Why the ROTH IRA is the KING of all investments (in 2min.)
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- Опубліковано 12 вер 2024
- ROTH IRA is the best investment account on the planet and will save you hundreds of thousands of dollars in tax-free gains! Best retirement account ROTH IRA for long term investing. Retirement planning needs to include the king of all investment accounts which is the ROTH IRA.
#rothira #etfinvesting #retirementplanning
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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.
consider financial advisory so you don’t keep switching it up... those sound like great picks anyways, not bad for 350k
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.
@@Heyamanda-Cooper this is huge! would you mind revealing info of your advisor here please? i really need to get my portfolio balanced
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 it turned out great
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.
Man, with inflation eating away at my savings, I'm worried about retirement. I barely have enough left over after bills to sock anything away.
I hear you. That's why I love my Roth IRA. Contributions come out of your paycheck after taxes, but then you grow your money tax-free!
Sounds too good to be true. What's the catch?
The catch is you can't touch the contributions without penalty until you're 59 ½, but that forces you to save! It's like free money growing in a magic tax-free bubble.
That sounds interesting, Daniel. But with the market being so volatile, I'm worried about investing right now.
That's why talking to a CFP is key. Mine, Aaron Morgan Bell, is a real wiz. He helped me weather the storm in 2008 and come out stronger.
I’m 21 have 28k in my Roth schd , qqqm and voo is what I’m rocking with
Good to hear im not the only young man putting in the work.
19yo. Also annually Maxing out my ROTH IRA.
Brokerage, I love ULTY and IWMY. Riskier then SCHD, but profitable.
@@JTL1776 cool man I’ve never heard of those I’ll have to check them out
Great job!
I always tell young individuals to invest early. Of course, many don't listen, but I hope they'll think of me one day when they realize I wasn't wrong. I tell them to buy some gold too, and that's when they really don't listen. 😂 But to each his own.
Add SOXL & TQQQ
@ProfessorG.
Can you do a video on Strategy for investing and maxing out THE Big 3.
1 ROTH IRA.
2 SOLO ROTH 401K.
3 HSA.
I'm 19. Small Buisness Owner and an Insurance Representative close to becoming a Financial Representative.
So I can afford to MAX OUT ALL 3. But a video on what has been best in the past and likely will be in the future would be amazing.
With a 3% Match from Robinhood on my ROTH IRA.
And a 1% Match on my brokerage.
Thanks to Robinhood Gold.
I am the senate no wait thats wrong.
I AM THE BANK.
I'm interested in this as well.
@@blew3749
People that are young and work smart and hard like me can achieve so much between 18 and 25. Retire early prior to 30's.
Max out the 2 best systems for retirement after 59 1/2. And max out HSA not just health but enjoy Massages and other Therapies like Oxygen and CRYO.
Combine with 3 systems for FIRE.
1, 60K in a Brokerage 30K in ULTY and 30K in IWMY.
$4,000 Passiv income.
2, Starting a 100K T-Bill
And 100K CD Ladder.
3. Invest in Local and County Municipal Bonds. Not simply Make money on existing money.
helping to reduce stress of roads never being fixed and general bad infrastructure.
Need to take into consideration company matches on 401K and that you can only contribute a lot more every year on 401K vs. Roth.... (about 3x more on 401K vs. Roth)
Hi professor G, Great explanation clarification of how a traditional Roth vs a Roth works. This is greatly appreciated
I threw down $2034 into my first time with Roth IRA. Planning on maxing it out. Hope it’s worth it
Thanks for the video.
Great video Professor G!
Thank you!
Your example using a company 401K has one major flaw and that is the matching that comes with investing in a company 401K. So for example you contribute 10% of your salary and say the company matches with 8, 9 or 10% now compare that with the Roth. Your example does work if you compare the Roth IRA to a traditional IRA.
Many companies do not match. For those that do, I definitely recommend getting that match!
@@NolanGouveiarobinhood matches 3% on ROTH IRA.
#Gold-Mine.
Recent change… “SECURE Act 2.0, which passed in December 2022, allowed employers for the first time to match Roth 401(k) contributions directly into a Roth account.” So matches are also Roth dollars.
@@CWO-Jthe govt allows it but that doesnt mean an employer has to do it. As far as I know, I still cant change my employer match to roth 401k, but ill have to look at my account again.
@@justwait9822 industry is slow to adapt.
keep pumping out those financial informational videos Professor G!!!!
Will do!
@NolanGouveia how long do you think the dollar will last?
Second best. HSA is king, as long as you also benefit from having a High Deductabke Health Plan. HSA, as you know, contributions tax free. Growth, tax free. Withdrawls, tax free!
Don’t the withdrawals need to be used for qualified medical expenses?
@@pete5691yup
@@pete5691 Yes, but the list of qualified expenses is very lengthy. For me, the HSA was used as a retirement vehicle, and I have never taken a withdrawl yet. They can also be used for medicare premiums after 65 years of age.
You can withdraw after 65 for non medical without penalty but still has income tax. Before 65 you get hit with a 20% penalty on top of income tax for non qualified med expense.
@@jdgolf499 Oh the medicare premium idea is great! I have regular deductible plan however.
Hi, I am an avid follower of your great insights on investments. I wanted to get your opinion on Backdoor Roth IRA.
What if I start a Roth IRA when my salary is $100,000 but after several years the salary rises above the $160,000 limit? I can no longer contribute?
You can then do the “back door Roth conversion”
What happens in states that have estate taxes? Roth IRA keeps growing, but when the owner passes, the tax bill will also be large. How to avoid this problem?
Thanks!
