I strongly advise putting money into your Roth 401k/403b/457 if you get an employee match. Then extra money in your budget goes to your Roth IRA. And if you max that then max out your Roth 401k/403b/457.
Roth IRA's give you the flexibility to take out whatever you put in if you started a Roth IRA at least 5 years ago. (Really, it's 4 and a piece years you have to wait, because it's after the 5th January 1st you're able to take out what you contributed.)
So in my case I have many kids and didn't know how many of them would go to college, stay in college, etc. So I put the max in mine and my wife's Roth IRA's, starting them 5 years before my oldest was old enough to go to college. We were able to cash flow one kid's worth of college costs, but not 3 kids simultaneously. So I took a little out of my Roth IRA with no penalty to help offset the costs.
If I had put a lot into a college 529 and wound up with only 1 kid in college, I would have trouble taking out the excess from the 529 for non-college use (i.e. retiring) without paying a penalty. But using Roth IRA's gave me the flexibility for the unknown.
Is there any more news on President Trump maybe raising the mandatory withdrawal age from 70 1/2 years old?????
Still too low
Oops. My original comment said the over 50 catchup for 401K’s is $500. It’s still $6K. So max in 401K’s for over 50 is $25K.
The CPA in me hates this headline.
It makes it sound as if the limit has been eliminated; which is what caused me to open the article.
It should really say that the limits have been raised.
Question: I’ve heard Dave Ramsey and now you (and others) say to match the employer and then fund a Roth IRA and then back to the Roth 401K. My question is why? Why not just stay in the Roth 401K due to lower fees? Is it because of the lack of 10,000 funds? Thanks..
No change for simple IRAs?