Hes just saying (poorly) that when you have all that money at 63 and you go to make a purchase every single time you do youll endure higher taxes at all areas of finance; an early withdrawal can outweigh the deficit caused by potential tax hikes… the actual withdrawal itself may be tax free but then you need to use that money in a world 13+ years from now when every single tax that exists will likely be higher
You’re completely right, the sad thing is assholes like this have the morons believing everything they say. To the point where they make millions off of them
What happens if they increase the tax rate to 85% by the time you reach age 63? Plus, zero chance you outperform inflation and I can guarantee you have not idea what you’re paying in fees. 401k’s are sneaky government honey pots. As Grant said, “I feel bad for you bro.”
No. Company 401ks are an absolute SCAM 😂 much better options out there. But 100% is better than most. But inflation eats it up vs the percentage it gains every year
I reached retirement a few years ago and I’m 71 now. It dawned on me this year to start taking some out each year before I pass away. I’m debt free and can’t think of anything I need. “Money is only important if you don’t have it.” Invest while you are young.
I wish someone like you could help me give basic needs to children and elderly where I'm from. My mom recently passed she was forced to start taking money out of her retirement account or the government would take a certain amount from her if she didn't. ❤
Roth conversion ladder. 401k> trad Ira roll over > convert x amount (under 43k as of 2024) and pay minimal taxes assuming you are retired and have no or little income> wait 5 years> withdraw paying little to no taxes
Tax rates will be lower when you retire because your 401k withdrawals will replace your salary, not add to your salary. Also, it is tax deductible when you contribute and it grows tax free while in the 401k.
401k isn’t the best. But it’s the best option for most people. Most people don’t have the knowledge or discipline to multiply their money. Having a 401k is better than not putting away money and having nothing at 63.
Your annual income will be zero when 65 and you retire dropping your tax rate down to the lowest tax bracket. Assuming you don't withdraw 100s of thousands from the 401k each year to, you'd barely touch the 22% tax bracket, you'd need to withdraw 578k to reach the top tax bracket. 99% of people are better off with just traditional tax deferred 401k. And shouldn't even worry about the taxes that they'll pay later.
This makes the most sense. People don’t have a lot of retirement saved. And when they retire, they will be at the lower tax bracket. Roth makes sense if you start in your early 20’s and allow compound growth at your best years to take advantage of this account
Worrying bout paying higher taxes ...when wishing on taking it out earlier, if did so would lost on alot of compound interest+growth LoL... Terrible advice....
This is assuming that you have no other sources of income when you retire. If you include rental income, brokerage/ money market account interest, short term capital gains, pensions, side job income, social security etc. You can hit the 22-24% tax bracket pretty quick. There for almost 1/4 of your 401k is taxed. Alot of time it make sense to do roth conversion now, plus tax rates are at its lowest its been for a long time.
@@metallica10028 that doesn’t apply to this because the funds are in a 401k being invested, therefore keeping up with inflation. We are on the topic of 401k distributions being taxed.
Roth 401k would be the way to go for most people. You invest after tax income inside the Roth account, invest it in mostly index stock funds (if you are in your 20s/30s) and watch the money compound tax free, as well as withdrawals after legal age of retirement, are tax-free. If your employer offers this type of retirement plan, at least invest an amount up to what your employer matches as that is "free" money. However, if you can afford it, you should try and max out your annual contributions.
The counter argument is the 20-30% in tax free growth people are missing out on each year. Why pay taxes now if you can grow your money faster contributing more. The baseline 5-10% growth each yr. Is missed. In my case I've monitored my 401k funds carefully. This past month my 1 yr performance is around 28-32% recently.
Maybe in your 20s. But paying maximum tax on your last dollar in your highest earning years when you are funding college education, purchasing a house, ... instead of only what you withdraw years later seems short sighted. It is simply a question of what is the tax on the last dollars earned or withdrawn. And god help you if you went Roth and retire in another country that still taxes your withdraws.
" if your employer offers this type of retirement plan". This plan is part of your total pay package.. you are getting less in your pay every check for 40 years with tons of restrictions on the money.. forget all these government plans . Take the increased money in your check every week instead of these government plans. When you are retired you will be paying more in taxes on these funds
@@Gamerz00760Growth doesn't matter when considering roth vs pre-tax. The only thing that matters is tax rate now vs tax rate in the future. If you don't believe me then do the calculations yourself for the various scenarios.
I DO AGREE WITH GRANT… but lets also be real. The rich and elite are a different breed. They have not only a wealth of mistakes they have learned from but also have a NO FEAR approach in life. Most people are not like this and their best best is exactly the 401k because the alternative which is scary are most people spend their money mindlessly. There Grant you have to understand that.
I did the math on this. The employer match in a 401k makes up for the taxes I will pay when I withdraw each year in retirement. I will have a bigger account value and much higher after-tax distribution annual income from my 401k due to the employer match than i would have if i contributed after tax dollars into a roth for the same amount of years.
