i did a post and pretax split into my account; in theory i can draw on some of it before the official retirement age without penalities..........in theory
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The question is why though? Other than the tax liability at the age of retirement, what does maxing out the Roth do that the 401k doesn't? Also, are you talking about a Roth IRA or Roth 401k?
As you know, You can pull ROTH money at retirement tax free; whereas, you will pay income taxes on your distributions from a 401K. That is a huge benefit to a ROTH (IRA). That said, you can only invest $5500/yr in a Roth IRA so maximize this option. Any retirement money left over after your $5500 investment in a ROTH, put in your taxable 401k.
Its $6,000 for 2019 and $7,000 if you are 50 or older.That said, you can only invest $5500/yr in a Roth IRA.
No match. Max out a Roth.Can anyone shed some light on what exactly they think I should do. I was asking about how much my company matches to try and max that out like you guys have been saying ,but this is the response I received.
I apologize for taking so long to get back to you, but I am out of town for a conference and just now had a chance to respond. This is a standard 401(k) plan, which means there are only employee salary deferral’s and no match. I hope this helps. Please let me know if there’s anything else you need.
WHAT
0. Establish an emergency fund to your satisfaction
1. Contribute to your 401k up to any company match
2. Pay off any debts with interest rates ~5% or more above the current 10-year Treasury note yield.
3. Max Health Savings Account (HSA) if eligible.
4. Max Traditional IRA or Roth (or backdoor Roth) based on income level
5. Max 401k (if
- 401k fees are lower than available in an IRA, or
- you need the 401k deduction to be eligible for (and desire) a tIRA deduction, or
- your earn too much for an IRA deduction and prefer traditional to Roth, then
swap #4 and #5)
6. Fund a mega backdoor Roth if applicable.
7. Pay off any debts with interest rates ~3% or more above the current 10-year Treasury note yield.
8. Invest in a taxable account and/or fund a 529 with any extra.