401K or Roth? New Monies?

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401K or Roth? New Monies?

Post by elgaeb051 »

Last edited by elgaeb051 on Thu Oct 13, 2011 11:14 am, edited 2 times in total.
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Post by archbish99 »

Yeah, that's basically it.... My order of preference is:

- 401k up to match limit (probably a Roth 401k, if allowed by your employer)
- Build/Replenish Emergency Fund
- HSA if qualified & have decent custodian (debatable)
- Roth IRAs
- Pay down mortgage somewhere in here (debatable)
- Taxable investing

I won't be qualified for an HSA until 2013, and I'm not super-thrilled with the custodian, but I'll probably max it out anyway. Once we've built up enough of a balance, we can roll it over to a different custodian (maybe Vanguard will offer them by then?).

Particularly if you're in the 15% bracket, Roth is probably a good option for you. We're at the lowest tax rates in a long time historically. Pre-pay taxes at these rates while you can!
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Re: 401K or Roth? New Monies?

Post by retiredjg »

elgaeb051 wrote:Is it still appropriate to put money in an employer's 401K
...or is it better to, outside work, fund an ROTH IRA? Age 62.
Hard to say which is better without knowing more.
Does it matter if one is in the 15% tax bracket? or not?
It might.

Sorry to sound so cryptic, but I think the answers might vary depending on your total situation, tax bracket, amount you have saved already and where it is located, your spouse's retirement accounts, etc.
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Re: 401K or Roth? New Monies?

Post by amdmaxx »

and then keep on going to the max...
elgaeb051 wrote:
Edit: Well, of course, you'd want to fund the 401K first if there was an employer match.

- E
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