Actually you can never do the exact math on stocks. Your money and your employers money is put into stock plans.Depending on how they do or how the economy is at the time you could get more or less.
It more than covers any taxes. If you have a 4% match from your company equaling $300 a month, your company is putting in $300 a month for a total of $600
@@shotakazehaya-l3vthat’s true but you also have control over which funds you choose. You can slowly shift your port from a high percentage of stock/mutual funds to a lower amount as you get close to when you might start touching the money
Roth IRA are tax and penalty free after 59 1/2. That’s both contributions and earned investments. However you can withdraw the contributions part and not the earnings at anytime without penalties or taxes because you already paid the taxes so long as you made sure to file that 8606.
401K is better because you will have 30% more money to invest that can now compound and grow exponentially. Plus when you take it out, you will have less taxes to pay on it(contrary to what is said in the video).
Yeah but taxes is gonna increase each year. Currently it's 8% on everything now if you have a business and stuff you are making money at an older age you will be at a higher tax bracket
Yes a Roth 401k is better in every way. And while they both act the same, the difference is that an employer cannot contribute to your Roth IRA compared to a Roth 401k. It also has a (currently) $23k limit compared to the $7k limit of a Roth IRA contribution limit.
A Roth 401k is not better in every way. What financial expertise or licensure do you have that backs up that statement? I'll give you 3 reasons why a Roth is not better than, or is equivalent to a non-Roth 401k 1. Investing in a traditional vs Roth 401k allows you to save a higher percentage of your income because it reduces your current tax liability, and the power of compounding gains equals or outweighs the taxes you won't have to pay on Roth distributions 2. If you have student loans and are enrolled in a income-based payment program, non-Roth 401k contributions reduces your AGI, which lowers your payment 3. Your tax rate may be lower in retirement than during your working years as your overall marginal tax rate may be lower with a lower retirement income.
an IRA is not bad for a safety net when you get older. I would always focus on other investments and cash flows as your primary source - but having an IRA is a great hedge for financial security in old age.
Yes, I have a large 401(k) and it is a mess. We have to pay incredible taxes. It is a joke of an investment that IRS fucks us. He is absolutely right in this situation.
So what? You get compound growth for 30 years on money that you normally would have paid to the government. I fully expect to draw less in retirement than what i make, so I will be in a lower bracket. Otherwise just do a Roth and pay taxes now...but somewhere along the line you're paying taxes.
It would put you in a very high tax bracket that one year. When you retire and have no income you can pull it out as your sole income and be in a lower tax bracket. And ensure you max out the Roth
You aren't supposed to take it all out at once. Supposed to take out a bit each year. If you take out the standard deduction amount each year, zero taxes.
For the traditional 401k you defer taxes on your contributions and gains and pay the taxes when you withdraw. For a 401k Roth you pay taxes upfront on your contributions and you pay no taxes on your gains.
It’s worse than just using a taxable account. As everything comes out getting hit with income tax instead of capital gains tax. And as low as you buy stocks that have no dividends there are no taxes at all already to just hold the investment in a taxable account. Benefit is that you get capital gains tax when you sell later on.
What he’s saying is when you eventually pull out the money and put it into an investment at 63, the taxes attached to the investment would be higher. So effectively he’s advising that you don’t let the tax incentive of the growth prevent you from investing in the present. The only problem here is that not everybody has a big chunk of money for a downpayment at the present in order to make the investment in the present. Most people are right to invest in their retirement because it’s a small part of your earned income.
I increase my savings by 52% without a 401k plan... That's the importance of financial education now i seen somebody increase there's by 3,200% in one day now i only have 10 months of learning so i have a lot more to learn but I'm going to get it....i thank God for the stock market
That statement is nuanced. Using your 401k deductions also put you in a lower tax bracket. So instead of paying 28-36% you can get bumped down to 22% as a married couple. Odds are at retirement age as you withdraw you are going to be doing so at a lower tax bracket.
@@chad3558 The very first thing they tell you when you consider a 401K is how the taxes work. Even in your 20's genius. And the age of the apparent idiot being educated in this video was in his 40s. So Lol to the guy who thinks he gets everything, but understands nothing.
After tax dollars, the growth is tax free. Best account most people should focus on investing in heavily. If jobs offer 401Ks with a match (2%-6%+), get that free money and only invest up to match. Rest of your money you can spare, put into ROTH is the move.
Grant means you're paying taxes when you spend the money, and in 30 years the money you're paying in sales taxes is much more than the equivalent today due to higher taxes and inflation
@@HouseOfBrr regular 401k you pay your taxes when you retire. Roth you pay your standard income tax on your contributions the moment you are paid/file your income taxes. You may not pay taxes on it when you retire but you do pay taxes on your contributions while you’re contributing
You only pay taxes on the amount that you pull out as if it were income. So if you pull out 70k per year, then you only pay taxes on 70k that year. So if you're making 140k today, without putting into your 401k you are absolutely paying more in taxes because your AGI is 140k instead of the 117k that it could be by maxing out your 401k contribution.
