Comments on: Where Should You Invest First - 401(k) or IRA? http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/ Your Money. Your Career. Your Life. Mon, 08 Sep 2008 03:54:01 +0000 http://wordpress.org/?v=abc By: What Should You Do with your TSP When You Leave the Service? | Military Finance Network http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-10117 What Should You Do with your TSP When You Leave the Service? | Military Finance Network Sat, 26 Jul 2008 18:15:24 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-10117 [...] final. Once it has been done, it cannot be reversed. Many annuities come with much higher fees than 401(k) plans and IRAs, and many states charge high tax premiums on annuity plans. In addition, you may pass away before [...] [...] final. Once it has been done, it cannot be reversed. Many annuities come with much higher fees than 401(k) plans and IRAs, and many states charge high tax premiums on annuity plans. In addition, you may pass away before [...]

]]> By: walkerny http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-9156 walkerny Thu, 12 Jun 2008 15:28:11 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-9156 Another VERY important thing to take into account is the state you live in now and the one you will retire to: I pay in to my 401K now in the highest tax state in the union, New York. So my tax break realized right now is 40% or more. If I pick a low state tax state to retire to, say the total Fed & State damage is 25%, It will make the 401K a 15% better deduction than the Roth. If you are from high tax states NY, CT, MA, PA, OH, IL, MD, etc you should take this into account. Another VERY important thing to take into account is the state you live in now and the one you will retire to:

I pay in to my 401K now in the highest tax state in the union, New York. So my tax break realized right now is 40% or more. If I pick a low state tax state to retire to, say the total Fed & State damage is 25%, It will make the 401K a 15% better deduction than the Roth.

If you are from high tax states NY, CT, MA, PA, OH, IL, MD, etc you should take this into account.

]]> By: walkerny http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-9154 walkerny Thu, 12 Jun 2008 13:39:49 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-9154 The tax free benefit of the Roth is based in part on faith the government will 'play fair' decades from now. I think they will be eye Roths as a hungry wolf eyes a lamb. I max out my 401K limit to the current 15500, and if I have any left it goes in a Roth. We also are working on being debt free. Hopefully in my mid 50's (ten years from now) we will be debt free and can both max our 401K's and Roths to the limit, including the catch-up limits. One thing to check on is whether either spouse can take part in either a Health Savings Account, or some other form of yearly medical savings plan. The ones you have to 'estimate' the next years med expenses (you lose any excess) are a pain, but if you have big "Known" medical costs looming (eyeglasses, braces, operation, Lasik, etc.) you can basically get 30-40% of these costs back in the form of a tax break. The tax free benefit of the Roth is based in part on faith the government will ‘play fair’ decades from now. I think they will be eye Roths as a hungry wolf eyes a lamb.

I max out my 401K limit to the current 15500, and if I have any left it goes in a Roth. We also are working on being debt free. Hopefully in my mid 50’s (ten years from now) we will be debt free and can both max our 401K’s and Roths to the limit, including the catch-up limits.

One thing to check on is whether either spouse can take part in either a Health Savings Account, or some other form of yearly medical savings plan. The ones you have to ‘estimate’ the next years med expenses (you lose any excess) are a pain, but if you have big “Known” medical costs looming (eyeglasses, braces, operation, Lasik, etc.) you can basically get 30-40% of these costs back in the form of a tax break.

]]> By: How much money do I need » Blog Archive » Where Should You Invest First - 401(k) or IRA? http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-6548 How much money do I need » Blog Archive » Where Should You Invest First - 401(k) or IRA? Thu, 20 Mar 2008 16:34:46 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-6548 [...] JLP wrote an interesting post today onHere’s a quick excerptWhen I first started investing, I was eligible for an IRA, but I was in the USAF and we did not have a 401(k) plan. It wasn’t until I was in for about two years that the military had an equivalent plan, the Thrift Savings Plan (TSP). … [...] [...] JLP wrote an interesting post today onHere’s a quick excerptWhen I first started investing, I was eligible for an IRA, but I was in the USAF and we did not have a 401(k) plan. It wasn’t until I was in for about two years that the military had an equivalent plan, the Thrift Savings Plan (TSP). … [...]

]]> By: Carnival of Personal Finance #141 - The College Years Edition — Broke Grad Student http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-6042 Carnival of Personal Finance #141 - The College Years Edition — Broke Grad Student Mon, 25 Feb 2008 16:43:43 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-6042 [...] Where Should You Invest First - 401(k) or IRA? Patrick from Cash Money Life talks about the factors to consider when deciding. [...] [...] Where Should You Invest First - 401(k) or IRA? Patrick from Cash Money Life talks about the factors to consider when deciding. [...]

]]> By: Dividend growth investor http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5887 Dividend growth investor Mon, 18 Feb 2008 22:20:36 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5887 Thanks for the nice article. I myself like cutting my taxable income by putting as much as possible into a 401k. I think that over time whether you invest into 401k or a ROTH ira doesn't matter, as long as you contribute for retirement. Thanks for the nice article. I myself like cutting my taxable income by putting as much as possible into a 401k. I think that over time whether you invest into 401k or a ROTH ira doesn’t matter, as long as you contribute for retirement.

]]> By: Sunday Money Roundup - The Flu Attacked Our House Edition. | My Two Dollars http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5859 Sunday Money Roundup - The Flu Attacked Our House Edition. | My Two Dollars Sun, 17 Feb 2008 15:01:15 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5859 [...] Cash Money Life talks about something very important in Where Should You Invest First - 401(k) or IRA? [...] [...] Cash Money Life talks about something very important in Where Should You Invest First - 401(k) or IRA? [...]

]]> By: Dividends4Life http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5857 Dividends4Life Sun, 17 Feb 2008 12:47:24 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5857 You are doing it the right way. Don't leave any match dollars on the table, then fund your Roth, then work toward maxing out your 401(k). Best Wishes, D4L You are doing it the right way. Don’t leave any match dollars on the table, then fund your Roth, then work toward maxing out your 401(k).

Best Wishes,
D4L

]]> By: Financial planning tips and Roth IRA conversion planning for those in their 30s and 40s » Chance Flavors of the Week http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5855 Financial planning tips and Roth IRA conversion planning for those in their 30s and 40s » Chance Flavors of the Week Sun, 17 Feb 2008 11:38:27 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5855 [...] 401(k) or IRA? - Lots of good IRA and 401K information here and some helpful suggestions on how to integrate the two avenues… [...] [...] 401(k) or IRA? - Lots of good IRA and 401K information here and some helpful suggestions on how to integrate the two avenues… [...]

]]> By: Saturday Roundup - Feb 16th, 2008 - Getting Over the Flu edition | Credit Withdrawal - Helping You Kick the Credit Habit http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5848 Saturday Roundup - Feb 16th, 2008 - Getting Over the Flu edition | Credit Withdrawal - Helping You Kick the Credit Habit Sat, 16 Feb 2008 16:41:30 +0000 http://cashmoneylife.com/2008/02/14/invest-401k-traditional-roth-ira/#comment-5848 [...] Where Should You Invest First - 401(k) or IRA? - [...] [...] Where Should You Invest First - 401(k) or IRA? - [...]

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