Hello @Elle I’m also like eny. I tend to listen to podcasts in English for the same reasons you want them in French. But I’ve been recommended this one by friends; just listened subjects related to kids: https://www.franceinter.fr/emissions/grand-bien-vous-fasse
I’ll ask around and let you know
Is there a reason to have both pre tax and after tax retirement savings when I do not make enough to max out either account? What is max anyway? 15K in each? (LOL at being able to save that amount.)
To explain: I have zero interest in dealing with investments, so I have always done and would prefer to continue doing the easiest thing I can. I would prefer not to have more than 1 account unless there is a great reason to do so. I have an IRA through work which my boss puts 3% into and I put 7% into, which at this point is what I feel I can afford with other savings that I need. I also put larger amounts in when I get commission checks, but that is random, perhaps 1x a year. I want to increase the amount as I am able to in the future. If I were to do a Roth or something, I would have to put less in my IRA to find the money to put into it, I don’t currently have “more” that can be funneled into a new account.
Am I ok to keep doing the easy thing? I do like the broker guy we have.
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I think (remembering back like two years) our tax guy advised that we do post-tax because it reduced our taxable income now instead of when we’re in our 60s. That let us keep more money now to spend on life stuff (day care and kid related nonsense in our case) and outweighed the advantage of doing Roth.
I hope others weigh in as my recollection is fuzzy, but the logic back then was helpful since I had had the same question.
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Thank you.
Just for clarification because it might help: I am 50, single, no kids, my only debt is mortgage which is close-ish to paid off. I don’t make much, but don’t need much as I live pretty simply.
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I thought:
Pre-tax (like 401k) reduced taxable income now
Post-tax in the form of a Roth would not be taxed when withdrawn (as per rules on age and vesting etc.).
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I think you’re fine with pre-tax (your IRA). At 50, you’re only 9.5 years from being able to access that money if you needed it. Unless you’re planning to retire younger than 60. Since you don’t need much to live on, you are unlikely to have high taxes when you start withdrawing from your IRA.
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It makes no difference in regards to investment returns whether you pay x% in tax before or after. HSA accounts, however, do get the boost of avoiding FICA (7.5%).
It mainly depends on what you think your tax situation will be like in retirement. If you will be living on significantly lower income than currently while earning, pre-tax makes sense, because your tax rate will be lower then than it is now. Make sense?
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Thanks! Sounds like I can continue what I am doing which is a good thing.
I mean… retirement is not on my radar much? I have saved all I could, but it is still nowhere near the 1M or whatever people say you need? I am fortunate that my boss started the IRA 20 years ago, or I would have much less because it basically forced me to save which was very helpful. Will social security still be a thing in 20 years? That would certainly help. Having a paid off house is high on my list, then when that gets paid I will add that $ to my IRA or other savings.
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Generally speaking, the rule of thumb is that you want 25x annual expenses (or 300x monthly) to have “enough” to retire. This of course goes down if you plan to simply downshift and offset expenses partially with income long past 65, or you retire later in life, or have a reasonable expectation based on family genetics that you won’t live super long, etc
There’s a massive amount of literature about this in the financial independence space, including some very detailed calculators/simulators that can predict your possibility of success based on historical market data.
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Just a quick add-on to what @druidessie said: You want 25x annual expenses IF you do not want to spend down your savings (i.e. live off of interest/returns rather than the actual saved money). You would not need that much if you are okay with spending down your money over time.
Also, I’m your age and they generally recommend that you calculate receiving 75% of your estimated social security benefit rather than the full amount. So, I think you can count on receiving something from social security.
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No, that’s a misunderstanding of the Trinity study. The 25x rule (4% SWR) means that in any 30 year historical period you would be assured of not running out of money, including retiring at peak of the market in 1929.
Because of that, however, you are right that in many historical periods you will end up with way, way more money than you started. But 4% is considered absolutely safe.
Many people are comfortable with retiring with much less than 25x because they build their retirement budget with optional spending they can cut back if market returns go south, or figure they can always go back to work and earn some $. The 4% rule is a very robotic look at human behavior, because it assumes the hypothetical retiree never reduces spending even in the face of a market disaster.
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Where do I go to buy mailboxes for an office when I want:
- affordable in a quantity of ~12
- able to fit relatively sizable packages (records)
- see thru/things won’t get lost in the bottom
- wall mounted?
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I want my 14 year old to read up on theories of human motivation. I’ve directed him to look up Ted talks on motivation. What else is accessible and useful and would be useful for a highly literate 14 year old?
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By human motivation, what do you mean?
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I looked up my social security and of course it’s based on my highest paying year ever lol. I have had a couple of really good years, but mostly I have an average that’s lower so I don’t think I can use the number they gave me. Can I deduct like 30% from it to come up with a more realistic number? Any amount is better than nothing of course.
I don’t think there will be any chance of just living off the interest of my investments, it’s going to be too small. I assume I will have to draw down my principal. But I will only have to draw out whatever amount I need over the social security amount right? So if social security covers half, I take less of my money out?
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Yes
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Depending on what exactly he’s interested in, I may be able to hit up my psychology research folks. Let me know if that would be helpful.
Your benefit is actually based on the average of the top 35 years of employment, so 1-2 good years won’t throw off the anticipated benefit too much. The main question would be if you intend to stop work or downshift before your anticipated retirement age. There is a calculator on the SS website where you can put in different ages to see how your benefit would change.
Here’s more info on how it’s calculated: https://www.ssa.gov/pubs/EN-05-10070.pdf
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He has a hard time getting motivated to get his stuff done, and is easily distracted. Like all of us, really. In other areas (like anxiety) it has helped him to know strategies and theories that he can apply to the situation. There are a lot of books on being efficient and motivated, but I don’t know which are particularly good.
Also he likes learning stuff and enjoys psychology. If he could learn cool new stuff that is helpful in his life that would be awesome.
I can’t be more specific because this isn’t an area I know much about. Hence the question.
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Legit. It sounds like most of his questions are practical questions around things like executive function, sustaining attention, sustaining interest? I’ll see what my psych posse can dig up.
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