Close.... That $70k you pull out is counted as earned income. So, it's really $70k + your regular income = the amount you'll be taxed on. In many cases, this will put you in a higher tax bracket, which means you're paying way more in taxes than what people are anticipating.
That’s y I have all Roth accounts. Roth IRA, wife’s 401k has Roth options, my 457 has Roth options. Paid the taxes going and have tax free growth for 25 years
My company just takes approx $300 bi-weekly from me and puts it into our pension (possibly a defined pension plan or DPP) where they send us quarterly reports of what I will retire with at age 55 or 60 or 65. The maximum money I would get. The minimum. The survivors benefit to my wife or family, etc… I also max out my CPP and CPP2 every year (Canadian pension plan). Also, I’m considering throwing some money into RRSP’s (registered retirement savings plan) as I’d get a tax break as well. However, I’m not certain on the rrsp as I’d like to live frivolously now and don’t need to be extremely wealthy when I retire. Thoughts? - Canada, Ontario.
I gasped. Vlad… bro… wtf 😂 you pay taxes on withdraw not deposit in a 401k. It’s the least advantaged account. Grant is right even though I hate that guy
right, cause per grant the most productive thing you can do for society is own all the homes. fuck being a doctor or engineer and working for what you have and making something productive for the world, just be a land owner.
Well if the 401k was a roth he would be alright. But clearly its not. No thanks to the organization that he is working for. Most employers don't offer the roth.
Grant is correct. 401(k) is a tax-deferred account meaning you pay no taxes now while your money grows but you will pay taxes when you withdraw the money between ages 59 1/2 - 72 years. If you withdraw before age 59 1/2 you will also be penalized in addition to paying taxes. If you withdraw after average 72 you will be penalized as well. My company is doing 8.5 % match to my 5 % for my 401(k). I’m 54 and I would love to “retire” now so I can rollover that money into an annuity, a safer investment option. I’m praying my 401 (k) keeps performing well.
Grant is correct. The best thing for you to do with that money that you put in your 401(k) is to buy a a second property.. by the time you’re 63 that property is going to be worth probably three times what it’s worth and so is the rental income and so is your profitability. And guess what you don’t have to pay taxes because of all the tax write offs on the house like depreciation, etc. the best tax write offs you can get is real estate. I’m doing that now. 401(k)s suck.
I feel like it’s smart to have money in a 401K, but not as your only or main source of retirement savings. In Canada I recommend maxing out a TFSA ($10k) annually, and setting it up where it’s invested into an ETF with dividends reinvested.
I'm in the transportation division of Phillips 66, and they match dollar for dollar up to 6%, and at the end of the year, they give you an additional check for 6% of your gross for what you made that year, it goes also to your retirement. It's a win with certain companies. In our pipeline and midstream facilities division shoot, they get 8% match dollar for dollar. Almost unheard of.
Both partially wrong. 1-age is 59.5 to be able to draw penalty free not 63. 2- Tax free is a "Pause" from a young age to allow more money to compiund intrest and grow until you are 59.5. 3- at 59.5 you pay tax just like income as you withdraw but at a larger tax rate than when you earned the money over the years. 4- a retirement account is a forced savings. Something people without this forced savings would spend all or most of their money and be broke at retirement age and won't be able to retire, ever!.
I live in Canada and my brother-in-law had an RRSP ( equivalent to the 401k) he retired at 65 and at 70 he wanted to put a new roof on his little barn and went to withdraw $10k. Got $6.5k.
Well, I guess that's one way of looking at it. I do somewhat agree with what he's saying. However, most employers offer a match program. If I don't opt to join the 401k program, I'm leaving money on the table
That's why it's the best decision to do Roth. You pay the taxes now then withdraw tax free at retirement. Because yes, taxes will more than likely be higher when you retire.
He’s wrong. The money grows tax free and when you withdraw it it’s taxed as income. So you don’t pay taxes on the money when you invest it and it grows tax free. If you use a Roth then it grows completely tax free.
And that’s why I only max out my Roth and don’t put into a traditional IRA. I live and enjoy my life along the way with what I need to be comfortable at the end. I don’t need to be rich
The difference is employee match, not having to worry about putting a crap ton in. Bro when I’m 63 I’m taking it all out and living on that the rest of my life. Bro is just mad he wasted 40 years not doing it so he makes other people feel miserable for doing a good deed upon themselves. Roth all the way
It’s taxed as income if you don’t contribute to the 401k. If you are in a higher tax bracket now then you will be in retirement (which is true for a lot of people because you are no longer being paid from your employer) it makes sense to contribute to a tax deferred account like a 401k and delay the taxes. Not to mention you receive a match and compounding interest on the pre tax contributions.
The kicker with 401 k is not only is tax deferred but with better companies that have matching component, and often it is stock which is like gold mine.
It’s charged as income tax upon withdrawal. I generally say if you can get a roth401k do it otherwise take the companies match and use other vehicles for investing.
