Maxed the Roths for 2016

[sv2007]

This makes absolutely no sense, not unlike the majority of your posts.

You state that you don't think you are good at investing then you state you are naturally talented at it.

When you ramble the way that you do, you increase the risk of contradicting yourself. This is just one of many examples.

If I'm good at investing, I'd be having my people typing this reply to you. "Good" to me seems very different than "good" to you.

I do make better returns on my investments than SP500; feel free to dig around my past posts, I doubt I'd state my returns too far off course.

[StormRichards]

If a person likes 401k and cn't max it out, I see no reason to start an IRA (just put that money into 401k, unless he can't then that's a different case than my post above). If he likes IRA, then put it there before 401k.

In this case, you miss out on free money with the company match

[StormRichards]

If I'm good at investing, I'd be having my people typing this reply to you. "Good" to me seems very different than "good" to you.

I do make better returns on my investments than SP500; feel free to dig around my past posts, I doubt I'd state my returns too far off course.

So you are not good but you are naturally talented?

And although you don't consider yourself wealthy, despite retiring then going back to work out of boredom, you certainly have enough money to pay something to post things that make sense.

[sv2007]

In this case, you miss out on free money with the company match

Who am I to say what another likes?

The company match is just 1 thing to consider. There are many more. Maybe he can be a big fish in IRA vs 401k; maybe he changes jobs a lot, who cares. The important thing is concentrate enough money in accounts to make it into something reasonable.

The facts are very clear though... thru brokerage fee schedule... that concentrated money gets you better rates/service/everything. If i call my broker, i call a different line than smaller account-value customers. If I borrow on margin, I get lower rates. Lots and lots of reasons to not have tiny accounts.

[sv2007]

So you are not good but you are naturally talented?

And although you don't consider yourself wealthy, despite retiring then going back to work out of boredom, you certainly have enough money to pay something to post things that make sense.

If I didn't do as well as I did at investing my money, I wouldn't be able to do exactly what I did. Beating the SP500 means above average return (anybody can get near SP500 return) and takes a lot of practice. I think you might be very shocked by the amount of money we've lost, esp. in the early days of investing (it is higher than most people's net worth here).

Now, if I'm naturally talented, then I may not need to negotiate such a steep learning curve or trail/training by fire. But I'm not. BTW, I don't think there're many naturally talented people in this world; almost all of us are the same... only differentiated by how hard we work.

[StormRichards]

Who am I to say what another likes?

The company match is just 1 thing to consider. There are many more. Maybe he can be a big fish in IRA vs 401k; maybe he changes jobs a lot, who cares. The important thing is concentrate enough money in accounts to make it into something reasonable.

The facts are very clear though... thru brokerage fee schedule... that concentrated money gets you better rates/service/everything. If i call my broker, i call a different line than smaller account-value customers. If I borrow on margin, I get lower rates. Lots and lots of reasons to not have tiny accounts.

Huh. Again you are just babbling nonsense.

Suggesting anyone skip a 401k and free money to be a big fish in an IRA is just complete idiocy.

As for the better brokerage rates, I invest in no load index funds via direct deposit. I don't need a direct line to any broker. But I am happy you have someone to call when you want to use your natural talent.

[StormRichards]

If I didn't do as well as I did at investing my money, I wouldn't be able to do exactly what I did. Beating the SP500 means above average return (anybody can get near SP500 return) and takes a lot of practice. I think you might be very shocked by the amount of money we've lost, esp. in the early days of investing (it is higher than most people's net worth here).

Now, if I'm naturally talented, then I may not need to negotiate such a steep learning curve or trail/training by fire. But I'm not. BTW, I don't think there're many naturally talented people in this world; almost all of us are the same... only differentiated by how hard we work.

So you are neither good or naturally talented?

If that is the case, then you must not know how to use "former."

[bennkar]

Well, certainly all valid points.

My point is mainly to avoid spreading your money too thinly, and 401k vs IRA differences are too small to justify the very real disadvantages of keeping small amounts of money in separate accounts.

Just recently, on this forum, somebody asks what to do with his $2000 of 401k when he changes employment. Well, that's troublesome, because most 401k plans have a minimum amount requirement to keep the account when a person leaves. And $2k is (I'm pretty sure) too small for most (if not all). Not to mention the forced change in investment options.

If a person likes 401k and cn't max it out, I see no reason to start an IRA (just put that money into 401k, unless he can't then that's a different case than my post above). If he likes IRA, then put it there before 401k.

My only quibbles with this are three.

1) Its easy enough to roll money out of a 401k when leaving a job. I've done it with a small amount (Around $2,000 in my case). I just put it into a rollover IRA, then rolled it into another employer 401k later (most 401ks allow for rolling in like this). It was very easy to do.

2) Its rare that a 401k has everything you could want (low fees, good funds, Roth option, and so on). I have to admit when I thought it over now that my 457 plan does have everything I could want, and if I was a young employee not maxing it out that there would be no reason to setup a separate Roth IRA. But few people are in the position I am in, so I would stick with my point that diversification in retirement funding will benefit most people.

3) Yes if you don't know what you're doing, having a small amount in a Roth IRA can be counterproductive due to excess fees. But if you pay attention to the fee structures that shouldn't be a problem. When I started my Roth IRA I structured my account so I did almost no activity and caused almost no fees. Now if you're the churn and burn type.... then yeah, you should stick with a 401k and avoid IRAs. But that's just an education and temperament issue, not a strike against diversification.

[bennkar]

In this case, you miss out on free money with the company match

Just make sure to add the *if there is a match* qualifier. Where I work we have a pension, but no match on our retirement plan. I look at the pension as the "company match".

[StormRichards]

Just make sure to add the *if there is a match* qualifier. Where I work we have a pension, but no match on our retirement plan. I look at the pension as the "company match".

True. But I suspect that is becoming more and more rare. My company did away with pensions completely and launched a campaign to encourage 401k.

[GoodSteward]

True. But I suspect that is becoming more and more rare. My company did away with pensions completely and launched a campaign to encourage 401k.

401ks are replacing pensions all over. I personally just give up to the match on my 401k at the moment, and anything extra goes to an IRA. I'm still small beans compared to most of you because I started late with all of this. I've never had the option for a 401k until 6 months into this job I'm on now (little over 4 years) and I didn't start an IRA until well after that. I was one of those low earners for years and years on top of carrying a lot of debt. I'm playing catch up, albeit slowly right now. I'll pick up more steam next year.

[LivingAlmostLarge]

pensions will go more by the wayside was public/cities/government workers lose the option. I think it's pretty much gone in private companies.

[StormRichards]

pensions will go more by the wayside was public/cities/government workers lose the option. I think it's pretty much gone in private companies.

I think it was 4 or 5 years ago that my company got rid of pensions. Prior to that I was still big on contributing to my 401k, but losing the pension definitely caused me to increase my contribution percentage.

[LivingAlmostLarge]

I think that the US leaving behind pensions will cause a bigger income inequality than there is now. Before the average middle class worker had a secure retirement. With it going away I don't know what will happen.

DS I know you'll argue many people aren't covered by pensions, but I think that it wasn't until the 80s and 90s that most private pensions went away and mostly only public/government pensions are left. And those I can see also going away in the next 10 years.

[rennigade]

Before the average middle class worker had a secure retirement. With it going away I don't know what will happen.

The middle class worker will have to put money away. Instead of relying on someone else they'll have to rely on themselves.

The whole idea of pensions is a strange one. Glad I never had to deal with any of that stuff.