Too many people are making this common retirement planning mistake. Are you?

Motley Fool ^ | 03/22/2019 | Maurie Backman

[sparklite2]

invest after tax
What on earth for?  401-K goes in before taxes.
no tax on gain
Isn't 401-K the same?
can draw money without penalty
Don't draw down your nest egg before its time.
And when you do, draw down so as to not trigger tax or penalty.

And rather than give money to a life insurance company to invest for their own gain,
put those premiums in to mutual funds for you own gain.

[morphing libertarian]

If you defer and want a comfortable life, you wait till 59 and then pay more taxes than you would have had you paid all along. It’s often better to pay tax on the seed rather than the harvest.

Your statement is the old school thinking the way they told people they would have lower expenditures in retirement and less tax. That’s no true if you will have a active pleasurable retirement.

The issue on withdrawal is an emergency. No y=tax and you can put money back in. Hard to go 40 years with out an emergency. Why lock your money up and say I will go 35years without an emergency. Piss poor planning and thinking. you’re living in a fake scenario I can see you learned from stock market people or ignorant co-worker or uninformed family and when things go south you will work years you don’t want to till the market comes back.

I don’t have time and I’m not an agent. Agents cannot tell you insurance is for retirement so few know about this program. But they can say, look at 50, you can draw this out for 45 years. i know what my wife has because we went to several seminars and talked to investment people and financial planners before she made the move. I had your plan and hers is far better. We’re in it now and I can see the difference. And because of her we are in a comfortable situation.

lastly it seems you don’t even understand the tax burden when you want to withdraw funds 401k either early or at maturity. And you ignore the other benefits including being able to be your own interest free bank and protection from liability and security of the funds.

When the congress approved these programs with tax benefits, many senators put money into the program because they understood what the public did not after siting through the hearings and beings before they voted.,

Best wishes.

[sparklite2]

lastly it seems you don’t even understand the tax burden when you want to withdraw funds 401k

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Well, that went south. I’ve been retired over fifteen years and paid not one cent of federal taxes, including on my required, and my voluntary withdrawals from the IRA.

And that money went in tax deferred, not as a Roth.

I know what works for me, and while my situation isn’t universal, it’s far from unique. But this is probably too complex a topic for this thread. I’ll catch you later.

[dfwgator]

If you can sock away money in your 20s, you can pretty much spend everything you make in your 40s, and still have plenty to retire on.

[ProtectOurFreedom]

Yep, early start is the key.

[morphing libertarian]

If I could. Not everyone is the same of course. My view is that people lock into 401s and get stuck when the market is down or paying more taxes if they live longer than when they worked if they have other retirement income..

The tax issue is for people who have very good income and don’t live on just their 401 k and social or who want to retire before age 59. .

My retirement wass 403 because i was public peace office and had a separate pension. It was taxable. and i added social security.

My wife has peace officer retriemtn also and the life program.

She did much better than i and retired early at 57, because I was in a tax situation and only part of her pension was taxed not the insurance.

We live in a nice place with an ocean view and its better than where we lived when we both were rpeace officers.

We have taken 6 great vacations out of the country.

So i actually live better than when i was working, so we wanted more income at retirement not less..

My mother had 401 and social and lived a quiet live from month to nonth.

Again wish you well. just need to add that.

[trebb]

Took your advice - 24 years in uniform and 15 more years civil service training those in uniform....now comfortably retired and earned it honestly...so those who maybe didn’t take necessary steps can whine and bitch about those who did.

[Fido969]

You do realize where your pension money is coming from don’t you?

It’s from ME.

I’m not asking for gratitude, but a little less smugness would be becoming.

[trebb]

I also contribute to my retirement - military/DOD Civ/SS.
I served honorably, in uniform, for 24 years and helped others get their careers started (or prepare for deployments) for 15 more years...I won’t apologize for it or for planning my retirement so as to be comfortable...did without a lot over the years so I could enjoy the retirement years...would like to think if I had stayed in the civilian sector, I would also have planned ahead.

[Fido969]

Well, then, you’re welcome.

[trebb]

You say that as if though you think the public supporting the military is a good thing.......thanks...;-}

[hanamizu]

Teacher’s Retirement of GA is a wonderful provider. We’ll be even better off when we start SS.

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Don’t know if you’ve researched a little surprise that Social Security might have in store for you. If you are collecting a teachers’ retirement in one of 15 states (and GA is (maybe—depends on your district) one of them, your Social Security, that you’ve earned, is reduced via the Windfall Elimination Provision (WEP). I get about 60% of my pre-teaching Social Security benefit. Here’s a website that explains what you may be facing:

https://socialsecurityintelligence.com/teachers-retirement-and-social-security/

Enjoy your sailboat retirement!