When you are born, your parents are taxed on the medical bills. As you grow up, they are taxed on the things they buy for you. When you finish school and go to college you are taxed on the supplies, books, and loans. When you graduate, you are taxed on the food you buy while you find a job. When you get that job, your employer is taxed for their business, as well as your check. When you use that money, you are taxed for the sales. When you want to buy a house, you're taxed on the payments. While you make those payments, you're taxed just for having your name on the property, aside from the payments entirely. When you get insurance for that property, you are taxed on the payments. When you're old enough to retire, you are taxed on what you take out. Remember, folks: No matter what, Uncle Sam gets his cut.
Every time a single dollar changes hands, a percentage of that dollar makes its way to the government as tax because that dollar as it changes hands represents a purchase or a sale which is taxable. Thousands of people pay tax on that single dollar as it circulates from business to business. Just something to think about.
Grant wants us to withdraw our 401k and invest it into his course 😂😂
Hes just saying (poorly) that when you have all that money at 63 and you go to make a purchase every single time you do youll endure higher taxes at all areas of finance; an early withdrawal can outweigh the deficit caused by potential tax hikes… the actual withdrawal itself may be tax free but then you need to use that money in a world 13+ years from now when every single tax that exists will likely be higher
He wants you to put it into an annuity like a smart person would do and avoid RMDs
401k Roth better way to go. Thats 100% tax free in the end
Not Roth bro bro. Tax. Freee.
You’re completely right, the sad thing is assholes like this have the morons believing everything they say. To the point where they make millions off of them
It doesn’t matter where you put your money, the government will find a way to take it.
Wrong
Bitcoin has entered the chat
@@MFG2738
Bitcoin is 10000% controlled by rhe government.
🍊🪙
IUL
My company matches 100% what I put in up to 5% so that's what I do. That objectively is a good investment.
Matching, best investment ever. U r l😮cky
My company matches 10%
Taxes on it will be 35% not worth it
What happens if they increase the tax rate to 85% by the time you reach age 63? Plus, zero chance you outperform inflation and I can guarantee you have not idea what you’re paying in fees.
401k’s are sneaky government honey pots. As Grant said, “I feel bad for you bro.”
No. Company 401ks are an absolute SCAM 😂 much better options out there. But 100% is better than most. But inflation eats it up vs the percentage it gains every year
I reached retirement a few years ago and I’m 71 now. It dawned on me this year to start taking some out each year before I pass away. I’m debt free and can’t think of anything I need. “Money is only important if you don’t have it.” Invest while you are young.
I wish someone like you could help me give basic needs to children and elderly where I'm from. My mom recently passed she was forced to start taking money out of her retirement account or the government would take a certain amount from her if she didn't. ❤
Kind of agree. Invest but balance with living life now because soon you'll be 71 and nearly ready to pass away.
Start a charity or give it away!
Don't give these vultures your money
Spot on!
Roth conversion ladder. 401k> trad Ira roll over > convert x amount (under 43k as of 2024) and pay minimal taxes assuming you are retired and have no or little income> wait 5 years> withdraw paying little to no taxes
Tax rates will be lower when you retire because your 401k withdrawals will replace your salary, not add to your salary. Also, it is tax deductible when you contribute and it grows tax free while in the 401k.
You hit the nail on the head my friend. People need to get debt free & live within their means.
401k isn’t the best. But it’s the best option for most people. Most people don’t have the knowledge or discipline to multiply their money. Having a 401k is better than not putting away money and having nothing at 63.
Well said. It's good for most.
It's okay but I think it's better than nothing on the other hand it's best to place it underneath your mattress😂
Exactly
Anyone can go to vanguard and open a private brokerage account.
Whats the best way to invest than 401k and IRA?
Grant:
“900k in your 401k? You’re broke my man! You need to cash out now and invest in Cardone Capitol “
Your annual income will be zero when 65 and you retire dropping your tax rate down to the lowest tax bracket. Assuming you don't withdraw 100s of thousands from the 401k each year to, you'd barely touch the 22% tax bracket, you'd need to withdraw 578k to reach the top tax bracket. 99% of people are better off with just traditional tax deferred 401k. And shouldn't even worry about the taxes that they'll pay later.
This makes the most sense. People don’t have a lot of retirement saved. And when they retire, they will be at the lower tax bracket. Roth makes sense if you start in your early 20’s and allow compound growth at your best years to take advantage of this account
Worrying bout paying higher taxes ...when wishing on taking it out earlier, if did so would lost on alot of compound interest+growth LoL... Terrible advice....
This is assuming that you have no other sources of income when you retire. If you include rental income, brokerage/ money market account interest, short term capital gains, pensions, side job income, social security etc. You can hit the 22-24% tax bracket pretty quick. There for almost 1/4 of your 401k is taxed. Alot of time it make sense to do roth conversion now, plus tax rates are at its lowest its been for a long time.
It’s not just the taxes. The buying power of 1 dollar will be less. 1 dollar will not buy you a Mcchicken at McDonalds like it used too.
