Roth IRA vs 401(k)...where should You INVEST based on Your Salary Range

[@MatSorensen]

Get your Free Retirement Accounts Guide Here: matsorensen.com/retirement-accounts-a-complete-guide/

[@williamspach2322]

I was advised to diversify my portfolio among several assets such as stocks and bonds since they can protect my portfolio for retirement of about $170k. I need advice: Do I keep contributing to my portfolio in this unstable market or do I look into alternative sectors?

[@garnold-l5p]

The strategies are quite rigorous for the regular-joe. As a matter of fact, they are mostly successfully carried out by experts who have had a great deal of skillsets and knowledge to pull such trades off.

[@Mlanderos-t9e]

That is very correct. Having the right financial expert is invaluable. My portfolio is well matched for every season of the market and recently it has hit 80% rise from early last year. I and my CFP are aiming for a 6 figure ballpark goal.

[@Anessa-gibson]

Could you kindly elaborate on the advisor's background and qualifications?

[@Mlanderos-t9e]

Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Teresa L. Athas’’ for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.

[@Anessa-gibson]

I just looked up her website on google and I would say she really has an impressive background in investing. I have sent her an email hope she gets back to me soon. Thanks

[@DavidLucas-so8rr]

Diversification is the secret to optimal performance. This is why I have my interests set on market sectors based on performance and projected growth, such as stock, EV sector, renewable energy, Tech, and Health. Keep investing regularly and you'll be blown away how much it can change in a few short years. Here's to $1 million and to FIRE

[@Bako-b8j]

The strategies are tough for the everyday person. They are mainly executed successfully by professionals who have a considerable amount of skill and knowledge to execute such trades.

[@Bridget-l7p]

True. My portfolio was diversified across several markets with the help of a financial planner, and were able to achieve over a million in net profit among high dividend yield equities, ETFs, and bonds. It is vital that you have a variety of exposure, including in firms that are currently generating cash flows.

[@EthanBrown_23]

How can I engage in this? I truly want to have a stable financial future and am willing to contribute. Who is fueling your success?

[@Bridget-l7p]

“LAURELYN GROSS POHLMEIER ’’ is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.

[@RobertBrown..]

I appreciate the lead. I did some research on her and emailed her. I'm hoping she responds to me quickly.

[@tb1951]

1. 401k/roth 401k to get company match. 2. Max HSA if available to you 3. Then roth IRAs

[@warlockhaseo3642]

Does HSA makes sense? I have the option but I never found any value in it.

[@trisha8415]

@@warlockhaseo3642absolutely. Triple tax advantage since you can invest a significant portion of it each year. Pretax dollars fund it, it grows tax free, and qualifying medical expense deductions (which we will have at some point in life) are also untaxed.

[@climbhigher6813]

​@@warlockhaseo3642HSAs have triple tax advantage when contributing through your employer. You can also invest the money within your HSA (sometimes once you hit a certain balance). If you are a high earner, maxing contributions to an HSA and investing within it is an extremely solid strategy to pay for medical expenses throughout/later in life (while also reducing your tax burden).

[@gregvanommeren5660]

​@@warlockhaseo3642HSA is definitely worth doing. If you can pay for your current healthcare costs with cash and invest the funds in your HSA long-term (effectively treating it as a retirement account), it is triple tax advantaged (tax-free contributions, tax-free growth, tax-free withdrawal) if you use it for qualified medical expenses in retirement and to pay yourself back for any qualified medical expenses in your past (from the time of starting the HSA). If the account size grows larger than your qualified medical expenses in the past and in retirement, then you can basically treat the account as a Traditional IRA and you'll be taxed normally (without penalty) on any withdrawals that are not used for qualified medical expenses.

[@oldscratch3535]

@@warlockhaseo3642 It does make sense, unless you plan to never get old or never have any medical care costs. Its a pre-tax account that lets you invest and the investment growth is tax free. Any withdrawals are tax free as long as you use them on qualified medical expenses. If you take money before you’re 65 from your HSA for non-medical costs, or medical costs that don’t qualify, you’ll have to pay the federal income tax and a 20% tax penalty. If you take funds from your HSA after you’re 65 for non-medical costs, you won’t have to pay the 20% tax penalty, but you’ll still have to pay the federal income tax on that amount. Its money that can lower your tax burden right now, while also giving you tax free investment growth to be used for your inevitable medical expenses in the future. And after 65 you can use the money for whatever you want. You'll just owe the federal income tax. Most states don't tax HSA withdrawals at all. I'd recommend using one if you have access to it.

