I need advice on 401K

[Orion inc.]

Actually your cost of living should be lower upon retirement. I read somewhere that you should plan on replacing 70-80% of your current income. Your house should be paid off and your daily living expenses should be lower. You will also be taxed at a lower rate when you are retired.

Basic economics is prices increase over time. In an ideal world your house should be paid off, but not everyone has that done before they retire. I plan on selling mine before retirement and downsizing but that's just me. I know a few that still retired with a mortgage and were more than fine. It's all in how you plan and prioritized your life.

My financial plan is to assume my pension and SS aren't there when I go. Sadly it probably will be true

 

[UpstateNYUPSer(Ret)]

Basic economics is prices increase over time. In an ideal world your house should be paid off, but not everyone has that done before they retire. I plan on selling mine before retirement and downsizing but that's just me. I know a few that still retired with a mortgage and were more than fine. It's all in how you plan and prioritized your life.

My financial plan is to assume my pension and SS aren't there when I go. Sadly it probably will be true

My plan is to have my mortgage paid off just before I retire. I still don't know if I will stay here or sell/rent and move closer to my daughter. I will live off of my pension and not touch my 401k or SS until I have to.

 

[Damondogg]

Change it to before tax. If you put in $100.00 a week your take home pay should only be $70.00 less. That's $30.00 free dollars and at the end of the year will help you on taxes. The more you can put into the 401k the more it helps you at tax time. If you put your money in after tax you may pay 25% on your money, and if you put it in pretax you may pay 15% tax on your money when you withdraw it.

I didn't know that. Thanks for your help!

 

[upschuck]

I didn't know that. Thanks for your help!

But keep in mind that you pay taxes when you withdraw the money. Pretax, you get tax break now, post tax you get tax break when you withdraw. Is one better than the other, who knows, tax rates go up and down, and is a crapshoot as to which one would come out ahead.

 

[IVE GOTTA PACKAGE 4U]

But keep in mind that you pay taxes when you withdraw the money. Pretax, you get tax break now, post tax you get tax break when you withdraw. Is one better than the other, who knows, tax rates go up and down, and is a crapshoot as to which one would come out ahead.

I'm 50/50

 

[upschuck]

I'm 50/50

Yoy are a little wishy washy.

 

[IVE GOTTA PACKAGE 4U]

Yoy are a little wishy washy.

Not at all. My 401k is pretax then I balance it out with my ROTH IRA

 

[upschuck]

I'm 50/50

I'm mostly pre tax with a little post. I don't think my retirement taxes will be higher than while working

 

[IVE GOTTA PACKAGE 4U]

I'm mostly pre tax with a little post. I don't think my retirement taxes will be higher than while working

The federal deficit is 17 trillion +. You do the math

 

[upschuck]

Not at all. My 401k is pretax then I balance it out with my ROTH IRA

Just giving you grief, that's all

 

[upschuck]

The federal deficit is 17 trillion +. You do the math

I say we declare war on China, then cancel debt, done.

 

[Brownslave688]

I'm mostly pre tax with a little post. I don't think my retirement taxes will be higher than while working

It's not even about the taxes for me. It's about knowing I don't have to worry about the taxes.


If laws stay how they are I can spend 100% of what's in my Roth account and not worry about what Uncle Sam wants.

 

[IVE GOTTA PACKAGE 4U]

I say we declare war on China, then cancel debt, done.

OK. That takes us down to 15 trillion.

 

[Brownslave688]

I say we declare war on China, then cancel debt, done.

If I'm going to war I demand they pay back all the money they stole from SS first.

 

[upschuck]

It's not even about the taxes for me. It's about knowing I don't have to worry about the taxes.


If laws stay how they are I can spend 100% of what's in my Roth account and not worry about what Uncle Sam wants.

I'd rather have the break now. Doesn't really matter 20% now or later, all equals the same net.

 

[IVE GOTTA PACKAGE 4U]

But if your investments doubles,you are paying double the tax.

I'd rather have the break now. Doesn't really matter 20% now or later, all equals the same net.

 

[Brownslave688]

I'd rather have the break now. Doesn't really matter 20% now or later, all equals the same net.

No because all of those gains are free in a Roth.

20% of 100k is a lot less than 20% of a million.

 

[upschuck]

But if your investments doubles,you are paying double the tax.

But you have double the money. If everything is identical(invested amounts and taxes), there would be no difference whatsoever.

 

[upschuck]

No because all of those gains are free in a Roth.

20% of 100k is a lot less than 20% of a million.

Yes, but you don't start as high, so gains are percentagely the same, but total amount is less. Assuming take home is identical both ways.

 

[IVE GOTTA PACKAGE 4U]

But you have double the money. If everything is identical(invested amounts and taxes), there would be no difference whatsoever.

Better rethink that one Froggy.