@@metallica10028 that doesn’t apply to this because the funds are in a 401k being invested, therefore keeping up with inflation. We are on the topic of 401k distributions being taxed.
Grant: " Just buy my course dude! "
Roth 401k would be the way to go for most people. You invest after tax income inside the Roth account, invest it in mostly index stock funds (if you are in your 20s/30s) and watch the money compound tax free, as well as withdrawals after legal age of retirement, are tax-free. If your employer offers this type of retirement plan, at least invest an amount up to what your employer matches as that is "free" money. However, if you can afford it, you should try and max out your annual contributions.
Yup. Roth is 100% the way to go
The counter argument is the 20-30% in tax free growth people are missing out on each year. Why pay taxes now if you can grow your money faster contributing more. The baseline 5-10% growth each yr. Is missed.
In my case I've monitored my 401k funds carefully. This past month my 1 yr performance is around 28-32% recently.
Maybe in your 20s. But paying maximum tax on your last dollar in your highest earning years when you are funding college education, purchasing a house, ... instead of only what you withdraw years later seems short sighted. It is simply a question of what is the tax on the last dollars earned or withdrawn. And god help you if you went Roth and retire in another country that still taxes your withdraws.
" if your employer offers this type of retirement plan". This plan is part of your total pay package.. you are getting less in your pay every check for 40 years with tons of restrictions on the money.. forget all these government plans . Take the increased money in your check every week instead of these government plans. When you are retired you will be paying more in taxes on these funds
@@Gamerz00760Growth doesn't matter when considering roth vs pre-tax. The only thing that matters is tax rate now vs tax rate in the future. If you don't believe me then do the calculations yourself for the various scenarios.
Message!! They also make you pay taxes on your social security check. Unbelievable
That is dependent on how much your total income is at that time. If all you have is SS payments, you are not taxed.
What’s crazy that money was already taxed from our check when we were working smh !!
“Giggle …:what’s wrong with you ???” Vlad needed that shhht!!!
I DO AGREE WITH GRANT… but lets also be real. The rich and elite are a different breed. They have not only a wealth of mistakes they have learned from but also have a NO FEAR approach in life. Most people are not like this and their best best is exactly the 401k because the alternative which is scary are most people spend their money mindlessly. There Grant you have to understand that.
I don't think either of them really understand how a Roth 401k works 😂
😂
They’re talking about a traditional 401 not a Roth 401
He was talking about a 401k… not a Roth IRA
@@curlygirl9023a lot of employers have Roth 401ks now too. That’s what we do so it has the same benefits as a Roth IRA
@ the point is…. You will not have to pay anything when it matters the most.
It’s a good way to have money reserved for the future. The compounding and appreciation is what to bank on
I did the math on this. The employer match in a 401k makes up for the taxes I will pay when I withdraw each year in retirement. I will have a bigger account value and much higher after-tax distribution annual income from my 401k due to the employer match than i would have if i contributed after tax dollars into a roth for the same amount of years.
you use the match and convert it to a roth with no penalty.
Actually you can never do the exact math on stocks. Your money and your employers money is put into stock plans.Depending on how they do or how the economy is at the time you could get more or less.
It more than covers any taxes. If you have a 4% match from your company equaling $300 a month, your company is putting in $300 a month for a total of $600
@@shotakazehaya-l3vthat’s true but you also have control over which funds you choose. You can slowly shift your port from a high percentage of stock/mutual funds to a lower amount as you get close to when you might start touching the money
don't they force you to make your RMDs at 73 you must sell 5% out of your account every year.
The rich forget normal people don't keep making lots of money after retiring. The expectation is your tax bracket will be lower when you retire.
Roth IRA are tax and penalty free after 59 1/2. That’s both contributions and earned investments. However you can withdraw the contributions part and not the earnings at anytime without penalties or taxes because you already paid the taxes so long as you made sure to file that 8606.
401K is better because you will have 30% more money to invest that can now compound and grow exponentially. Plus when you take it out, you will have less taxes to pay on it(contrary to what is said in the video).
Yeah but taxes is gonna increase each year. Currently it's 8% on everything now if you have a business and stuff you are making money at an older age you will be at a higher tax bracket
Yes a Roth 401k is better in every way. And while they both act the same, the difference is that an employer cannot contribute to your Roth IRA compared to a Roth 401k. It also has a (currently) $23k limit compared to the $7k limit of a Roth IRA contribution limit.
For Roth 401k, it's 59.5 and the roth account has to be open for atleast 5 years.
A Roth 401k is not better in every way. What financial expertise or licensure do you have that backs up that statement? I'll give you 3 reasons why a Roth is not better than, or is equivalent to a non-Roth 401k
1. Investing in a traditional vs Roth 401k allows you to save a higher percentage of your income because it reduces your current tax liability, and the power of compounding gains equals or outweighs the taxes you won't have to pay on Roth distributions
2. If you have student loans and are enrolled in a income-based payment program, non-Roth 401k contributions reduces your AGI, which lowers your payment
3. Your tax rate may be lower in retirement than during your working years as your overall marginal tax rate may be lower with a lower retirement income.
an IRA is not bad for a safety net when you get older. I would always focus on other investments and cash flows as your primary source - but having an IRA is a great hedge for financial security in old age.
