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00:00 Intro
00:23 Quick Disclaimers/Info
02:13 Difference between Traditional and Roth 401k
02:20 Traditional (Pre-Tax) 401k
03:11 Roth 401k
03:51 Max contributions
04:07 Which is better for your situation?
05:39 What my company offers/company match info
06:42 My initial thoughts/decision
08:13 Why I decided to do Traditional 401k
08:24 I did more research
08:58 Roth Conversion Ladder
09:31 Pay less taxes now
10:06 Tax savings = More money to invest now
10:42 My contributions are low
11:37 I’m diversified
12:31 Final important things/suggestions
15:03 My 401k Portfolio
17:33 Outro
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Not sure what this would be in the UK, I have a cash ISA account which is tax free.
I work as a security guard. I'll probably put 10k in my 401k this year.
Great video as usual, always good to watch and see you explain your thoughts and processes.
When you do the rollover to convert it to Roth you have to pay the taxes up front.
Guideline is the shit. Some months I'll drop my % if I know I have a big purchase coming up then increase it afterwards. Also changing between roth and trad on the fly on a per check basis is so nice.
I’m 50 and this is the first time investing in retirement plan. To start should I go for traditional or Roth? Tfs
While contributing to traditional 401(k) you will reduce taxes paid that does not translate to mean you have that the taxes you did not pay ends up in your pocket to fund your Roth IRA. The amount of taxes saved or deferred is instead inside the traditional 401(k).
What my wife and I have decided to do is 1. Max out our HSA. 2. Contribute to our 401K's until we max out our match 3. Max out our Roth IRA. 4. Anything left goes into the 401k to cut our taxes for the current year.
traditional 401k is such a great way to reduce your taxable income and invest!
I never understood the difference between the two…now I do! Thanks for the excellent explanation!!
I started a 401K about 30 years ago and so wish now that I had the option to do a Roth. I am now have a nice size IRA that I will have to pay a very large tax bill on when I start my mandatory withdrawals. I know its seems a long way in the future but the 401 K turned has turned into a huge tax burden i have to worry about. Seriously looking at options for doing Roth conversions to take money out of IRA and convert them to a Roth and pay tax before retirement income starts. Good luck to you. Very much enjoy your videos. Trying to get my kids to watch and learn from your tips.
Death +Taxes…Glad u have a work 401K! Congress is looking into closing back door conversion to Roth IRA… Cool ur company has Vanguard on their 401K list.
This was super helpful since I too will start contributing to a 401k!
This is a tough decision but given all the “free” money that’s being handed out lately I would bet that the tax rates will never be lower than they are currently.
Fantastic! I love how you always provide so much food for thought and your whole process!
Hola Leila! Thanks for sharing!
I’m not sure if my employer offers a Roth 403b, but I decided to contribute to a traditional one. I max out my Roth IRA so I feel like there’s balance. I’m also pursuing PSLF for my student loans and my employer will reimburse up to $500 a month in student loan payments, so I’m trying to keep my taxable income low enough that my monthly payment won’t be over $500. I won’t be able to do that forever but the longer I can have my employer pay back my law degree the better
I agree with you. I also do the pre-tax traditional 401K
Great video & explanations 🙂 I also choose to contribute solely pre tax in my 401k for now. It works for me since I also have a roth ira.