Roth IRAs are great

[Anonymous]

Encourage your kids to open a Roth IRA!

I opened a Roth IRA right when I got out of undergrad at my dad’s suggestion. I was making 43k a year, I would contribute up to the match for wherever I was working’s 401k and then max out my Roth, only 5k-ish a year back then. I’ve had that Roth for 15 or so years. The performance metrics only go back 10 years, but when I look at it I have a time weighted return of 15.6% compared to the s&p 500 return of 12.6%. I am all for putting as much money in s&p as possible, but I took some risks in tech and weed stocks, I would trade actively within that Roth when I was younger. Buuuut that 3% increase is only like 7 k-ish. I am proud I beat the market so far, but that’s not too much extra cash compared to just passive s&p investment. However it was a great learning experience, I certainly invested in some real duds as well. Now my spouse and I make too much to contribute to Roths ( I know I could do backdoor, but haven’t bothered). Long story short, without any additional contributions, that Roth account will be well over a million bucks when I retire, simply by putting in 5-6k a year for the first 15 years of my career. I will also have a 401k, pension, and social security at retirement, but man that tax free Roth money is gonna be sweet, assuming society doesn’t collapse between now and then.
I’m done babbling, thank you for coming to my TEDtalk

[Anonymous]

There is no match for a Roth IRA. There is an annual limit based on the account holder’s income up to a limit (7k in 2024).

Roth 401ks may have matches at employers who elect to provide them to incentivize employees’ participation in the plan. Same with traditional 401ks.

Glad you got started early, PP. Keep it up as long as you can. For now, some people can do backdoor Roth IRA contributions, which is really just a sexy term for an IRA conversion made in the same year as a non deductible traditional IRA contribution, but that can have complex tax consequences if you have invested traditional IRA accounts.

[Anonymous]

I matched my 16 year olds sons w2 earnings in a Roth for this this year and intend to continue doing the same.

[Anonymous]

Anonymous wrote:Encourage your kids to open a Roth IRA!

I opened a Roth IRA right when I got out of undergrad at my dad’s suggestion. I was making 43k a year, I would contribute up to the match for wherever I was working’s 401k and then max out my Roth, only 5k-ish a year back then. I’ve had that Roth for 15 or so years. The performance metrics only go back 10 years, but when I look at it I have a time weighted return of 15.6% compared to the s&p 500 return of 12.6%. I am all for putting as much money in s&p as possible, but I took some risks in tech and weed stocks, I would trade actively within that Roth when I was younger. Buuuut that 3% increase is only like 7 k-ish. I am proud I beat the market so far, but that’s not too much extra cash compared to just passive s&p investment. However it was a great learning experience, I certainly invested in some real duds as well. Now my spouse and I make too much to contribute to Roths ( I know I could do backdoor, but haven’t bothered). Long story short, without any additional contributions, that Roth account will be well over a million bucks when I retire, simply by putting in 5-6k a year for the first 15 years of my career. I will also have a 401k, pension, and social security at retirement, but man that tax free Roth money is gonna be sweet, assuming society doesn’t collapse between now and then.
I’m done babbling, thank you for coming to my TEDtalk

Dude, that Roth is gonna be taxed

[Anonymous]

Anonymous wrote:

Anonymous wrote:Encourage your kids to open a Roth IRA!

I opened a Roth IRA right when I got out of undergrad at my dad’s suggestion. I was making 43k a year, I would contribute up to the match for wherever I was working’s 401k and then max out my Roth, only 5k-ish a year back then. I’ve had that Roth for 15 or so years. The performance metrics only go back 10 years, but when I look at it I have a time weighted return of 15.6% compared to the s&p 500 return of 12.6%. I am all for putting as much money in s&p as possible, but I took some risks in tech and weed stocks, I would trade actively within that Roth when I was younger. Buuuut that 3% increase is only like 7 k-ish. I am proud I beat the market so far, but that’s not too much extra cash compared to just passive s&p investment. However it was a great learning experience, I certainly invested in some real duds as well. Now my spouse and I make too much to contribute to Roths ( I know I could do backdoor, but haven’t bothered). Long story short, without any additional contributions, that Roth account will be well over a million bucks when I retire, simply by putting in 5-6k a year for the first 15 years of my career. I will also have a 401k, pension, and social security at retirement, but man that tax free Roth money is gonna be sweet, assuming society doesn’t collapse between now and then.
I’m done babbling, thank you for coming to my TEDtalk

Dude, that Roth is gonna be taxed

No f'in way. It's already taxed money. They may force an RMD on it but I don't see it being taxed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Encourage your kids to open a Roth IRA!