Thanks for sharing XAI97K and SUI. 💯
SOL memecoins is where the real heat is
Ain’t nobody wanna look into yo bullshit
Yes, I have a large 401(k) and it is a mess. We have to pay incredible taxes. It is a joke of an investment that IRS fucks us. He is absolutely right in this situation.
What is your rate of withdrawal? It's meant to replace your income, not take it out all at once once you are eligible to take disbursements.
The guy is right with his first statement.
It is a way to put money IN without paying taxes. Just cant take it out without taxation 😅
So what? You get compound growth for 30 years on money that you normally would have paid to the government. I fully expect to draw less in retirement than what i make, so I will be in a lower bracket. Otherwise just do a Roth and pay taxes now...but somewhere along the line you're paying taxes.
It would put you in a very high tax bracket that one year. When you retire and have no income you can pull it out as your sole income and be in a lower tax bracket. And ensure you max out the Roth
@@penguin12902how much will you have? Because there are minimum distributions so you may be required to take more than you want.
You aren't supposed to take it all out at once. Supposed to take out a bit each year. If you take out the standard deduction amount each year, zero taxes.
So true! They get you one way or another
Or both.
Your video convinced me to invest in XAI97K, expecting 10x gains. Excited for listings!
undervalued project
Much better than all those shits altcoin with no utilities
It is funny that not everyone knows about XAI
XAI will atleast beat LINK
I am so bullish right now
401ks are great because your company will match your investment usually.
"Grant I'm paying my taxes." LMFAO 🤣🤣
Knowing the difference between traditional and Roth would be handy
For the traditional 401k you defer taxes on your contributions and gains and pay the taxes when you withdraw. For a 401k Roth you pay taxes upfront on your contributions and you pay no taxes on your gains.
It’s worse than just using a taxable account. As everything comes out getting hit with income tax instead of capital gains tax. And as low as you buy stocks that have no dividends there are no taxes at all already to just hold the investment in a taxable account. Benefit is that you get capital gains tax when you sell later on.
I don't always agree with Grant, but on this, Grant is spot on! Unfortunately, the masses agree with the other gentleman!
You can’t put brains in a statue uncle G !! 😂
We just witnessed a billionaire that didn’t know 401 was tax free
What he’s saying is when you eventually pull out the money and put it into an investment at 63, the taxes attached to the investment would be higher. So effectively he’s advising that you don’t let the tax incentive of the growth prevent you from investing in the present. The only problem here is that not everybody has a big chunk of money for a downpayment at the present in order to make the investment in the present. Most people are right to invest in their retirement because it’s a small part of your earned income.
That’s the sell. Grant wants people to take the money they have in their 401K to invest in his syndication
I increase my savings by 52% without a 401k plan... That's the importance of financial education now i seen somebody increase there's by 3,200% in one day now i only have 10 months of learning so i have a lot more to learn but I'm going to get it....i thank God for the stock market
Bet you Vlad rolling in a brand new Whip. He cashed out on his 401k 😂
Giving Grant Cardone financial advice is wild
He wants everyone to live in a apartment take what he says with a grain of salt
Corrrct he is in the business of taking away homes from Gen z. Grant laughs at you not being able to buy a house
@@pbonbrisco do you have a house?
I’m sure Grant is fabulously wealthy but he clearly doesn’t understand how these accounts work. Then again, neither does the guy he’s taking to.
Listening to Grant Cardone’s advice unironically is wild.
Let's hope you reach that age and are able to enjoy your money. Most old folks don't exactly know how to spend money like when its in the now
Facts I lost thousands when I withdrew mine after i retired from my job. What they gave me broke me practically even.
That makes no sense. Tax is a %, there is no way withdrawing from retirement breaks even, even if you withdrew it early you only pay 10% extra.
@ I got back what I paid in.. in my case ( each person case is different) I withdraw mine early I’m 52. So I penalty fees and taxes.
He’s correct!! It’s simple tax strategy…
That statement is nuanced. Using your 401k deductions also put you in a lower tax bracket. So instead of paying 28-36% you can get bumped down to 22% as a married couple. Odds are at retirement age as you withdraw you are going to be doing so at a lower tax bracket.
Really thought he could outsmart Grant 😂
That’s crazy he didn’t kno he’s gonna have to pay taxes on withdrawals. That means millions of people also don’t kno that.
right, because YT videos are never staged. I would bet less than 1% of people over the age of 40 who have a 401K account don't know that.
The only people paying taxes are traditional. You also have to consider rmds.
