Roth IRAs are great

[Anonymous]

Anonymous wrote: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.

Thats amazing! starting so early can have a huge impact

[Anonymous]

Don’t sleep on the newish 529 rollover to a Roth IRA option if you want to plan for college but worry about having too much in the 529 due to state school tuition or scholarships

[Anonymous]

Anonymous wrote: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.

exactly! I was paying student loans, daycare, and a mortgage in DC at the same time….on a nonprofit salary! No Roth for me LOL

[Anonymous]

Anonymous wrote:

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

They tried that last time.. and to shut down backdoor Roth. Both measures failed.

[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.

Duh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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

They tried that last time.. and to shut down backdoor Roth. Both measures failed.

I know but if we ever get around to raising taxes again, which is an if, the fact that they tried before is to me a signal they’ll try again not that it’s a dead end.

[Anonymous]

Check your privilege! Having millions and educated parents is great yay!

[Anonymous]

They’re not going to be able to tax retroactively. If a tax happens, it will exclude the balance on day of enactment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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

They tried that last time.. and to shut down backdoor Roth. Both measures failed.

I know but if we ever get around to raising taxes again, which is an if, the fact that they tried before is to me a signal they’ll try again not that it’s a dead end.

There's a wing of the Democrats that believe there should be no benefits at all for the UMC. If they were smart they would have solely targeted the mega backdoor Roths which only benefit very high income people with employers that have special 401ks specifically setup to do the scheme. They lose lots of support from proposing these sorts of things so I'm not worried.

[Anonymous]

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

+1 They will appreciate this in future years.

[Anonymous]

Anonymous wrote: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.

All of his earned summer money was put away? What did he use for spending money?

[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

1) The advantages of a Roth IRA are well-known. Your post is like someone saying, "Guess what? Saving money is actually a good thing and may help you get ahead!"

2) Please don't encourage individual stock picking. It has been documented over and over again that the S&P outperforms virtually all individual stock pickers over the long-term, including Harvard and MIT mathematicians paid 7-figure salaries to give it their full attention. If you got lucky in weed stocks(??), good for you but don't encourage others to do foolish things.

[Anonymous]

Anonymous wrote: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.

The PP stated they put into their 401K up to the company match and then maxed the Roth. Never mentioned a match for their Roth. It's the way to do it. If you have more, then continue to add to the 401K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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

They tried that last time.. and to shut down backdoor Roth. Both measures failed.

I know but if we ever get around to raising taxes again, which is an if, the fact that they tried before is to me a signal they’ll try again not that it’s a dead end.

It won't pass the courts. This is taxation of already taxed $$. That's robbery and I don't think any supreme court will put up with it.

[Anonymous]

Anonymous wrote:

Anonymous wrote: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.

All of his earned summer money was put away? What did he use for spending money?

We put that money in. Summer after HS he earned about $2.5K, we put that into his Roth. Next summer and fall (sophomore) he had an internship and made more than the Roth contribution amount so we made him put that money in. Same in subsequent year. This year (junior/senior) he already pre-funded Roth in anticipation of earning it back this summer. He has a campus job to cover living expenses.