401k versus IRA

Logan44551

Member
IDK is an “annuity” would apply in this instance bc if the employer is “matching” your contributions in some manner it would better approximate a 401K or perhaps a 403B type plan.

To that end IF matching funds are involved I’d strongly suggest you MAXIMIZE that component before searching for additional
means of saving for retirement.

Jim
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.
 

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:

Logan44551

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 what the EXPECTED earnings are based upon ???
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 in20180110_154628.jpg
 

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.


Jim
 

Logan44551

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.


Jim
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.
 

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
 

Old

Member
Hey guys just looking for opinions on which is better 401k or an IRA. The 401k is theough the union and not employer matched. I'm going to be 36 this year and starting to think about my future a little more seriously. I think i will probably be putting 150-200 a week into it. I like the IRA becuase i can chose what i invest the money in with more flexibility the 401k seems good too as you can pull money out for certain things without having a tax penalty. Thoughts or advice welcome, thanks!
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
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
He changed my life! I still listen daily. I thrive on the millionaire theme hours.
 

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.
 

Dr JIM

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.

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.

Jim
 

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.
 

gr8whitetrukker

Member
AnabolicLab.com Supporter
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.
Not to mention the tax shield on your income
 

mp46

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

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.
 

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!
 

$BlackBeard

Member
AnabolicLab.com Supporter
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!

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.
 

Logan44551

Member
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.
That's what I meant.
 
Top