@@DaveB-w2iLol yeah hey everyone start your 401k’s when you’re 40 and not when you’re in your 20’s
@@chad3558 The very first thing they tell you when you consider a 401K is how the taxes work. Even in your 20's genius. And the age of the apparent idiot being educated in this video was in his 40s. So Lol to the guy who thinks he gets everything, but understands nothing.
Is it the same with roth?
Yes I always say this we may not pay now but we sure will pay later 🤦🏽♀️🤦🏽♀️🤦🏽♀️
Roth 401(k) is completely tax-free.
After tax dollars, the growth is tax free. Best account most people should focus on investing in heavily. If jobs offer 401Ks with a match (2%-6%+), get that free money and only invest up to match. Rest of your money you can spare, put into ROTH is the move.
No it’s not you literally pay your regular income taxes on that money
@@arijanramku9126on traditional, not Roth as he specified
Grant means you're paying taxes when you spend the money, and in 30 years the money you're paying in sales taxes is much more than the equivalent today due to higher taxes and inflation
@@HouseOfBrr regular 401k you pay your taxes when you retire. Roth you pay your standard income tax on your contributions the moment you are paid/file your income taxes. You may not pay taxes on it when you retire but you do pay taxes on your contributions while you’re contributing
“Scammer” is written all over his face.
All this is true, and logic, thank you
It is not ALL true, where is he getting 63 from? It is 59 1/2
No, it’s not all true. It’s not logical either. Please don’t listen to these guys. They’re both confused.
Vlad is slow AF! 👀💯
You only pay taxes on the amount that you pull out as if it were income. So if you pull out 70k per year, then you only pay taxes on 70k that year. So if you're making 140k today, without putting into your 401k you are absolutely paying more in taxes because your AGI is 140k instead of the 117k that it could be by maxing out your 401k contribution.
Only the Roth
Close....
That $70k you pull out is counted as earned income.
So, it's really $70k + your regular income = the amount you'll be taxed on.
In many cases, this will put you in a higher tax bracket, which means you're paying way more in taxes than what people are anticipating.
@@danisle4379if your retired, what regular income?
That’s y I have all Roth accounts. Roth IRA, wife’s 401k has Roth options, my 457 has Roth options. Paid the taxes going and have tax free growth for 25 years
This dude starts fights at the driving range
When a billionaire explains tax codes you need to listen.
He isn't a billionaire
My company just takes approx $300 bi-weekly from me and puts it into our pension (possibly a defined pension plan or DPP) where they send us quarterly reports of what I will retire with at age 55 or 60 or 65. The maximum money I would get. The minimum. The survivors benefit to my wife or family, etc…
I also max out my CPP and CPP2 every year (Canadian pension plan). Also, I’m considering throwing some money into RRSP’s (registered retirement savings plan) as I’d get a tax break as well. However, I’m not certain on the rrsp as I’d like to live frivolously now and don’t need to be extremely wealthy when I retire.
Thoughts?
- Canada, Ontario.
Grant you are correct
I gasped. Vlad… bro… wtf 😂 you pay taxes on withdraw not deposit in a 401k. It’s the least advantaged account. Grant is right even though I hate that guy
Grant cardone is still tbe type of guy that says Home ownership is a dumb idea..so you can Rent One of the houses HE ownes
Rental property
right, cause per grant the most productive thing you can do for society is own all the homes. fuck being a doctor or engineer and working for what you have and making something productive for the world, just be a land owner.
Taxes always get its share 😮😮😮😮😮
Roth 401ks also exist
Good info. I pulled out at 60 and paid the tax. I'm money ahead.
Your tax stays the same as the standard deduction is adjusted for the inflation and you pay less tax as you earn less then...
I take my money out as a loan and I pay it back with interest to myself. I like i have it when I need it. It's perfect
Neither one of these people have any clue what they are talking about lol, this is just painful.
I totaly Agree & thier getting paid for their Nonsense
Grant had to educate that dude real quick. Sounds like he was in for a rude awakening
Well if the 401k was a roth he would be alright. But clearly its not. No thanks to the organization that he is working for. Most employers don't offer the roth.
Grant is correct. 401(k) is a tax-deferred account meaning you pay no taxes now while your money grows but you will pay taxes when you withdraw the money between ages 59 1/2 - 72 years. If you withdraw before age 59 1/2 you will also be penalized in addition to paying taxes. If you withdraw after average 72 you will be penalized as well.
My company is doing 8.5 % match to my 5 % for my 401(k). I’m 54 and I would love to “retire” now so I can rollover that money into an annuity, a safer investment option. I’m praying my 401 (k) keeps performing well.
401k Roths are tax-free, on withdrawal. Which he acted like they dont exist.
This is the winning comment! Let me know when you retire or change jobs and we can get that annuity set up for you!
Vlad swear he knows everything
Grant is correct. The best thing for you to do with that money that you put in your 401(k) is to buy a a second property.. by the time you’re 63 that property is going to be worth probably three times what it’s worth and so is the rental income and so is your profitability. And guess what you don’t have to pay taxes because of all the tax write offs on the house like depreciation, etc. the best tax write offs you can get is real estate. I’m doing that now. 401(k)s suck.
