Once you have maxed out your Roth IRA, what are the next steps? This video will cover 3 different options you could do after you max out your Roth IRA….
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First off, if you maxed out your Roth IRA for the year, CONGRATS!!!! Awesome work setting aside $6,000 for your retirement! Very proud! If you continue to max out that Roth IRA for the next 10 years, with an 8% annual return, you’ll have $91,000. After 20 years? $294,000. What about 30 years? $745,000. And 40 years? $1,745,000. Great work!
After you have maxed out your Roth IRA, there are a couple different paths you can follow.
Option #1: Go back to your 401k – First off, always take your free money. If your company offers you a match, TAKE IT. It is literally free money. Once your Roth is maxed, you can go back to your 401k & up the contributions into it. Let’s say you are at a 5% contribution into your 401k while you max out your Roth. Once it is maxed, you go back to your 401k & up it to 8% or whatever fits your strategy! This is a great way to shovel more money into a tax advantaged account with your 401k!
Option #2: Open an HSA – A Health Savings Account is a great option for high deductible plans that offers a triple tax advantage. Money going in is tax free, the growth is tax free & for qualified withdrawals the money coming out can be tax free. An HSA is a great way to put more money into a tax advantaged account, yet be able to withdraw from it for qualified expenses without taxes.
Option #3: Go to your taxable account – Personally this is the strategy that I follow. Once my Roth IRA is maxed out, I shovel all my money into my taxable accounts. Even though a taxable account does not offer any tax benefits like a Roth IRA or a 401k, this account type will allow you to put any amount of money you want in each year (no contribution limits) & you can take that money out without penalties at any age you want. Both my Fidelity & my M1 Finance accounts are taxable accounts!
All in all, these are not the only 3 options when it comes to investing your money after maxing a Roth IRA. And the strategy that I follow may not fit your strategy. It is all personal. However, if you are not sure where to go after maxing your Roth IRA, this is a great starting point to research!
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00:00 Intro
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Why do employers offer use it or lose it hsa accounts? That seems very unfair to their staff.
I maxed my IRA, now I can focus maxing my SEP IRA
Nice info! I am assuming you invest in the same investments for your Ira as you do for your roth?
So I can max out my Roth with BRKB and open an account and continue with BRKB?
I’m waiting on that HSA video Fam
If you were to contribute to an IRA account and passed away before age 59 1/2. Would your beneficiaries be able to access the money you accumulated immediately?
Another great feature of the HSA is with my company, we can invest the money in the stock market also. I have AAPL and EPD in my HSA.
Thanks for the tips
NIce
I have an old 401k and i don’t work for that company any longer.. I’ve left it in fidelity. Can i no linnet contribute to that account? What should i do with it if I’m not working for another employer offering a 401k
Nice vid man #WS
Is the 401k limit of 19,500 with or without counting my employers contributions?
Great video always get those retirement accounts first I use my side hustle to contribute to my accounts plus 4% match from work that I earn and then the rest of my money from work I invest in taxable account I'm just shy of 1 year worth of my salary big step to freedom only 27 years old
Can withdraw interest for those exemptions
One thing to add is that when you are in retirement, there is no point where you HAVE to withdraw money from a Roth IRA, where 401Ks you do have to withdraw a minimum. The Roth grows tax free until you're dead. So if you have both a 401K and a Roth in retirement, you can let the Roth sit on the sideline and continue to grow tax free while living off the 401K and social security. I max out my Roth with an automatic weekly withdrawal from my checking account. Set it and forget it. Unfortunately, my employer does not match 401K contributions. Great benefits otherwise, but no match sucks! I still put a little money into that 401K, but it's pretty insignificant. Trying to focus more on the taxable account as I'd like to retire by 50 and I won't get that Roth or 401K money until I'm 59.5.
I'm quite sure you can take the principal out of the Roth IRA for a Roth 401k at any time any reason to be to qualified withdrawal would be first time homeowner or college expenses but may have to verify that
I “get around” the 6k limit by getting 1k plus in dividends in my IRA which increases the cash I have to invest. I also have two separate taxable accounts.