I opened a Roth IRA right when I got out of undergrad at my dad’s suggestion. I was making 43k a year, I would contribute up to the match for wherever I was working’s 401k and then max out my Roth, only 5k-ish a year back then. I’ve had that Roth for 15 or so years. The performance metrics only go back 10 years, but when I look at it I have a time weighted return of 15.6% compared to the s&p 500 return of 12.6%. I am all for putting as much money in s&p as possible, but I took some risks in tech and weed stocks, I would trade actively within that Roth when I was younger. Buuuut that 3% increase is only like 7 k-ish. I am proud I beat the market so far, but that’s not too much extra cash compared to just passive s&p investment. However it was a great learning experience, I certainly invested in some real duds as well. Now my spouse and I make too much to contribute to Roths ( I know I could do backdoor, but haven’t bothered). Long story short, without any additional contributions, that Roth account will be well over a million bucks when I retire, simply by putting in 5-6k a year for the first 15 years of my career. I will also have a 401k, pension, and social security at retirement, but man that tax free Roth money is gonna be sweet, assuming society doesn’t collapse between now and then.
I’m done babbling, thank you for coming to my TEDtalk

Dude, that Roth is gonna be taxed

No f'in way. It's already taxed money. They may force an RMD on it but I don't see it being taxed.

+1

[Anonymous]

I think everyone here knows that for funding college, OP

[Anonymous]

DC1 started a Roth at 18. We put in the entire money earned that summer into it (about 2.5K). Since then he's contributed the full extent possible based on internship and on-campus earnings. About $25K in it now. He'll leave college with $30K+ in his Roth.

Hope to do the same for remaining kids as well.

[Anonymous]

Most people don’t have an extra $5k or any k when they are young. They are paying back student loans for a looooong time.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Encourage your kids to open a Roth IRA!

I opened a Roth IRA right when I got out of undergrad at my dad’s suggestion. I was making 43k a year, I would contribute up to the match for wherever I was working’s 401k and then max out my Roth, only 5k-ish a year back then. I’ve had that Roth for 15 or so years. The performance metrics only go back 10 years, but when I look at it I have a time weighted return of 15.6% compared to the s&p 500 return of 12.6%. I am all for putting as much money in s&p as possible, but I took some risks in tech and weed stocks, I would trade actively within that Roth when I was younger. Buuuut that 3% increase is only like 7 k-ish. I am proud I beat the market so far, but that’s not too much extra cash compared to just passive s&p investment. However it was a great learning experience, I certainly invested in some real duds as well. Now my spouse and I make too much to contribute to Roths ( I know I could do backdoor, but haven’t bothered). Long story short, without any additional contributions, that Roth account will be well over a million bucks when I retire, simply by putting in 5-6k a year for the first 15 years of my career. I will also have a 401k, pension, and social security at retirement, but man that tax free Roth money is gonna be sweet, assuming society doesn’t collapse between now and then.
I’m done babbling, thank you for coming to my TEDtalk

Dude, that Roth is gonna be taxed

No f'in way. It's already taxed money. They may force an RMD on it but I don't see it being taxed.

I think some of them will be taxed eventually but probably with some sort of cutoff— like $5 million and above

[Anonymous]

It's not Roth, it's you taking risks inside the Roth. I bought bunch of risky stocks and crypto all outside of Roth and all doubled last year. Cleanspark doubled just this week.Anything I bought in bought in 2020 went up.
My trading account balance is about to overtake my long term investment account and Roth combined.
My Roth is sitting still boring as heck because it has such a small contribution limit. I will trade inside of it at some point - something very few people do and know about it.
Usually I buy and sell in regular investment account because my tax liability is so small.
Roth is not a miracle account. It's what you hold in it. Not all of us pay high taxes and find Roth special.

[Anonymous]

What are some good investment options for a Roth IRA? I have about 30 years to go till retirement and need some advice on where to start. Are index funds/ETFs too conservative?

[Anonymous]

Anonymous wrote:What are some good investment options for a Roth IRA? I have about 30 years to go till retirement and need some advice on where to start. Are index funds/ETFs too conservative?

OP here.
Dollar cost averaging into an s&p tracker is by far the best route for almost everyone. Do that. But I wouldnt argue against throwing a few grand into a few stocks that you think have legs. Sometime you can pick a winner, example: I’ve gained a total of 73% on my s&p holdings, but I have one stock I put 14K into over the years and it’s up 657% (total gains of 95K). But that was literally dumb luck. So go with s&p.

[Anonymous]

Anonymous wrote:I think everyone here knows that for funding college, OP

I absolutely don’t agree with you. New people find this site everyday, and many of them for reasons other than an interest in investing, it if someone that hasn’t watched this forum for years stumbles on this thread, maybe they can learn something that benefits them or their kids.

[Anonymous]

Anonymous wrote:It's not Roth, it's you taking risks inside the Roth. I bought bunch of risky stocks and crypto all outside of Roth and all doubled last year. Cleanspark doubled just this week.Anything I bought in bought in 2020 went up.
My trading account balance is about to overtake my long term investment account and Roth combined.
My Roth is sitting still boring as heck because it has such a small contribution limit. I will trade inside of it at some point - something very few people do and know about it.
Usually I buy and sell in regular investment account because my tax liability is so small.
Roth is not a miracle account. It's what you hold in it. Not all of us pay high taxes and find Roth special.

I’d like to know more. How do you not pay high taxes, pass through? I agree Roth isn’t a miracle, literally nothing is a miracle. I agree that very few people do or know an out trading within a Roth. However, if you are primarily concerned about investing m for retirement income, and if you have sufficient funds to work with, either through back doors or luck, you can make a big difference in your future tax liabilities by actively managing your Roth.