool... I'm OK with Principal but it seems Vanguard is better. Vanguard is also charging me $0 to roll over to them. Principal is charging me a $50 fee to take my money for a rollover. That beats Primerica's 5% Front Load fee that they wanted... F that noise...
Every company will be free to transfer TO. Because they make money from your business. Almost everyone charges fees OUT. Both are very common. The fee isn't technically to transfer to Primerica, I'm guessing it's to buy their mutual funds. Which is stupid. Funds make money on management fees, not a purchase fee. It's like if the buyer paid commissions to ebay when they buy something, just doesn't make sense. If you're interested in expanding your portfolio with more options, a brokerage like Charles Schwab or Fidelity can take your 401k and roll it over to an IRA if you want. But consolidating to one retirement account is usually what people prefer, simply for ease of management.
 

Briansol

Admins
Admin
VIP
I kept my old 401k in the old employer for the reason of protection. 401k's are protected against stuff like some lawsuits, where as ira's are not.

I don't want to roll it to an IRA. and my new 401k isn't as good as the old one, fund choice wise.

in order of operations,

4-6 months living expenses in a high yeild savings account, like marcus.com, or a CD ladder that allows monthly income (eg, you have 12 of them, with 1 coming due every month that covers your monrhtly expenses) This is important to have in case of job loss/etc.

then, focus on savings:
max out the HSA if you have it. it's triple tax advantaged. and don't use it for medical costs unless it's a dire emergency or a big cost.
then 401k to the employer max match %.
assuming you aren't trying to reduce your income for tax purposes, and are within income limits, roth ira.
then resume maxing the 401k to the irs limit.
if you still have left over money, open a taxable brokerage account and invest in an etf that has low roll over for tax purposes (you don't want divs, distributions or cap gains in this account, you want growth stocks!)
 
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