Comments on: Unthinkable: Should I Discontinue My Roth 401k Saving? http://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#utm_source=rss&utm_medium=rss&utm_campaign=unthinkable-should-i-discontinue-my-roth-401k-saving A personal finance blog teaching you how to live debt free and use credit wisely. Fri, 10 Feb 2012 15:18:07 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: The Copyeditor's Desk » Blog Archive » Moments of Famehttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-54122 The Copyeditor's Desk » Blog Archive » Moments of Fame Sat, 23 Jan 2010 21:15:33 +0000 http://www.nodebtplan.net/?p=351#comment-54122 [...] No Debt Plan describes his employer’s lackluster matching contributions to his 401(k) and ruminates heretically about discontinuing his 401(k) plan, spurring some very interesting comments about the merits and demerits of the Roth 401(k). And [...] [...] No Debt Plan describes his employer’s lackluster matching contributions to his 401(k) and ruminates heretically about discontinuing his 401(k) plan, spurring some very interesting comments about the merits and demerits of the Roth 401(k). And [...]

]]> By: Moments of fame « Funny about Moneyhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2993 Moments of fame « Funny about Money Thu, 14 Aug 2008 16:59:31 +0000 http://www.nodebtplan.net/?p=351#comment-2993 [...] Meanwhile, you’ve got to visit some of the excellent sites in this week’s carnival. I like Financial Reflection’s rumination on the actual cost of one’s car, mostly because it pretty much agrees with my opinion. And in the great minds in the same path department, GLBL brilliantly (IMHO) reviews the ten least-expensive-to-own vehicles and reveals that (lo!) nary a one is a hybrid. Not Made of Money explains how to decide what documents to spare from the shredder while you’re in declutter mode. Two bloggers raise questions about 401(k) plans: Generation X Finance explains how to tell whether your plan sucks, and No Debt Plan raises the possibility of discontinuing his 401(k). [...] [...] Meanwhile, you’ve got to visit some of the excellent sites in this week’s carnival. I like Financial Reflection’s rumination on the actual cost of one’s car, mostly because it pretty much agrees with my opinion. And in the great minds in the same path department, GLBL brilliantly (IMHO) reviews the ten least-expensive-to-own vehicles and reveals that (lo!) nary a one is a hybrid. Not Made of Money explains how to decide what documents to spare from the shredder while you’re in declutter mode. Two bloggers raise questions about 401(k) plans: Generation X Finance explains how to tell whether your plan sucks, and No Debt Plan raises the possibility of discontinuing his 401(k). [...]

]]> By: Moments of Fame « The Copyeditor’s Deskhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2792 Moments of Fame « The Copyeditor’s Desk Mon, 04 Aug 2008 16:46:31 +0000 http://www.nodebtplan.net/?p=351#comment-2792 [...] No Debt Plan describes his employer’s lackluster matching contributions to his 401(k) and ruminates heretically about discontinuing his 401(k) plan, spurring some very interesting comments about the merits and demerits of the Roth 401(k). And [...] [...] No Debt Plan describes his employer’s lackluster matching contributions to his 401(k) and ruminates heretically about discontinuing his 401(k) plan, spurring some very interesting comments about the merits and demerits of the Roth 401(k). And [...]

]]> By: Funny about Moneyhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2791 Funny about Money Mon, 04 Aug 2008 16:37:27 +0000 http://www.nodebtplan.net/?p=351#comment-2791 Tho' a flat tax strikes me as real unlikely and it's reasonable to expect taxes on long-term capital gains & dividends will rise, overall LivingAlmostLarge's arguments make sense. My tax lawyer remarked that it's better to have your savings out of IRAs and 401k's if at all possible. She does say that if your employer matches a 401k you should take it, but over the long run your heirs will get more of your estate and you will have far fewer hassles if your money is in nontax-deferred instruments. That's wot she says, anyway.... Tho’ a flat tax strikes me as real unlikely and it’s reasonable to expect taxes on long-term capital gains & dividends will rise, overall LivingAlmostLarge’s arguments make sense.

My tax lawyer remarked that it’s better to have your savings out of IRAs and 401k’s if at all possible. She does say that if your employer matches a 401k you should take it, but over the long run your heirs will get more of your estate and you will have far fewer hassles if your money is in nontax-deferred instruments. That’s wot she says, anyway….

]]> By: squawkfox » Carnival of Personal Finance: City Slickers Editionhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2787 squawkfox » Carnival of Personal Finance: City Slickers Edition Mon, 04 Aug 2008 11:28:22 +0000 http://www.nodebtplan.net/?p=351#comment-2787 [...] No Debt Plan may need a new retirement plan in Unthinkable: Should I Discontinue My Roth 401k Saving? [...] [...] No Debt Plan may need a new retirement plan in Unthinkable: Should I Discontinue My Roth 401k Saving? [...]

]]> By: 7-26 Carnivals and Roundup | LivingAlmostLargehttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2750 7-26 Carnivals and Roundup | LivingAlmostLarge Fri, 01 Aug 2008 14:54:47 +0000 http://www.nodebtplan.net/?p=351#comment-2750 [...] Kevin @ Nodebtplan tells he might be stopping his 401k plan… [...] [...] Kevin @ Nodebtplan tells he might be stopping his 401k plan… [...]