[@hejiranyc]

I'm in the 35% (almost 37%) tax bracket and plan to retire in 2.5 years. I'm totally staying with a standard 401(k) vs. a Roth 401(k) since I expect to stay below the 22-24% tax bracket in retirement.

[@senseiturtle]

Smart move. There comes a crossover point where you really need to cut as much taxable income as possible. You could always do backdoor roths in addition, since we aren't really limited to only one source of income in retirement

[@hejiranyc]

@@senseiturtle No, backdoor Roths are a bad idea if you already have a sizeable pre-tax IRA since that will trigger paying income taxes on a portion of the IRA. My one big regret is that I opened an IRA in the first place; I should have just rolled over from 401(k) to 401(k).

[@davidscott7682]

The best years to be moving pre-tax funds to post tax is between your retirement and RMD age. I continue to work part-time at age 66 but direct all of my income to 401K along with a 25% employer contribution. I will actually have part of my standard deduction left to fill and the 10% & 12% brackets if I choose to use both. This also allows me to delay SS payments and increase those payments by 8% / year.

[@cortez9978]

I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement in 3 years.

[@FrankHaubrich-mt6gw]

consider financial advisory so you don’t keep switching it up... those sound like great picks anyways, not bad for 350k

[@StephenTho42]

Agreed, I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has 5X in barely 5 years, summing up nearly $1m as of today.

[@mette-lo]

@@StephenTho42 this is huge! would you mind revealing info of your advisor here please? in dire need of portfolio rebalancing

[@StephenTho42]

I take guidance from a Montana-based advisor ''Katherine Nance Dietz'' To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.

[@M.Herlihy]

thanks for putting this out, curiously inputted Katherine Nance Dietz on the web, spotted her consulting page and was able to schedule a call session, she actually shows a great deal of expertise.

[@soothingrelaxationandmedit68]

I would avoid the index funds, mutual funds, or specific stocks for the time being. The 5% fixed incomes are the safest bet for now. Save your cash for when the market actually shows sign of recovery

[@soothingrelaxationandmedit68]

It's essential to conduct thorough research, consider the long-term outlook of the companies, and diversify your investments to manage risk effectively.

[@Deitricklaverne]

Honestly this cannot be overemphasized, helping people mitigate unforseen circumstances and mistakes .It's always good to have a financial plan,

[@Deitricklaverne]

Consulting with a financial advisor can provide personalized insights and help align your investment strategy with your retirement goals.

[@camela8445Mar]

the strategies are quite rigorous for the regular-Joe. As a matter of fact, they are mostly successfully carried out by pros who have had a great deal of skills and knowledge

[@camela8445Mar]

Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my accounts. Strategically taking profits just before the market correction, I'm now seizing buying opportunities once again.

[@YinusaSaheed]

Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.

[@TylerMohn-g9l]

The strategies are tough for average people. They're usually done well by experts with lots of skills and knowledge.

[@LiamOlivia-4]

@@TylerMohn-g9l I agree. From my own experience with an investment advisor, I've got $1 million in a diverse portfolio that's growing fast. It's not just about having money for stocks; you need to know your stuff, stay determined, and be resilient.

[@zubairadamu2477]

@@LiamOlivia-4 Mind if I ask you to recommend this particular coach you using their service?

[@LiamOlivia-4]

VICTORIA CARMEN SANTAELLA is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@FernandoBowen-78]

@@LiamOlivia-4 Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon....

[@Countstep0099]

The upcoming end-of-year stock market rally, along with the current one, has me pumped. I’ve been working double shifts and continuously buying more shares and Bitcoin. I’m grateful as my portfolio has grown by $300k so far this year.

[@Resmith18S]

investors like you should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder.

[@LemonTwistSmiles]

Agreed, investing with the aid of an advisor set me up for life. Retired with $1.6m in stock portfolio only. I max out my 401k and have few properties. I worked hard everyday as a teacher for 32 years, and my pay was over 100k annually, enough to get me fully invested.

[@jonathanxxxx876]

wow!! this is impressive.. how can i reach this advisor if you don't mind me asking?

[@LemonTwistSmiles]

Sure i don't mind. I've stuck with ‘’Sophia Irene Powell ” for years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.

[@user-567-ut]

Thanks for the lead. I just searched Sophia by her full name and easily spotted her page, very professional..

[@bradleygraves5915]

Those $200k folks are hitting the limit where there is no pre-tax advantage. Aka: you won't see the deduction on your 1040. Once I learned this, I only dump funds into ROTH accounts at work. Then I still play the personal IRA game for a little extra.

