In this video, I will show you the right order to invest into tax-advantaged retirement accounts including 401K, Roth IRA and HSA and how you can contribute to them using the Backdoor Roth and Mega Backdoor Roth conversion trick even if you’re over the income limit. By following what I’m about to teach you, you can save up to $66K a year and retire early as a millionaire.
0:00 Start Here
2:09 Step 1: Pre-tax 401K w/ Employer Match
3:08 Step 2: HSA (Heath Savings Account)
5:39 Step 3: Rest of Pre-tax 401K
7:43 Step 4: Backdoor Roth IRA
10:42 Step 5: Mega Backdoor Roth 401K
15:09 Final Thoughts
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***DISCLAIMER***
This content for my video is for education and entertainment purposes only. You should use your own discretion to follow any advice as described in this video. This description may contain affiliate or referral links that allow you to find the things mentioned in this video and support the channel at no cost to you.
#401K #IRA #HSA #BackdoorRoth #MegaBackdoorRothConversion #RothIRA #Roth401K #RetirementContribution #RetirementSavings #TaxAdvantagedAccounts #FIRE #RetireEarly…(read more)
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This is a MUST watch video for everyone looking for financial independence. I'm glad we got that backdoor conversion just like you promised!
I love your no BS approach towards getting the point across. Respect!
What is the advantage of contributing to 401k first and then roth-401k? Would that affect employer match?
Great video and very informative. I have a question though – Does Roth IRA 6K and HSA 7.1K contribution does not count towards total IRA contribution?
Hi there Ying, if an employer offers HSA with HDHP insurance or FSA with PPO insurance, would you still go with HSA? I’m just not sure good an HSA is if it means that prescriptions then cost $400
What a great video! I did have a question though. What income level would allow for you to max out all of these options. I just got graduated and got my first job as a SWE. I do make over 6 figs plus stock options etc. but I don't think I will be able to max out all these options. Thanks for the video and the help!
I agree with everything you said; however, at what age should one debate the HSA account? It's a fantastic option for those who are younger and don't have kids. This option did not exist when I was younger. When I first became aware of it (my husband's firm did and does not offer HSA options), my kids were 10 – 12 yo and I was worried about sports injuries, etc.. Now that my kids are teenagers (still various medical worries – they're healthy, but as a parent, you don't want a bare-bones plan when you have kids…), my husband and I are older. We are in normal health for our age – – not top notch health but no major medical problems. That written, we're of the age where each year we get health scares: everything turns out to be fine, but it requires more tests, more doctors visits and more bills. My question is stemming from my feeling that once a couple approaches child-bearing ages, HSAs are no longer an option (get the full insurance the year you plan to have a baby – – don't leave that up to the deductible). Once one goes full insurance, it's hard to go back. Again HSA's are great, but they're a young person's tool. Thoughts? Agree or disagree? Hate to gamble on health….
At 4:03 she describes a “trick” I do not understand. If someone could please take a moment and explain it to me I’d be very grateful.
i'm in love with how clearly defined this all has been. 2022 will be my first year to do this! thank you very much! liked and subbed 🙂
I think one thing mentioned in the video is not correct? Roth 401K is counted as overall 401K limit – $19,5K. The step 5 is the after tax contribution, the last $34000.
When it comes to front loading is there any concern for not "dollar cost averaging" the investment contributions?
"Time in the market beats timing the market" from the great JL.Collins comes to mind towards your point.
Just found your videos, can't wait to share them
Great video Ying! This is very helpful. I like your chart analysis which easily explained these benefits and saving potentials. Thanks a bunch!
Hi Ying, thanks for this awesome video! One question, can I skip step 4 (backdoor Roth IRA) and directly go to step 5 (mega backdoor)? Isn't mega-backdoor a superset of backdoor? What am I missing
Hi Ying! Have a very important question that was not covered. Should I go with the Roth IRA or the 401k for the mega backdoor option? What's your recommendation?
Roth IRA contributions can be withdrawn at any time without penalty; the 5 year waiting period does not apply.
Can you make a video about college savings plans (529 plans). Are they better than just putting the money into a mutual fund through a money market account? Or are there better ways to save for kids'
Great video! Thanks for sharing!
Wow! Excellent video 😀
All this information is excellent. If you are single and make under 139K gross annually, you can just contribute to a normal Roth IRA, the back door isn’t needed.
It's so important to take advantage of these taxed advantage accounts! Phenomenal video, keep up the great work!
Can you show us which funds you will recommend , not all funds will lead you to millionaire, some actually make you lose money.
Great advice! I will have the opportunity to take advantage of all of these steps when I graduate next year and start working in 2021. Fortunately, I already have savings in a Roth and HSA, so I'm that much closer to millionaire status in 10yrs!
good info here & nice channel !
Thanks super helpful! Wondering if the recommendation differs if we are no longer residents by the time we draw the money?
Also, I love your focus on front loading! That's something that I HARDLY EVER hear people talk about but it's so true! I love watching these videos because I feel like your data science background, or maybe it's just your drive, provides a spin that people need to hear!
This video is super clear and helpful!! Hope you can share more on this topic.