Bo really saved me at 29:57 with that rant. Particularly where he mentioned that it takes $583 a month to max out a Roth. I've been doing more than that for some time and I was about to go $200 over the limit next week. Paused the auto contribution, and will adjust it for next year! Thanks, Bo!
We live in the gray zone... maybe passing it soon, but since hitting the gray zone for a few years, we've used "years left to our planned retirement" to adjust the ratio into pre/post (maxing 2x 403b's and a 457 soon) which adjusts towards pretax every year (assuming income increases y2y). It's just pretax% = (40 - years to target)/40. Helps us sleep at night.
If LP has the ability to max out their 401(k) with Roth or Pre-tax contributions, they should absolutely do all Roth because those dollars are worth more, especially for someone in their early 30s. They will be paying taxes on tens (or hundreds) of thousands now vs on millions later. Their tax rate would have to be a quarter what it is now in the future just to roughly break even, and that's assuming they continue maxing out 401(k) every year until they retire. One exception would be if they were to invest the tax savings of funding the 401(k) with Pre-tax into an after-tax account (assuming they aren't married to someone who also has access to a 401(k) or additional Roth IRA).
Just because national taxes will go up doesn’t mean your personal taxes will be greater in retirement. You’ll want to compare your current taxes to what you’ll be paying in retirement, and for many people, they are living on a lower taxable income.
Social security and Medicare will need more taxes in 8 years. Billionaires and corporations won’t be paying more taxes to fund social security and medicare. Their corporate lobbyists will block it. Us peons will be paying more federal taxes to keep social security and Medicare afloat. Wait, they will raise fica taxes and keep our federal taxes the same 😂😂😂
My situation is very similar to yours, and I'm really curious if they convinced you to do all ROTH for the 401k or not? I'm in the gray zone at 27.8% marginal tax rate and still can't decide.
Hi! I had to change my contributions last Friday before seeing their answer to my question. I decided to do 5% pretax (with my 8% match it totals 13% pretax) and then 20% Roth which when I add my Roth IRA to that I’m heavily favoring Roth. My tax rate currently is below the gray zone, so my future strategy will be to adjust my pretax and Roth as needed to prevent me from going into the next tax bracket for as long as possible 😂
Guys I need some help, if I have already determined that pretax is the best use of my dollars do I skip step 5? I’m at a 33.3% marginal rate so I’m maxing out my pretax 401k. Leaves very little margin for Roth IRA contributions (2500) this year. Not eligible for HSA contributions. I’m at over 25% savings rate when taking into account my 10k/yr cash savings. (This is for a down payment, replenish emergency funds, future car buying etc.)and so that I’m not “retirement rich.” Am I out of order? Do I forgo the cash savings to max out my Roth? Am I justified in skipping the Roth because my marginal rate is so high?
I enjoy the Members Only jacket banter. It is funny that Brian has an affinity for it, as it was boomers who wore it when I was a kid. My dad had 3 or 4 of them, so I never thought they were cool, but I knew they were in style - literally for boomers. I never knew GenX'ers liked them too, since older generations wore them at the same time. I am sure he still has them in his closet or at least his storage, so I might have to just sell them on Depop or something lol.
Money Guy Show! I'm out of Denver, CO and love the show. This is the first year I maxed out my 401k (thank you for your help!). My income exceeds IRA Contribution Limits and I want to start leveraging the mega backdoor roth strategy. The concept is new, can you explain how it works, and what actionable steps I need to take (and on what frequency)?
Is the the only topic you guys talk about? I get it. I do. 401k is important. Can you consider some more diverse topics. Small business owner and investment options and how that scenario affects retirement? Or is the audience just too small for you to spend time there?
This topic was driven by a question that was asked by the audience. I’d bet that they’d be able to help with other topics of interest if you asked the question
They regularly cover audience questions about small business ownership and investment options. It is a small minority of people, but if you watch regularly, you see these topics covered quite often. Go through some of their old videos and you will find the examples. Or, just aske them yourself on one of their livestreams.
Bo really saved me at 29:57 with that rant. Particularly where he mentioned that it takes $583 a month to max out a Roth. I've been doing more than that for some time and I was about to go $200 over the limit next week. Paused the auto contribution, and will adjust it for next year! Thanks, Bo!
You guys are doing a real service to the people of our country. I hope your audience continues to grow. Thank you.
We live in the gray zone... maybe passing it soon, but since hitting the gray zone for a few years, we've used "years left to our planned retirement" to adjust the ratio into pre/post (maxing 2x 403b's and a 457 soon) which adjusts towards pretax every year (assuming income increases y2y).
It's just pretax% = (40 - years to target)/40. Helps us sleep at night.
Love Brian trying so hard not to laugh at “Foo Pa” @ 11:15
If LP has the ability to max out their 401(k) with Roth or Pre-tax contributions, they should absolutely do all Roth because those dollars are worth more, especially for someone in their early 30s. They will be paying taxes on tens (or hundreds) of thousands now vs on millions later. Their tax rate would have to be a quarter what it is now in the future just to roughly break even, and that's assuming they continue maxing out 401(k) every year until they retire. One exception would be if they were to invest the tax savings of funding the 401(k) with Pre-tax into an after-tax account (assuming they aren't married to someone who also has access to a 401(k) or additional Roth IRA).
