Roth IRA rules sound great and are the benefits that come with them. Now do that over several decades and we all know what compound growth over decades does. However, I saw an article once where someone did the math and their conclusion was that it probably only makes sense to go for the Roth 401k if your salary is very low (early in your career) and/or you are anticipating having a high amount of taxable income (say, from a pension). We need to use bigger numbers to see a truer result. It’s eye-opening at how low taxes are right now, and I am betting it won’t last forever. Unfortunately, you don't have much money. Not to mention the massive potential benefits of doing Roth conversions in early retirement. There is no good reason to be stuck in a bad situation for decades. A Local Builder Builds His IRA – His Way . Tootie’s friend thought a Roth IRA was completely tax free. 7) After you agree to transfer funds, Fidelity will tell you this is a taxable event. It's really two things. I also have around $60,000 cash. 2021 - Amount of Roth IRA Contributions You Can Make for 2021; 2020 - Amount of Roth IRA Contributions You Can Make for 2020; Additional resources. Divorce actually helped me since my partner was part of the problem with finances. If you have 20yrs or more until retirement, you still have time to make mistakes and recover. You did not fail at FIRE. Chuck (the client is real, his name is not), has owned his own business for 25 years and heard about NuView IRA when he met NuView’s CEO, Glen, at a networking event. So, Roth IRAs are great. Here now the individual Effects of kingdom trust Bitcoin roth ira . (see podcast on what is Roth IRA). Therefore it's a win in my book. 235. video from Vanguard; Notes: It is almost never a good idea to make a non-deductible contribution to a traditional IRA without then doing a Roth conversion, as doing so would mean that your earnings would be taxed. More posts from the financialindependence community, Continue browsing in r/financialindependence. March 1, 2017. The primary goal of this site is to make you a successful investor in a quarter of the time it took me; thus you can retire with more money. Do yourself a favor and look at federal tax brackets in the USA for the past 100 years. There is also respite care which is free babysitting kinda, and other financial help no matter your income. That is because I am now in RMD territory and every year I have to take out money that I don't need and pay taxes on it. It is important to realize it's not just one thing. Your last sentence is the under-rated advantage of this strategy, and only applies if you are maxing all your tax-advantaged accounts and still have room to save in a brokerage account. After all, $19k of pre-tax dollars is less money saved in a tax-advantaged account than $19k of post-tax dollars. Edit: Wow, didn't think I would get this many responses! However, there is more to that when you actually achieve that 4% goal. All the rules about contributions apply to the first step … You saved the tax on $18k but now you have to pay taxes on $75k it grew into. We were on track for a long time, but then we had children with special needs. Because the rest goes into taxable accounts, and I like having options. With a mega backdoor Roth IRA, high-income people can contribute up to $37,000 to a Roth. If you have 20yrs or more until retirement, you still have time to make mistakes and recover. 0. It sounds like you're practically FI at this point. Once the account is set up, you can continue to make contributions just as you would to any other Roth IRA account, if your income allows. Purchase your target-year retirement stock (for me that would be FDEEX 2055) or FXAIX, which tracks the top 500 US companies. The beauty of Roth IRAs is they are not subject to the 7 1 / 2 minimum required distribution rules and the money grows tax-free. Financial Independence is closely related to the concept of Early Retirement/Retiring Early (RE) - quitting your job/career and pursuing other activities with your time. Jonathan Aschoff, of Roth Capital, is bullish on AzurRx, basing his longer-term forecasts on the probable success of MS1819. Roth IRA rules sound great and are the benefits that come with them. Fuck that! Keep in mind also that, once you're married, not only can she do that 401(k), she can also do a Roth IRA contribution for you and a Roth IRA contribution for her. She's only making $45,000 to $60,000 a year and you probably have that much just in tuition expenses every year. It's always nice hearing other people's struggles through their FI journey as a young person trying to get into this path. Roth IRAs are best when you think your taxes will be higher in retirement than they are right now. Maybe 18 year old me would be disappointed, but 40 year old me has mixed feelings. 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