Vlad is like " damn they got me" 😅😅
GC is great! "...what's wrong what's wrong with you ... bro?!" LOL
I feel like it’s smart to have money in a 401K, but not as your only or main source of retirement savings. In Canada I recommend maxing out a TFSA ($10k) annually, and setting it up where it’s invested into an ETF with dividends reinvested.
I'm in the transportation division of Phillips 66, and they match dollar for dollar up to 6%, and at the end of the year, they give you an additional check for 6% of your gross for what you made that year, it goes also to your retirement. It's a win with certain companies. In our pipeline and midstream facilities division shoot, they get 8% match dollar for dollar. Almost unheard of.
Both partially wrong.
1-age is 59.5 to be able to draw penalty free not 63.
2- Tax free is a "Pause" from a young age to allow more money to compiund intrest and grow until you are 59.5.
3- at 59.5 you pay tax just like income as you withdraw but at a larger tax rate than when you earned the money over the years.
4- a retirement account is a forced savings. Something people without this forced savings would spend all or most of their money and be broke at retirement age and won't be able to retire, ever!.
I love when he said - what’s wrong w you?
I live in Canada and my brother-in-law had an RRSP ( equivalent to the 401k) he retired at 65 and at 70 he wanted to put a new roof on his little barn and went to withdraw $10k.
Got $6.5k.
Dj vlad trying to argue with Grant Cardone 😂
Taking financial advice from Grant Cardone is like taking life advice from L Ron Hubbard. Wait a minute…
Imagine trying to tell a millionaire about money and he proves you wrong in a 60 second clip
He's 100% correct!!! The 401K model has been a regret from it's own creator! Look it up lol. It's better to put it in Life insurance!
"We're from the Government and we're here to help"
Well, I guess that's one way of looking at it. I do somewhat agree with what he's saying. However, most employers offer a match program. If I don't opt to join the 401k program, I'm leaving money on the table
Not paying a 401k is cray, best tax avoidance method we can use
This is why you do the "buy, borrow, die" strategy instead of a 401k or IRA.
Roth 401K: let me introduce myself
That's why it's the best decision to do Roth. You pay the taxes now then withdraw tax free at retirement. Because yes, taxes will more than likely be higher when you retire.
Cardone just gave him a free lesson.😂😂😂
He’s wrong. The money grows tax free and when you withdraw it it’s taxed as income. So you don’t pay taxes on the money when you invest it and it grows tax free. If you use a Roth then it grows completely tax free.
Dude got chin checked 🤣
And that’s why I only max out my Roth and don’t put into a traditional IRA. I live and enjoy my life along the way with what I need to be comfortable at the end. I don’t need to be rich
The difference is employee match, not having to worry about putting a crap ton in. Bro when I’m 63 I’m taking it all out and living on that the rest of my life. Bro is just mad he wasted 40 years not doing it so he makes other people feel miserable for doing a good deed upon themselves. Roth all the way
Grant bout to give his course to America for free
Grants face when the guy said “you don’t pay any taxes” the look of I’m sitting across from stupidity here
It’s taxed as income if you don’t contribute to the 401k. If you are in a higher tax bracket now then you will be in retirement (which is true for a lot of people because you are no longer being paid from your employer) it makes sense to contribute to a tax deferred account like a 401k and delay the taxes. Not to mention you receive a match and compounding interest on the pre tax contributions.
If your going to buy a house ...pay cash...Gene Simmons😂😂😂
my company automatically listed me into pension this month. i was 10 years off of it. i feel ripped off lol
Grant is strangely correct on this. Most people do mix up the “penalty free withdrawal” vs “tax free withdrawal”. Not the same.
The kicker with 401 k is not only is tax deferred but with better companies that have matching component, and often it is stock which is like gold mine.
It’s charged as income tax upon withdrawal. I generally say if you can get a roth401k do it otherwise take the companies match and use other vehicles for investing.
He says don't invest, but I've met countless people who have more than enough money to live on and are enjoying retirement stress free.
Grant literally makes an entire lively hood. Off convincing people to do the completely wrong thing.
When you are born, your parents are taxed on the medical bills. As you grow up, they are taxed on the things they buy for you. When you finish school and go to college you are taxed on the supplies, books, and loans. When you graduate, you are taxed on the food you buy while you find a job. When you get that job, your employer is taxed for their business, as well as your check. When you use that money, you are taxed for the sales. When you want to buy a house, you're taxed on the payments. While you make those payments, you're taxed just for having your name on the property, aside from the payments entirely. When you get insurance for that property, you are taxed on the payments. When you're old enough to retire, you are taxed on what you take out.
Remember, folks: No matter what, Uncle Sam gets his cut.
Every time a single dollar changes hands, a percentage of that dollar makes its way to the government as tax because that dollar as it changes hands represents a purchase or a sale which is taxable. Thousands of people pay tax on that single dollar as it circulates from business to business. Just something to think about.