anyone max out their 401k?

[ultimatebob]

^ just the 6%. And the pay here you know sucks - I started out of school.

Ah, OK. I was there when they were phasing out the cash balance pensions, so I got an extra 2% on top of that for awhile.

That was the one lone benefit for working for the evil empire... a nice nest egg when I left

 

[BurnItDwn]

I contribute like around 1/3 of the max, which is the max amount that company matches.

I participate in the stock purchase plan my employer provides, I get a 10% discount on company stock, and, I dont like to keep all my eggs in one basket so I do sell off from time to time. I have been using the gains to pay down liabilities (mortgage)

 

[andylawcc]

? you guys like Roth more than Traditional?

 

[xeemzor]

? you guys like Roth more than Traditional?

Roth is better when you plan on being in a higher tax bracket after you retire. Since this is the case for most people roth is usually the better choice.

 

[Brovane]

Since I am in the highly compensated employee bracket I can only put in 6% because of how my company follows the safe harbor rules. I can defer up to 9% of my paycheck.

 

[xeemzor]

Nope. My employer dropped his 401k plan a couple years back. Even if he hadn't, 401k's are only tax-deferred plans, so I'd only invest enough to drop myself to the next tax bracket.

You know that taxes are tiered right?

 

[rh71]

That was the one lone benefit for working for the evil empire... a nice nest egg when I left

I got in toward the end of that pension thing and that's just sitting out there now. The other big benefit now is most people work from home full time including managers. You can guess why I'm still here. They do start experienced professionals at an ok range, so along with the freedom, a lot of people are still here by choice.

 

[jlee]

? you guys like Roth more than Traditional?

Not me.

http://www.gocurrycracker.com/roth-sucks/

I'm also not going to retire at 65 with a shit ton of money. I'd rather have a lower income and have freedom to do whatever I want. I don't need $100k/yr (or more) in retirement.

 

[edro]

Roth is better when you plan on being in a higher tax bracket after you retire. Since this is the case for most people roth is usually the better choice.

Care to explain your logic?
I always assumed I would be in a lower tax bracket in retirement.

 

[BurnItDwn]

? you guys like Roth more than Traditional?

I like traditional. If I was married filing jointly, I would like Roth, but as of right now, I havent signed any contract that gives her rights to half of my shit ... So I want to pay the least taxes now, when im at a higher rate.

I assume I will likely be married in my senior years, so my rate should be much lower given that fiancee and I are on a single income.

 

[Exterous]

I did last year but not this year. New place offers a 457 account so I am contributing more to that than my 403(b) although the overall dollar amount will be close to the same

Care to explain your logic?
I always assumed I would be in a lower tax bracket in retirement.

One reason is that some people think tax rates will increase by the time they retire. You might be in a lower tax bracket when you retire but will the rate of taht lower bracket be higher than your current bracket is now?

Others prefer to hedge their bets. A Roth offers different tax deferred benefits than 401k/403b plans so its a good way to diversify your holdings. My crystal ball about the future is pretty fuzzy so I like to have different options I can try to leverage when it comes time to retire. It makes it more complicated to keep track of now and I am sure my withdrawl calculations will be a PITA but I would rather have several options available

 

[Phynaz]

I've maxed mine out since the mid 90's.

 

[edro]

You guys must make bank!

 

[andylawcc]

One reason is that some people think tax rates will increase by the time they retire. You might be in a lower tax bracket when you retire but will the rate of taht lower bracket be higher than your current bracket is now?

ah, that answered my question, thanks
My primitive thought is: Roth means inescapable tax right now, and Traditional means I MIGHT be able to dodge it later down the road.
my boss gave another opinion - the gains from Roth account are NOT taxable, so it just means how much faith you think you are going to make bank in your investment.

Others prefer to hedge their bets. A Roth offers different tax deferred benefits than 401k/403b plans so its a good way to diversify your holdings. My crystal ball about the future is pretty fuzzy so I like to have different options I can try to leverage when it comes time to retire.

true, right now I ain't even maxing my 401k, but will put that into consideration.

 

[xeemzor]

Care to explain your logic?
I always assumed I would be in a lower tax bracket in retirement.

My goal is to earn just as much, if not more, in retirement than I do working. I've made sacrifices and my expected retirement balance in all accounts is ~$150k by 30.

 

[brianmanahan]

i max out the 401k traditional amount of 18$K, then i put about that much into after-tax 401k and roll it over to my roth IRA every year

plus the normal 5.5$k in roth IRA

plus some in taxable

 

[dullard]

I'm a DINK: Dual-income, no kids.

My wife and I both max out each of our 401ks. We way oversave, but we don't really need the money now. And I'd rather save now while we can then to ever have to worry about money in the future. Plus the flexibility of having most of the investments in a tax-deferred plan is a real benefit when trying to achieve a proper mix of investments (rebalancing in a tax-deferred account is not a taxable event, rebalancing in a taxable account triggers taxes and an accounting nightmare).

That said, we also have taxable investment accounts for the massive tax savings that come along with those for those in the know (i.e., donate shares instead of donate cash to charity). Taxable investments are only taxable when you get dividends or sell the shares. Invest in items that you never intend to sell and focus on having the minimum dividends in the taxable account. But that only really works well when you can heavilly invest in dividend paying stocks in tax-deferred accounts.

 

[Drako]

Yep, putting the full $24K in this year.

 

[brianmanahan]

On top of that I also add another 15k/year post-tax to my 401k.

does yours let you do the in service withdrawals and put that money in a roth IRA? i love it when plans allow that

 

[Engineer]

Don't have a 401k - have a Simple IRA (small company). Max it out at $12,500 per year (this year) and then two regular IRA's @ $5,500 each. Throw $5,000 to $10,000 extra in savings per year when I can see it's to spare.

 

[MongGrel]

I used to, the place I'm at now just started one that isn't even matched yet.

I do have a couple older ones that are doing pretty well though I've never rolled over.

 

[andylawcc]

speaking of rolling over, (double thread hijack), it's more often than not to rollover 401k from previous employer into one account right?

 

[jlee]

speaking of rolling over, (double thread hijack), it's more often than not to rollover 401k from previous employer into one account right?

Yeah, but you can roll it into an IRA wherever you like.

 

[Engineer]

speaking of rolling over, (double thread hijack), it's more often than not to rollover 401k from previous employer into one account right?

I didn't after one employer but after a second one, I rolled them both into a regular IRA. Was easy to do with Fidelity as I simply did it online and my fund choices stayed (no delay between selling and buying - simply transferred).

 

[andylawcc]

Taxable investments are only taxable when you get dividends or sell the shares. Invest in items that you never intend to sell and focus on having the minimum dividends in the taxable account.

so you really meant "invest in items that you never intend to sell IN A SHORT TERM" right?