I'm going 100% Roth for one reason, I think with the increasing national debt tax rates will increase over time.
Just because national taxes will go up doesn’t mean your personal taxes will be greater in retirement. You’ll want to compare your current taxes to what you’ll be paying in retirement, and for many people, they are living on a lower taxable income.
Social security and Medicare will need more taxes in 8 years. Billionaires and corporations won’t be paying more taxes to fund social security and medicare. Their corporate lobbyists will block it. Us peons will be paying more federal taxes to keep social security and Medicare afloat. Wait, they will raise fica taxes and keep our federal taxes the same 😂😂😂
Thanks for answering my question (LP) as part of the show! Threw it in a previous live and didn’t realize it would get picked up for content 😊
My situation is very similar to yours, and I'm really curious if they convinced you to do all ROTH for the 401k or not? I'm in the gray zone at 27.8% marginal tax rate and still can't decide.
Hi! I had to change my contributions last Friday before seeing their answer to my question. I decided to do 5% pretax (with my 8% match it totals 13% pretax) and then 20% Roth which when I add my Roth IRA to that I’m heavily favoring Roth. My tax rate currently is below the gray zone, so my future strategy will be to adjust my pretax and Roth as needed to prevent me from going into the next tax bracket for as long as possible 😂
Every money guy podcast I wonder: will Bo be excited about this?
Or will he be sooooooo excited.
You don't have to wonder long!
You needed to finish off with Go Georgia Bulldogs!!!
Foo Pa.. brian sure said that a lot 😂 idk we got it or what
Guys I need some help, if I have already determined that pretax is the best use of my dollars do I skip step 5? I’m at a 33.3% marginal rate so I’m maxing out my pretax 401k. Leaves very little margin for Roth IRA contributions (2500) this year. Not eligible for HSA contributions. I’m at over 25% savings rate when taking into account my 10k/yr cash savings. (This is for a down payment, replenish emergency funds, future car buying etc.)and so that I’m not “retirement rich.” Am I out of order? Do I forgo the cash savings to max out my Roth? Am I justified in skipping the Roth because my marginal rate is so high?
Step 7 is hyper accumulation (investing 25%.) Cash savings are not technically investments…
I enjoy the Members Only jacket banter. It is funny that Brian has an affinity for it, as it was boomers who wore it when I was a kid. My dad had 3 or 4 of them, so I never thought they were cool, but I knew they were in style - literally for boomers. I never knew GenX'ers liked them too, since older generations wore them at the same time. I am sure he still has them in his closet or at least his storage, so I might have to just sell them on Depop or something lol.
Gen X had them as well. I know I had a couple ;)
Money Guy Show! I'm out of Denver, CO and love the show. This is the first year I maxed out my 401k (thank you for your help!). My income exceeds IRA Contribution Limits and I want to start leveraging the mega backdoor roth strategy. The concept is new, can you explain how it works, and what actionable steps I need to take (and on what frequency)?
Hit 200k today. I'm really grateful for all the knowledge and nuggets you had thrown my way over the last months. Started with 14k in June 2022
I would really love to know how much work you did put in to get to this stage.
Nicole Flynn strategy has been instrumental in helping me navigate the past few months. Without it, I don't think I would have made it through
Wow! wow! please is there any way to reach her services?
Scam!
英꧁ᨖᨖᨖᨖᨖ࿅🇺🇸╋🇺🇸𝟏𝟑𝟎𝟐𝟑𝟕𝟕𝟔𝟒𝟓𝟔👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿👍🏿❤️❤️
大家都這樣“複製”，“UA-cam”令人沮喪
My company has unlimited 401K match up to 50% of what I put in. I.e. I put int 23k they put in 11.5k. How does that fit into the foo?
why are you lying?
If that is true, it is very obvious on the FOO. Free money is in step 2.
@@jeremybarton7903he’s not lying. My company does it as well. Big tech
Follow the FOO! Save 20 to 25%
Hey at least yall weren’t forced to wear toughskins…..
Does this mean paying down debt on a rental property can be counted as part of the 25% savings?
No
Is the the only topic you guys talk about? I get it. I do. 401k is important. Can you consider some more diverse topics. Small business owner and investment options and how that scenario affects retirement? Or is the audience just too small for you to spend time there?
This topic was driven by a question that was asked by the audience. I’d bet that they’d be able to help with other topics of interest if you asked the question
It's obviously not, but only a few people own their own business
They regularly cover audience questions about small business ownership and investment options. It is a small minority of people, but if you watch regularly, you see these topics covered quite often. Go through some of their old videos and you will find the examples. Or, just aske them yourself on one of their livestreams.
This was a live stream - feel free to add your questions for next time! The audience is 521k - not sure what your considering small
I like your guys videos….. but they are soooooooooo long
They just started a new shorter format and people have said they are great videos!
@ awesome I hope so. They have great information