I received a comment on one of my videos about how retirement plans are “stupid”.
This opinion actually more widely shared than you think… so, I wanted to break down some pros of having a retirement plan that may have you rethinking if using one is right for you or not.
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So I just did the math, and I am older now than the years of life I have left until I am 59 and a half… ugh.
Hi Nikki. I heard you make a comment about only putting enough in a 401k to get a match, then put remainder of what you’re looking invest a Roth. This could be more tax advantageous. I currently make a little over 100k and defer 10% into my 401k. Would it be better to put 4-5% in 401k to get full employer match and take the rest and put into a Roth?
I land on the side of Retirement Plans being stupid. I started investing in my 401(K) at 21. I'm 46 now, but during those 25 years, life happened which required me to make withdrawals. I looked up 2 years ago and realized that I only had $60K sitting in my 401(K). You have to be extremely consistent (both in contributions and having a job) over a long period of time. So I pulled my money out and used it for down payments on 3 rental properties. 2 years later, I have 7 in my portfolio and have passive cash flow of $2500 a month.
The 401(K) was never meant to be the sole source of retirement. It was designed to be a leg in a 3-legged stool. To augment social security and pensions. Social Security is in a deficit and there are no more pensions because companies don't want to foot the bill.
The median 401(K) balance at retirement is $69K. Good luck with that!
I saw my father working until he was 80 and then promptly dropped dead. That was not gonna be me. retired Jan 2020 at 54 and enjoying my life with my hard earned savings which I do not plan on leaving for anyone but myself. My older brother is going my father's route as he hasn't saved a dime and will be working until he drops dead.
Any videos on a pie chart of what monthly budgets should look like?
If you want to succeed tomorrow, you have to start working today. Those who do not plan for the long term will not succeed in the long term.
I can see ROTH being the clear winner in the future (and I can also see myself being wrong).
But, as we become more socialist (not socialist), those that don't save for retirement are going to lean more and more on the responsible ones.
– My hedge against this is ROTH.
It would take a special kind of dumbass to think saving for your retirement is a bad idea
Started in a retirement plan in 84 at the age of 30. Retired with over $1.5 million at age 60, my wife retired at 57 with $750k in her Ira. Today my wife and I live off $120k IRA,
$12k in pensions and $61k in SS. We started converting $50k of the $120k IRA into a Roth IRA. IN 10 Yrs we will have over $600k in the Roth. Anyone not contributing to either a traditional or Roth IRA are destined to work til they die! This is a very good presentation.
Every video is super informative and on point! Thank you!
Any advantage to an Ira opened with already taxed income?
Question about a Roth IRA: So if I put $5,000 in there, invest it, turn that $5,000 into $6,000, I can withdraw only the original $5,000 and I have to leave the $1,000 profit in there? Am I understanding that correctly? Currently I have both a Roth IRA as well as a 401k because I've maxed out my contributions. Just trying to figure out what people mean when they say that you can take the money out of a Roth IRA at any time. Can I take out the full $6,000 or just the initial $5,000 I put in?
My employer matches my 401k contributions 25%, so the way I look at it I'll have a ton of money when I retire, I'll take out a loan on my 401k if I need to buy a house or something important, and even if I need to pay the 10% early withdraw penalty at some point I'll still come out in the positive ~15%. Plus I've already calculated that it'll probably end up saving me $15,000-25,000 come tax season so I actually DO get a benefit right now as well.
Can you recommend any resources for us that suggest how to lower taxes?
I want to wake up one morning and find out that my portfolio is $4,000,000 . I know it’s possible
I do not plan on retiring at all but I would not mind pulling money out of a Roth when I am old because my goal is to create generational wealth, not to drive a Ferrari.
Would you recommend taking a loan out against your 401(k) to buy a real estate investment that cash flows enough to pay it back and still put a bit in your pocket?
Excellent video Sister
what are your thought on HSA?
They’re great. 72T, Roth conversion ladder, tax savings etc.
Retirement is all I got to look forward to once i fake my death and live on a beach
I'm DCA'n till the day I die..as long as I can earn an income.
There's nothing wrong with planning. But if you could pay off your car and house, but instead put the money in a tax-differed account that is inaccessible to age 59 1/2 or later, you put yourself in a corner when you need those funds during a downturn. Having some money for when you're older is fine. Heck, why not just save money for whenever, next month, next year, 3 years from now. Why focus on this date that is at a maximum 10-20 years before you die and squirrel all your money away for that time? What sucks right now is that conservative investments are horrible returns. So you basically have to put your money in the stock market to get anything out of it. You can reassure people the stock market only goes up, but that's not the truth or reality.
People are actually living less these days: "Between 2018 and 2020, the decrease in average life expectancy at birth in the U.S. was roughly 1.9 years — 8.5 times the average decrease in 16 comparable countries, which was about 2.5 months."
Roth is the easiest one and depending on your income it may be the most beneficial one
Hey beautiful. Great video
If you have $1,000,000 and loan that out at 7% interest, you make $70,000 a year in perpetuity.
I see no reason to get excited that ladies living longer than men. Hahaha. You should be sad for us men. Did you mention anything about 401k job separation at 55 having access to last employer 401k contributions or did I miss it. Some types of public service employees can do it at 50.
Thanks for breaking this down. Great video!