BurntSienna
Well-Known Member
How do I open a Roth IRA? I went on the website for my 401K and didn't see anything about it. I guess I could just call the 800#. Or is it done a different way?
Teamsters Roth IRA
- Thread starter BurntSienna
- Start date
UpstateNYUPSer(Ret)
Well-Known Member
You can open a Roth 401k on the website. If you want a Roth IRA you will have to go that on your own.
Brownslave688
You want a toe? I can get you a toe.
It's a Roth 401k if you want payroll deducted or you can open your own Ira with any number of companies.
BurntSienna
Well-Known Member
Already have the 401K. An old timer told me I should take advantage of the Roth IRA too. Guess I can go anywhere and set that up. Thanks
rod
Retired 23 years
Beware---some of those old timers are full of BS.
You can't open a Roth IRA through UPS.
You can invest in a Roth 401k.
You can invest in a Roth 401k.
upschuck
Well-Known Member
Maybe, maybe not.
Yes he is full of S*
rod
Retired 23 years
rod
Retired 23 years
Brownslave688
You want a toe? I can get you a toe.
Brownslave688
You want a toe? I can get you a toe.
www.vanguard.com is the best place to open a ROTH IRA
It's a good idea to have both a 401k and a IRA
TheBigBrownWolf
Member
I'm not an accountant but I believe Opening retirement accounts and most importantly what type of retirement account depends on your tax situation and most importantly what type of retirement options your company offers.
For example, if your company offers a 401k with a Roth option. Then it makes no sense to open an IRA account unless you want more options with regards to the type of investments you can choose from.
Choosing between pretax and after taxes (Roth) contributions if you're contributing to a 401k depends on your income situation. For example if your single with no children and your deductions are not above the 6500 deductible standard set by the IRS. I would recommend contributing via pretax that why you can lower your taxable income. Or if you are on any type of student loan forgiveness program and your monthly payments are based on your adjustable income. Pretax is your friend because you have a greater control over how high those payments will be. Increase your pretax will lower your income which will lower your monthly payment requirements.
Contributing to a Roth is great too. Actually if you can contribute to both at the same time is awesome. With that said I would recommend contributing to a Roth more aggressively once your income improves and/or you have higher deductibles. Having children will also pay a major role on how you'll use pretax and Roth because children give you access to tax credits and the government loves the fact that you are creating future tax payers lol.
For example, if your company offers a 401k with a Roth option. Then it makes no sense to open an IRA account unless you want more options with regards to the type of investments you can choose from.
Choosing between pretax and after taxes (Roth) contributions if you're contributing to a 401k depends on your income situation. For example if your single with no children and your deductions are not above the 6500 deductible standard set by the IRS. I would recommend contributing via pretax that why you can lower your taxable income. Or if you are on any type of student loan forgiveness program and your monthly payments are based on your adjustable income. Pretax is your friend because you have a greater control over how high those payments will be. Increase your pretax will lower your income which will lower your monthly payment requirements.
Contributing to a Roth is great too. Actually if you can contribute to both at the same time is awesome. With that said I would recommend contributing to a Roth more aggressively once your income improves and/or you have higher deductibles. Having children will also pay a major role on how you'll use pretax and Roth because children give you access to tax credits and the government loves the fact that you are creating future tax payers lol.
UpstateNYUPSer(Ret)
Well-Known Member
Wolf, you make some excellent points; however, there are others with which I politely disagree.
You suggest that those who are single with no children and take the standard deduction should choose the traditional 401k to lower their pretax income. While this is true, what happens when their income increases and they start a family? At that point it may be better to chose the Roth 401k. At this point in time there is no way to roll over the balances from a traditional to a Roth so you would end up with smaller balances in two retirement accounts instead of a larger balance in one.
You touched on income based payments on student loans. I do realize that it can be very tough to pay on your student loans when you are first starting out but converting to an income based payment simply extends the loan payment period while adding interest to the loan balance. The ideal would be to contribute to your company retirement up to the level of the match while focusing on paying off your loans. This is what my son is doing. He graduated with about $73K in student loan debt and was fortunate to secure a job which provides a competitive salary, generous benefits and a company match on their 401k. He is contributing up to the match, which ranges from 4-6% depending upon contribution, and is paying extra on his loans.
I would recommend the Roth to younger employees just starting out and the Traditional to older employees approaching retirement.
You suggest that those who are single with no children and take the standard deduction should choose the traditional 401k to lower their pretax income. While this is true, what happens when their income increases and they start a family? At that point it may be better to chose the Roth 401k. At this point in time there is no way to roll over the balances from a traditional to a Roth so you would end up with smaller balances in two retirement accounts instead of a larger balance in one.
You touched on income based payments on student loans. I do realize that it can be very tough to pay on your student loans when you are first starting out but converting to an income based payment simply extends the loan payment period while adding interest to the loan balance. The ideal would be to contribute to your company retirement up to the level of the match while focusing on paying off your loans. This is what my son is doing. He graduated with about $73K in student loan debt and was fortunate to secure a job which provides a competitive salary, generous benefits and a company match on their 401k. He is contributing up to the match, which ranges from 4-6% depending upon contribution, and is paying extra on his loans.
I would recommend the Roth to younger employees just starting out and the Traditional to older employees approaching retirement.
Start saving now! Ask Central States. At the very minimum 10%. The 401k is very good, take the risky investments (they're not risky over time). Roth 401k or 401k? Both are good, Roth is better. When you retire convert your Roth 401k to a Roth IRA to avoid Required Minimum Distributions. Get going!
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