[@JustSomeRandomGuyYo]

There is no income limit for the tax deduction in a 401k. Traditional vs Roth is simply the effective rate of your contribution (usually your marginal rate, could be different if the contribution causes you to cross borders of the brackets) vs the effective rate of your distribution. If you make 200k and contribute 23k, you avoid 24% of the full contribution. In retirement if you pull out 200k, your effective rate is 18.77%. Not to mention there is also state tax arbitration that can happen. For example you work in CA and retire in FL, you can straight up avoid and additional 10% state on top of that 5% fed savings for a total of 15% better than Roth.

[@gingerkilkus]

Retirement is now more difficult than it was in the past. I've been saving for a long time instead of investing, and right now I only have about $200K. considering all the inflation, i'm thinking of investing in stocks, i dont just have idea on market strategies.

[@AlfredWilliams-ki6ri]

Do you plan on retiring before 59?

[@Franklin-gq4si]

That is what determines it for me. I switched to cash flowing assets because I wanted to retire early.

[@williamDonaldson432]

At a point like this, when the pressure is already on you to retire, its best recommended you seek the services of an adviser, as this allows you make smarter investing decisions.

[@foreverlaura-fq4eu]

@@williamDonaldson432 this is huge! would you mind revealing info of your advisor here please? in dire need of portfolio rebalancing

[@Bellaelena549]

this is huge! would you mind revealing info of your advisor here please? in dire need of portfolio rebalancing

[@lindsayinthemountains]

This was helpful. Great breakdown!

[@MatSorensen]

Of course! Thank You for watching.

[@Pony341]

The answer is both

[@MatSorensen]

Not a bad answer either!

[@Aboite81]

Facts!

[@EtherBunny-z7k]

My breakdown is backdoor roth in a lump sum every January, 401k until maxed out to get the match and tax deduction, HSA until maxed out, then back to 401k but contributing to the mega backdoor Roth. The timing of it all varies year to year depending on how much overtime I work and when I hit my maximum contributions -it’s not super complicated, just something to keep an eye on mid-year.

[@jorgel1887]

Great video. Very well explained. Thanks!

[@camcommute]

wish there was a solo option for those whose employer offer a terrible plan

[@LastSider]

7:00 At the moment, Im matching my company Traditional 401k(before tax) then putting 10%(after tax) on my Roth IRA. Just as you explained, companies 401k is quite (I think) expensive.

[@PS5820-wv7kk]

Great video, easy to follow. Thanks for all the information you're willing to share with the world.

[@MatSorensen]

Thank You for watching!

[@patrickhenandez]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[@Lourd-Bab]

Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks

[@patrickhenandez]

@@Lourd-Bab However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.

[@Lourd-Bab]

@@patrickhenandez Oh please I’d love that. Thanks!.

[@patrickhenandez]

@@Lourd-Bab Clementina Abate Russo is her name.

[@patrickhenandez]

Lookup with her name on the webpage.

[@389293912]

There's a big unfairness in the system. Many companies offer a 401k, but only if the company doesn't have a retirement plan. However, when I worked for a government job I had TWO 401k type tax shelters, a 403b and a 457b PLUS a retirement plan provided by the university. Oh, and I made the same salary as I did in the private sector so that tired old, "government employees get paid less" isnt true anymore.

[@YongPark-g3h]

I couldn't decide so I just max out to IRS limit on 401k, Roth IRA, and HSA.

[@toyarj37]

Same I will have a million in a 401k just maxing out s&p

[@nickpatrick4376]

People on these channels always skip over vesting period. It’s assuming the employee remains with the company more than five years, that is increasingly difficult.

[@alexgrinage]

You assumed that theres a vasting period than assumed more that it was 5 years

[@nickpatrick4376]

@@alexgrinage very true. I’m also assuming that more companies have a vesting period than don’t, and that it’s on average five years. I also assume many companies match 1% or 0% for their employees.

[@climbhigher6813]

Please correct me if I am wrong, but from what I see, vesting periods for retirement accounts (match) aren't as common as they used to be.

[@alexgrinage]

@nickpatrick4376 well you're assumption is wrong. it's 3-5 because it's getting shorter. And match average is 4-6%

[@nickpatrick4376]

@@alexgrinage well then I will keep that in mind from now on when I get another one of these offers with 1% or less match for 401K.

[@ambercraig7252]

Started with a new company. They match up to 4% on 401k or roth IRA. $55000 a yr so only going to max out the match. Which should I choose?