]]> By: Livingalmostlargehttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2741 Livingalmostlarge Thu, 31 Jul 2008 20:19:58 +0000 http://www.nodebtplan.net/?p=351#comment-2741 Here's the deal if you are in the tax bracket of 28% or higher (When a Roth IRA phases out) it's not necessarily true that you will be at that level in retirement. I've discussed this with multiple CPAs. As you hit 28% and higher, there is no guarantee you'll be there. What happens if we move to a flat rate tax 15% on everything? What happens if you decide in the future that you want to not work for 1 year and roll over your 401k to a Roth IRA? It might be taxed at 10 or 15% the year you aren't working. Don't forget that 28% you are locked into paying at least that or 33% or 38%. Thus tax implications are important. Also when you retire, if you pull the majority of the money out one year and pull out $60k that would put you in the 15% bracket versus the current 28% bracket. So it realy depends on what you earn. There is a reason why people who phase out Roth IRAs don't lobby to do it. Because they know they'll be able to shelter their money in more than a Roth IRA. Also it depends on where you live. Say you live in CA or NY, high state income taxes. Well why are you paying 12% in CA @ $150k income when you move to Florida, New Hampshire or even just anywhere with a lower state incom tax than those two places? When you draw on it, and pay in MA 5% versus 12%? or 0% versus 12%? That's a lot of income tax to make up. Plus you've cut your investment by 12% in the beginning. I have a post showing that people in CA making above $80k are paying 12% income tax state. Probably next week. In that case you betcha i'm sheltering all income in a 401k. Right now our 401k saves us about 30% - 33% on taxes. I'm not sure we're going to be paying that much in the future. Between taxable accounts in the future if it sticks to 15% long term capital gains only, and Roth IRA, I am betting that we can beat that. Warren Buffet only pays 15% federal income taxes because his money is from long term capital gains and dividends. Here’s the deal if you are in the tax bracket of 28% or higher (When a Roth IRA phases out) it’s not necessarily true that you will be at that level in retirement. I’ve discussed this with multiple CPAs. As you hit 28% and higher, there is no guarantee you’ll be there.

What happens if we move to a flat rate tax 15% on everything? What happens if you decide in the future that you want to not work for 1 year and roll over your 401k to a Roth IRA? It might be taxed at 10 or 15% the year you aren’t working.

Don’t forget that 28% you are locked into paying at least that or 33% or 38%. Thus tax implications are important. Also when you retire, if you pull the majority of the money out one year and pull out $60k that would put you in the 15% bracket versus the current 28% bracket. So it realy depends on what you earn. There is a reason why people who phase out Roth IRAs don’t lobby to do it. Because they know they’ll be able to shelter their money in more than a Roth IRA.

Also it depends on where you live. Say you live in CA or NY, high state income taxes. Well why are you paying 12% in CA @ $150k income when you move to Florida, New Hampshire or even just anywhere with a lower state incom tax than those two places?

When you draw on it, and pay in MA 5% versus 12%? or 0% versus 12%? That’s a lot of income tax to make up. Plus you’ve cut your investment by 12% in the beginning.

I have a post showing that people in CA making above $80k are paying 12% income tax state. Probably next week. In that case you betcha i’m sheltering all income in a 401k.

Right now our 401k saves us about 30% – 33% on taxes. I’m not sure we’re going to be paying that much in the future. Between taxable accounts in the future if it sticks to 15% long term capital gains only, and Roth IRA, I am betting that we can beat that.

Warren Buffet only pays 15% federal income taxes because his money is from long term capital gains and dividends.

]]> By: Kevinhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2740 Kevin Thu, 31 Jul 2008 19:55:47 +0000 http://www.nodebtplan.net/?p=351#comment-2740 @Living Almost Large: My belief is taxes are bound to go up. Getting a tax break now is nice, but I'm counting on us being in a higher tax bracket when we get toward retirement age. I'm more concerned with saving because at the end of the day you pay taxes on it -- today or tomorrow, you pay taxes. @Living Almost Large: My belief is taxes are bound to go up. Getting a tax break now is nice, but I’m counting on us being in a higher tax bracket when we get toward retirement age.

I’m more concerned with saving because at the end of the day you pay taxes on it — today or tomorrow, you pay taxes.

]]> By: Livingalmostlargehttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2739 Livingalmostlarge Thu, 31 Jul 2008 19:47:05 +0000 http://www.nodebtplan.net/?p=351#comment-2739 Are you sure it's even worth doing a Roth 401k? Why not a regular 401k? I've discussed this in depth on my blog and had a few posts about why it doesn't make sense likely over $150k income for married and $100k single. It really depends on where you live (state income taxes) and what you make. Assuming a Roth is always better isn't true. Are you sure it’s even worth doing a Roth 401k? Why not a regular 401k? I’ve discussed this in depth on my blog and had a few posts about why it doesn’t make sense likely over $150k income for married and $100k single.

It really depends on where you live (state income taxes) and what you make.

Assuming a Roth is always better isn’t true.

]]> By: Kevinhttp://www.nodebtplan.net/2008/07/31/unthinkable-should-i-discontinue-my-roth-401k-saving/#comment-2737 Kevin Thu, 31 Jul 2008 19:39:09 +0000 http://www.nodebtplan.net/?p=351#comment-2737 @Ashley, yes we are maxing out our IRAs with monthly contributions. I do like our IRA investment better, but as you know it is capped every year. @Ashley, yes we are maxing out our IRAs with monthly contributions. I do like our IRA investment better, but as you know it is capped every year.

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