What % of household income do you save for retirement?

[Redbull3]

when talking % is  this pre tax or after tax of income?

Let's go with pre

[skyguy918]

Thank you! Good stuff to know. I thought you needed a reason like first time home purchase. Didn't realize the principal for anything thing.

That's a traditional Roth. Just to clarify a few things for this thread:

A 401k is generally set-up/administered by/through your employer, whereas an IRA is something you yourself have to set up (for example, through your brokerage).

Roth means your contributions are post-tax (ie you're paying your taxes when you make contributions), whereas Traditional (or sometimes just omitting the Roth designation) means your contributions are pre-tax (ie you're paying your taxes when you take money out).

These terms can combine to 4 different account types:
https://en.wikipedia.org/wiki/Comparison_of_401(k)_and_IRA_accounts

@Redbull, see that chart for treatment of various types of withdrawals under each account type.

[Redbull3]

That's a traditional Roth. Just to clarify a few things for this thread:

A 401k is generally set-up/administered by/through your employer, whereas an IRA is something you yourself have to set up (for example, through your brokerage).

Roth means your contributions are post-tax (ie you're paying your taxes when you make contributions), whereas Traditional (or sometimes just omitting the Roth designation) means your contributions are pre-tax (ie you're paying your taxes when you take money out).

These terms can combine to 4 different account types:
https://en.wikipedia.org/wiki/Comparison_of_401(k)_and_IRA_accounts

@Redbull, see that chart for treatment of various types of withdrawals under each account type.

Yep - I knew the basics (your first few paragraphs) but not the allowed withdrawal stuff.

[dealfinder85]

does anyone use an HSA as savings tool?

[skyguy918]

does anyone use an HSA as savings tool?

Just googled it. Very cool idea. Though it sounds like you need to be in an eligible plan to have an HSA in the first place.

[EJB]

does anyone use an HSA as savings tool?

Sure, you just can't contribute that much too it. I definitely recommend contributing the max you can each year if your plan has decent investment options and doesn't impose high monthly fees.

[dealfinder85]

Just googled it. Very cool idea. Though it sounds like you need to be in an eligible plan to have an HSA in the first place.

I am

[12HRS]

Sure you can, but you'll have to pay taxes on the basis that you're rolling over.

wouldn't that be double taxation? once when it goes into roth 401k and once when moved to a roth ira?

[skyguy918]

wouldn't that be double taxation? once when it goes into roth 401k and once when moved to a roth ira?

In a (traditional) 401k, contributions are pre-tax.

ETA: Now I see I read that initial comment wrong, going back to correct.

[skyguy918]

Sure you can, but you'll have to pay taxes on the basis that you're rolling over.

I believe withdrawing the principal with no penalty fee free is only for a Roth IRA, not a Roth 401K. However, you should be able to roll a Roth 401K into a Roth IRA and then you can withdraw the principal.

Sorry, too late to edit my original, so I'm just re-quoting.

You are correct, I misread your post as comparing Roth and Traditional. A Roth 401k not only has the penalty as you mentioned, it also doesn't allow any early (ie prior to 59.5) withdrawals while you're still employed with the company that you have the 401k with.

[alpicone]

I max out my 401k (90% traditional and 10% Roth) and HSA. Been doing about $5k-$10k into my wife's Solo 401k every year.

Maybe I will put a little more  into my Wife's 401k as a tuition hedge (@Henche)

[12HRS]

today i learned that tuition committees will take all your savings before giving a discount