[@MikeSanJuan-x1u]

Isn’t there an income limit for Roth IRA? So if one is making $200k, they may no longer be eligible for Roth IRA contributions?

[@alrocky]

Q1 Yes Q2 At $200k ineligible for *_direct_* contribution to Roth IRA however a backdoor Roth option is available - contribute $7k to traditional IRA and then convert that $7k t-IRA to $7k Roth IRA.

[@toyarj37]

No income limit for Roth 401k on Roth IRA

[@turner111971]

I've been splitting it for years...same percentage in pretax 401k and roth 401k? Comments on this?

[@alrocky]

Are you making less than $47k (12% Federal Tax bracket)? If in 22/24% FTB and expect to be in 32% or higher FTB, do Roth 401(k) now.

[@NurseHODL]

If someone drives Uber for a living, what’s the best 401k account for them?

[@Porcelynnn]

IRAs & SEP

[@389293912]

The ROTH is critical. If you invest wisely your winnings are tax free. Normal IRA you get the initial tax benefit but you have to pay taxes on your winnings when you draw on them. Also, at least at my broker, I cannot borrow from my IRA.

[@johnburnett1974]

I have a traditional 401k and a Roth 401k. Is there a strategy after the match from employer. Plus would I need a separate Roth IRA ?

[@tamarraj]

Both 401ks combined have a max of $23000 (not including catch up if you’re eligible). So after employer match how you choose to max it out depends on your personal situation. Traditional lets you bring down your taxable earned income. Roth allows you to make tax free earnings forever. If you roll any of it over you should put them in their respective IRAs unless you want to convert the trad401k to a Roth. In which case you can do 1 Roth IRA. You cannot rollover a Roth 401k into a traditional IRA. After you’ve 401k matched, and maximized the 401k, max out your HSA (if you have one), and then your IRA

[@Murphy-lu8jr]

Things appear strange right now. The value of the US dollar is declining due to inflation, but it is increasing in comparison to other currencies and commodities such as gold and real estate. People are flocking to the dollar because they believe it is safer. I'm worried that rising inflation will cause my retirement funds to lose value. What else could we do with our money?

[@Christopherken-l4b]

Personally, I would say have a mentor. Not sure where you will get an experienced one, but if your knowledge of the market is limited, it seems like a good bet.

[@ClaraStephen-u7k]

Yes to be honest, investing is a smart way of securing your family future, grow wealth and beat inflation

[@Ravindra-v9k]

It is true, inflation has taught people the important of multiplying income.

[@Williams-n4l]

You're right. to successful on investment. Having an investment advisor is the best way to go about the stock market right now. I was going solo, but it wasn't working. I've been in touch with an advisor for a while now, and just last year, I made over 80% capital growth minus dividends.

[@FaithLouis-gq7vd]

Please can you leave the info of your Investment advsor here? I'm in dire need for one.

[@xmochix604]

Great video!

[@apichadarunyothin2446]

My current strategy for the past 6 years has been maxing out traditional 401k and HSA to reduce my MAGI and then max out Roth IRA every year. If i do Roth 401k , i will not be able to max out contribution to Roth IRA , perhaps no contribution at all due to income limits. So in my case , total contribution for Roth 401k is just $23,000 but if i do traditional 401k , my total contribution will be $30,000 ($23,000 for 401k + $7,000 for Roth IRA) Do you think the traditional 401k + Roth IRA look better for investment in my case?

[@alrocky]

$23,000 traditional 401(k) + $7,000 Roth IRA is good default option. "Roth IRA, perhaps no contribution at all due to income limits." $145k (S MAGI) Roth IRA starts to phase out which is 22% Federal Tax bracket. If you don't expect to reach 32% FTB t-401(k) + Roth IRA appears better for you.

[@JustSomeRandomGuyYo]

There is the back door Roth IRA where you make a non deductible contribution to a traditional IRA and convert it to Roth immediately and then file tax form 8606. This becomes complicated if you already have pre-tax $ in a traditional IRA because you would be subject to pro-rata rules.

[@DanReynolds-qj2wv]

Thank you for your honesty and transparency. It's refreshing to see someone acknowledging the harsh reality of rising prices, which are leaving many of us feeling battered and bruised. Despite the dip in the market I stil thank you for level headed financial advice. I start investment with $3000 and since following Jace Nicole Parker for few weeks now I've gotten $5000 in my portfolio.

[@SchindlerNelson]

Recession are unavailable part of the economic cycle, all you can do is prepared for them and plan accordingly

[@Kathy-q1d]

I'm a newbie in investment, can you guide me on how did it?

