401K vrs IRA or eqiv

[mayday]

who belongs to what, opinions welcome

[Tim Johnson]

Mayday,

 

Why two choices?

[mayday]

just curios, I only have a 401k. thinking about starting a roth IRA. so I enabled 2 choises for those who may do both

[Storkman]

I was thinking along the same lines Mayday. The 401k doesn't seem to grow quite fast enough, and they quit our employer match a couple years ago.

[Guest CNC Apps Guy 1]

Even without an employer match, over the course of 30 years with a modest diversified investment (split risk 3 ways equally - Agressive, Medium, Low) will net pretty good results over the long haul. Though probably not enough to last another 30 years, but that 401k plus your house would be enough to retire comfortably for quite some time (with housing market in SoCal being considered)

 

JM2C

[Fred @ Slate Industries]

I put the maximum allowed in our 401k here

15%.It hurts a little.

[Brendan P]

I was always told that the only way you should start an IRA is if you are already maxing out you 401K.

 

As James stated,you can achieve good results,you just need 'time' on your side!

[mayday]

ya it all sounds good, I dont know many people that can afford to max there contributions. with 1 in collage and another going next fall money dont sit around much. like James said, a house to put up at a later date to me is a sound investment. real estate rarly drops in value

[Brendan P]

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ya it all sounds good, I dont know many people that can afford to max there contributions.

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Specially when we all need our little 'toys' in life!!

[mayday]

quote:

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our little 'toys'

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I hear a bucket, hel by the time I retire I'll prolly have to by a 3 wheeled Harley . unless they are making motorized Vtwin wheelchairs by then.

 

mayday teh live while the livin's good. cant take it with you

[J Coulston]

I don’t contribute anything. Im relying solely on Social Security, our good honest government will take care of me.

 

[Ripper3785]

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I don’t contribute anything. Im relying solely on Social Security, our good honest government will take care of me.

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Best joke of the day!

 

[Guest CNC Apps Guy 1]

Ya know John,

 

The SCARY thing is that people are doing this. It was NEVER meant to be someone's sole source of income. NEVER NEVER NEVER. It's the "entitlement" liberals that have sold it that way to a great many of the American people. Now we all have to suffer for their stupidity. The suck thing is we are just throwing 14-15% of our paychecks away each and every pay period with only those that are 50+ that are guaranteed anything. I wish they would just let me put my FICA away the way I want to, man, I'd be livin' large if I could put it away plus what I'm contributing now. Damn, I'd actually be RICH in retirement. Liberals

[bryan314]

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I don’t contribute anything. Im relying solely on Social Security, our good honest government will take care of me.

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Sad part is, while I'm sure you're kidding, there are a lot of baby-boomers (and other generations) who actually believe this. Many baby-boomers saw that they hadn't saved anything and a few years back had the laws partially rewritten. Participants of 401ks that are age 50 and over now can have 'catch-up' contributions. The me generations play now, pay later attitude is finally catching up to them.

 

Bryan

[George_Gerhard]

If possible max out your 401k, (pre tax dollars)

IRA is a good second choice or look into a variable universal life insurance policy. Dont laugh this is an excellent tax deferred vehicle. If you are trying to save for a childs education and you purchase an education fund, the government see this if you apply for financial aid, but no body will ever see the life policy

[Guest CNC Apps Guy 1]

Kids in their 20's, if they start now putting 3% or so will retire millionaires. (Assuming moderate risk investing)

 

Food for thought.

[Quickmike]

We have a "simple plan" here. Max per year in a simple plan is $9000.00 this year, which I will contribute all of it. Everyone here calls it a 401k but its not. It really is a simple IRA.

401k's have higher costs associated and applied to the business than sep ira's or simple ira's. Check out "The Motley Fool.com" Some really good information is available there. With most of the plans I've been associated with the companies will have a SEP IRA plan and call it a 401k. With these plans the cost is mostly absorbed by us the contibutor only it is not very easy to find what the cost actually is. It gets hidden in management fees from the plan provider.

[chad fisher]

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Kids in their 20's, if they start now putting 3% or so will retire millionaires. (Assuming moderate risk investing)

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I dunno about that one. I have put into a 401 since i was 22 with 8% and a 4% company match up to 8%.

I am 28 now and invested risky, moderate, and safley

and i am not impressed at all with what i currenty have and i am 29 now. I doubt i will see it ever hit the million mark, even if i dont touch it and work another 40 years. But then again starnger things have happened.

[Ripper3785]

Even if those of us in our 20's 401k's grow to a million, in 40 years, a million isn't gonna be squat.

[Guest CNC Apps Guy 1]

You're forgetting about Compounding Interest. It doesn't really begin to snoball until you hit the 20 year mark - give or take a few. The key though is the compounding interest. Besides the last few years have not been stellar in growth. Modest gains. Over the last 5 years I've averaged over 12% return on my investment. If I had some money I'd invest directly in the stock market, and sit on it. If we would have invested as little as $10k in Microsoft back in the 80's, You'd need a couple Armoured Cars to haul it around. The other key is to let it sit. True growth is seen ever decades not quarters/years.

 

JM2C

[Guest CNC Apps Guy 1]

A million won't be squat if you're up to your eyeballs in debt. You still need to be financially prudent while you're young. If you have not debt by retirement age, you'll be able to live comfortably - provided your house is paid off.

 

JM2C

[MetalMarvels]

The other "sure-fire" way to get retirement growth is to absolutely take advantage of any company matching that is available to you. For example, the company I work for during the day has a 4% matching policy (they will match 100% of my investment up to 4% of my salary). That means that I AUTOMATICALLY make 100% on up to 4% of my base salary. If I put in $100 - they put in $100 - I get the interest/investment growth on the $200 AND the $200. I don't put in more than they match, because there are better investments for anything over what they match.

 

What I find scary are the statistics on how many folks will be dead broke (or worse) when they reach retirement age.

[Guest CNC Apps Guy 1]

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...What I find scary are the statistics on how many folks will be dead broke (or worse) when they reach retirement age.

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I hear you. Too many people I know in their late 30's and older have no retirement plan

[MetalMarvels]

I am CERTAINLY not counting on ANYTHING from Social Security. I get my annual statement from them and would not have a PRAYER of living on what I will get back. Like you, I wish I had the FICA money back to privately invest.....I would really have something then.

[TREV]

i have read both good and bad in this thread on 401k's for those of you that do not like the results your seeing maybe you should talk to the plan admin. and see if they could expand the options for investing.there are countless places to invest,perhaps the options available to you are just lemons.i am presently putting 15%into my plan and am seeing tremendous gains all across the board (12%-23% gains) i also have investments outside of my work plans.i also have accounts set up for my son that i contribute 10 dollars a week into.that alone even with no gain will be almost 10 grand when he turns 18. i am 33 and plan on being out clean between 53 and 55 depending on how things go.my wife and i decided to make some sacrifices now to be able to retire compltley at a modest age. ie: we dont rent movies or go to the theater, we only eat out about once every 3 months .vacations to us are camping in national parks and forests, not hotels and expensive theme parks.

not that i am against people who do things differently , it is just what works for us

just my thoughts,

trevor