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@@NolanGouveia I've got 5yrs at least to work and no Roth IRA. Do I still start one now?
Good morning from Texas! IPPON 🥋
Question:
Could you put out a video for an alternative to a ROTH IRA? Thus, those we are ineligible for a ROTH….
I still struggle with this...In the 2nd example, wouldn't the principal contribution be lower since it's post-tax money? So you wouldn't really be putting in $500 every month like you would with traditional.
From what I can tell, assuming tax rates are the same now and when you withdraw at retirement, you wind up with the same amount. So I think it's really about what you expect to be taxed on in retirement.
Except at higher income levels. Are you in a higher income tax bracket now or when you will retire??
Back door Roth conversion!
William Roth & Bob Packwood; were forward thinkers back in 1989. Let’s hope Fed govt doesn’t change the rules!
Fed govt isn't touching ROTH. That's career suicide.
It’s ok, the government is aware most people won’t invest or at the very least just won’t be able to swing it. I think it’s safe
If I fund Roth IRA with full 7k. Is it smart to go ahead push the entire 7k to my 3 etf's or spend specific amount each day/week until the 7k is fully invested?
It doesn’t really make a huge difference
Or if your employers program allows Roth, or after tax contributions to your 401k, while it will not lower your taxable income, you will not owe taxes on this money when you take it out when you reach retirement age.
Very true!
The true king is the Roth 401k… if it’s available. At 50 you can put like 30k per year in…
You can roll over your Roth 401k into a Roth IRA as well.
I try to put what I can into roth 401k (my employer contribution can only go into regular 401k). But I still prefer the roth ira just because you have a lot more options in what you invest in. Again this is employer dependent.
How does this work exactly? I hear with a Roth solo 401k you can put $66,500 a year. How would I get that amount into my Roth IRA? I wish Professor G would do a video on this. Other ones on UA-cam are confusing.
@@blew3749 Annual Elective Deferral is $23k for 2024 for 401k, this what you can contribute from your typical income. The annual additions limit $69k which is the total amount of all the contributions you make in a calendar year. This limit is per employer and includes money from all sources. Employee contributions (tax-deferred, after-tax, and tax-exempt), Agency/Service Automatic Contributions, and Agency/Service Matching Contributions. It does not include catch-up contributions. The annual additions limit affects mostly members of the uniformed services who can exceed the annual elective deferral limit from combat pay, etc. The excess contributions go into the traditional portion of your account from tax-exempt pay earned in a combat zone.
And that is why a 401/403b or Ira is smoke and mirrors. It’s the worst of all 3 routine investments ( ROTH/Taxabke brokerage/ Ira) you haven’t mentioned that you loss the lower capital gains tax rate of the IRA vs a regular brokerage account . The only exception is a company match with the 401k that is essentially free money.
Excellent video Brother
If you make too much you can’t do roth ira. The backdoor roth is a hassle it seems?
Can I pull money from my 401k in monthly pulls ? and pay taxes on what I use ?
You can yes after age 59.5
You don’t need to touch it at all if you don’t want to until 73 or so when your RMD kicks in. You only pay taxes on what you pull out yearly. You could also convert your 401 to Roth so much yearly and just pay taxes on what you convert.
Does non-american citizens/residents with working visas/ssn can open an IRA?
Roth is just one of two ways I’ll become a millionaire
Looking for starting etfs for my Roth portfolio any suggestions?
What is the brokerage account to do our investment(Robinhood or Fidelity or anything else)?
Does having a roth account affect yearly gross as well or can i offset it by putting the same amount in a 401K but in the Roth
If you put $ in a Roth, it does not bring down your gross income
💯💯
The only thing potentially better is the HSA, never taxed at all.
Depending on the state, yes!
Can u roll ur 401 into a Roth?
Don’t you get a “tax credit” for making contributions to your Roth IRA? There’s definitely a question on the tax documents for this… So even though it’s “after tax” contribution, there is a “tax benefit” I believe… Can somebody clarify this???
I just looked it up. There is a saver's tax credit you can claim but the income requirement is really low. Its like 38k for single income, 57k for head of household, 76k for joint filers.
Can you get a wash sale on a Roth IRA if you sell at a loss and buy back same security within 30 days but don’t buy same security in any other account?
No. Positions sold for loss or gain in an IRA trigger no taxable event, selling at a loss is just a loss, no tax loss harvesting. Wash selling also doesn’t apply. Only thing reportable for taxes is contributions and deductions to the account.
Your audience is not only American just so you inow post content for other places as well like groth stock stable with no dividend for country that pay dividends tax but no capital gains tax
Is a thrift plan any good? That’s what we have at my job
The TSP has a Roth option with index funds (C fund aka. S&P500), so in addition to the 2024 Roth IRA contribution of $7k, you can add up to $23k in the Roth TSP. After you leave service you can roll the Roth TSP dollars into your Roth IRA. All Roth dollars!
Wow, thanks for breaking that down. I had no idea how my retirement plan worked.
@@dreamquotes Gladly. there are 5 core fund options. All index based. C fund for large cap exposure and S fund for mid/small cap. Between the 2 funds you capture a US total stock market. 80% C/ 20% S Or go all C fund. I’m not a fan of the target date funds as there is a bit too much I fund (international) for my taste and F and G funds (bonds) make it too conservative if your young with a long investment horizon. G fund is like an ultra short treasury fund guaranteed to beat inflation (it’s currently yielding a bit over 4% annually.) it has its place in a retirement portfolio closer to retirement. I personally will roll my TSP over into my IRA.
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I hate it when people call an "account" an "investment." Investments are held in accounts.