[@MatthewScott-o1f]

This dedication to continuous learning is inspiring,,managed to grow a nest egg of around $20k in Bitcoin to a decent $76k...

[@FredGeorge-y2h]

I keep loosing selling off dip because of the market condition, am scared of holding now, how can I achieve this level of success

[@JamesKennedy-t9b]

My portfolio has been going down the drain while I try on my own, I just don't know what to do,is there anyway I can reach your financial advisor?

[@simoxeh]

Traditional IRA will save you more money if in retirement the total money gain from the traditional IRA is under $279,000 that's because you will get the discount on your pay now but you would also get the standard deductible so you would pay no taxes on it. This is based on the thought of living 20 years after retirement. Honestly you would take the number of years you plan to live and multiply it by the standard deduction and if you expect your traditional IRA to provide more money than that then you would be better off with a Roth. That is why usually traditional IRAs are only done once someone is in their forties or fifties since it makes more sense than because you're at your possible highest income and the amount of money you're going to get from the traditional IRA won't be more than the standard deductible each year.

[@BrisklyConveyance]

I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation

[@Portalfield11]

Safest approach i feel to tackle it is to diversify investments. By spreading investments across different asset classes, like bonds, real estate, and international stocks, they can reduce the impact of a market meltdown

[@JaguarLandRover-]

No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q4 2024.

[@StephanieWilliam-ex6yt]

@@JaguarLandRover- Please can you leave the info of your lnvestment advsor here? I’m in dire need for one

[@JaguarLandRover-]

@@StephanieWilliam-ex6yt Celia Kathleen Martel is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.

[@StephanieWilliam-ex6yt]

@@JaguarLandRover- I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.

[@jasonbroom7147]

401k with match beats Roth, Roth beats Traditional, Traditional beats nothing at all. Not sure how your work that into a 16-minute video. You do NOT get a "tax deduction" on a traditional IRA or 401(k) account! You get tax DEFERRAL, and there's a huge difference. You will pay taxes on that money, eventually. The only question you need to ask yourself is, do you want to pay taxes on what you put into an investment account, or do you want to pay taxes on the growth of equity in that account? ROTH RULES!

[@JustSomeRandomGuyYo]

If you replace your usable income and tax brackets don't change, Traditional beats Roth every time. You avoid your marginal rate and pay an effective rate. If you make 100k, you avoid the 22% fed tax on contributions (ex, 20% or 20k) and if you withdraw 100k in retirement you pay an effective rate of 13.84%. And since you are not contributing in retirement to retirement we can withdraw 100k minus our contribution (80k), which has an effective rate of 11.80%. 22% - 11.8% = 10.2%. Taxes would have to go up a lot to overcome that 10% difference. Not to mention state tax arbitrage on top of that. An extreme example would be working in CA and retiring in FL, you would avoid CA's marginal state tax (9.3%) and pay 0% in FL.

[@jasonbroom7147]

@@JustSomeRandomGuyYo - It's not the taxes going up that is a problem, it's how much growth your accounts are likely to see, over time. Do you want to pay taxes on the contributions or the compounded returns? The answer is strongly in favor of the latter, unless your returns were horrible or your time invested wasn't long enough.

[@JustSomeRandomGuyYo]

@@jasonbroom7147 The rate of return doesn't matter assuming you retire once you hit your number and your number produces income equal or lower than what you were making when working (could be a little higher and still come out ahead because of the arbitrage but at some point Roth would have been better. IDK about you but I'm done working once I can replace my income). If you make 100k and contribute 15k (15%) to traditional vs 11,700k (15k * (1 - .22)) to Roth your after tax (Fed & FICA {assuming w-2}) income is $66,393.50 (We will use FL 0% state tax for simplicity since state taxes vary wildly from one state to another). If we do that for 35 years at 7% (10% growth minus 3% inflation) we get: $1,617,371.48 in Roth vs $2,073,553.18 in Trad 4% of $1,617,371.48 = $64,694 with no taxes taken. 4% of $2,073,553.18 = $82,942.13 with taxes taken, fed effective rate on $82,942.13 is 12.16% so our after tax is $72,856.37 (FICA doesn't apply to trad withdrawals or any other ordinary income like pension or HYSA interest etc, only earned income) IDK about you but I would rather have the extra $8,162.37. As I said previously, taxes would have to go up a lot in order for that $82,942.13 Gross to be less than $64,694 after taxes.

[@owenzmortgage8273]

15mins to read a article

[@tinindian7816]

He likes complicating things too much