401k versus IRA

Discussion in 'Men's Economics' started by Logan44551, Jul 27, 2017.

  1. Logan44551

    Logan44551 Member

    It isn't matched it is a set amount included in our wage. It is called an annuity account. I can't change the amount that goes into it, it is set by our contract.
  2. Dr JIM

    Dr JIM Member

    What options are available with regard to HOW the money is invested?

    It sounds like it’s a VAA as in a Variable Annuity Account but do you know what the EXPECTED earnings are based upon ???

    Compare the above to a FAA as in a Fixed Annuity Account in which the earnings tend to be lower but are FIXED.

    Unions use a LARGE number of vehicles to invest monies to optimize their rate of return, but oftentimes the “admin costs” are enough to make a grown man cry.

    That’s why it’s important to KNOW what your options are, as they may be limited.
    Last edited: Jan 10, 2018
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  3. Logan44551

    Logan44551 Member

    It isn't self directed, in terms of what it is invested in. You can take a class and self direct it, but i haven't done that. Heres a picture of what the account is invested in 20180110_154628.jpg
  4. Dr JIM

    Dr JIM Member

    Oh and I’m not bashing unions per se but many folk are unaware of how much “management fees” can impact
    the rate of return.

    To that end bc they are able to invest large sums on monies conglomerates such as Unions to Walmart are able to negotiate
    “better deals” than the average Joe who opens a single IRA with say Bank of America.

    All that being said the fact you are asking these questions NOW
    tells me you’re a step, if not light years, ahead of most your age.

    Many are investing their time experimenting w PEDs and 20 years later will be relying upon SSI for retirement.

  5. Logan44551

    Logan44551 Member

    Yea, I've really been looking to the future more the last couple years. When i was younger, I thought the pension and annuity from the union would be enough to retire on. Then one of my co-workers retired pretty young last year at 55. He said his health insurance for him and his wife is like 2200 a month, which is pretty much half of his income now. Made me start thinking about getting something extra in there now.
  6. biglumber69

    biglumber69 Member AnabolicLab.com Supporter

    Dave Ramsey changed my life. I would suggest bye his finical peace unversity. The plan he lays out got me 30 grand out of debt in 3 years. Now I am growing my retirement plus I am getting ready to build a house with out a loan. I guess you can call me a shill for Ramsey. But I believe people should read his books
    HIGHRISK, Ultimatepip and Logan44551 like this.
  7. Old

    Old Member

    It has been a while since looking, but a few years ago the IRS did not allow deducting IRA contributions from your income if your employer offers a 401K ... even if you don't use it. That doesn't apply to ROTH IRA (which is never deductable anyway). You can check this stuff out on the IRS website.
    As mentioned already, go with both, or max your ROTH first and if you still have money, do the 401K. If you are serious about $150-200/wk, then you will need both since IRAs max at 5500/year (if you are under 50).

    HIGHRISK Member

    He changed my life! I still listen daily. I thrive on the millionaire theme hours.
  9. Brandaddy

    Brandaddy Member

    Personally, I like to be really diversified. I have a pension through the union (which I don't add to), also I like to max out my own IRA contributions on top of that. What is left I invest in cheap rentals. You can find cheap 40-60k houses around where I live that need minimal to no work done to them and you can pocket a a good 300 a month off them even after your expenses are covered. That way you get the power of compounding interest through the pension and IRA, and also can get a good 30-40% cash on cash with the rentals. Imagine having 10 rentals at an average of 650 a month all paid off and a couple million in an investment account when you're 50.
    biglumber69, Logan44551 and HIGHRISK like this.
  10. Dr JIM

    Dr JIM Member

    Pity so many on this forum are more interested in building muscle, than the long term financiall security that comes with
    the same type of commitment as Pro B.B.

    And I can’t tell you how many cyclists regret their investment in muscle once they realize they have NOTHING to show for it years later.

    Dave Ramsey is a well informed
    financial analyst and I strongly encourage others to listen to his advice.

    Bottom line folk would be sooo much better off if they maintained
    an PED attitude of moderation, and pursued other more productive venues with their free time.

  11. Logan44551

    Logan44551 Member

    Thought I'd update, I've been throwing 1000 a month into my 401k. I am going to be switching to a Roth 401k from now on. I had no idea the tax free earning potential with the Roth. Just looked and I am getting a 18+% interest on my account currently. Feeling pretty good about my future currently 37.
  12. gr8whitetrukker

    gr8whitetrukker Member AnabolicLab.com Supporter

    Not to mention the tax shield on your income
  13. Logan44551

    Logan44551 Member

    Exactly. BTW just started listening to Dave Ramsey. I've seen you guys talking about him before. Loving the podcast
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  14. gr8whitetrukker

    gr8whitetrukker Member AnabolicLab.com Supporter

    Hes the one that got me financially on track. Debt is dumb cash is king!
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  15. Logan44551

    Logan44551 Member

    So I'm thinking I need to suspend 401k contributions for awhile to knock down some credit card debt my wife has run up. Step 2 here I come, hopefully I can knock down these in a year, rice and beans time
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  16. mp46

    mp46 Member

    As I said in the other thread, concentrate on what has the highest interest, if you really are making 18% on your 401k only suspend contributions if your debt is more than 18% if not keep contributing to it, if it does dip below the rate you owe debt then suspend 401k contributions and pay off the debt. It's just a balancing act you have to keep an eye on.
  17. SaneDog

    SaneDog Member

    I like a 401k better in my opinion.
  18. Logan44551

    Logan44551 Member

    Shot out to the folks at John Hancock, my 401k account is earning 23% rate of return currently. Definitely switching to a Roth account, that interest earned adds up quick! Hot damn!
  19. $BlackBeard

    $BlackBeard Member AnabolicLab.com Supporter

    Don't do that. You will incur ordinary income tax by doing this. Just stop contributing to the traditional 401k and start contributing to the Roth 401k (if this is what you are referring to).

    If no Roth 401k, keep contributing to the Traditional 401k (pre-tax) up to your match amount. Then, any excess that would have gone towards the 401k can be put into a Roth IRA (up to the limit).

    Oh, JH did not make you 23%. You made that money in spite of them. The market is up a lot! You made a lot of money this year investing almost anywhere near the US stock markets.
  20. Logan44551

    Logan44551 Member

    That's what I meant.
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