Putting money in Roth, etc.
I just wanted to hear peoples opinion on maxing out Roth, and or what else should I do to invest money rather than it just sitting there? Thanks!
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Bump
If you meet the income requirements to invest in a Roth, you’re underpaid, son.
WhT about being a SA
Try to be less ignorant
https://www.nerdwallet.com/article/investing/backdoor-roth-ira
You can convert traditional IRAs to Roth
You do know Roth 401k has no income limit, right?
Only under certain circumstances
Most BBs should also have a Roth 401k where you can put money in addition to a Roth IRA.
Order of investing:
max out 401k, max out Roth, consider a 529 plan if you plan on going to grad school. The main advantage of these is the growth isn’t taxed. A 401k you pay taxes later a Roth you contribute after tax funds. As others mentioned, be careful that you aren’t above the income limits for contributing to a Roth. If you are, you can get around it, but it’s a little more cumbersome.
The remainder you should put into VOO, or money market accounts. A rule of thumb people use is take 100 - your age and that is the amount of S&P exposure you should have.
I would recommend only having 2 months of expenses in your checking account and the rest in a brokerage. Be careful you don’t contribute too much to Roth’s or 529s because assuming you are a male, you will need to buy a ring, car, house in the near future and will need funds to do that.
Are there penalties beyond the normal taxes you would’ve had to pay if you withdraw from a roth/529 too early?
10%
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