Robin Hood/Stash/Millenial Investing

[bimmerphile]

So what is the advantage to contributing to a Roth IRA in addition, vs just making your employee 401k contributions as Roth? The latter is what I have been doing for the last few years, to IRS limits. That being said, that type of investment isn't what I think we are really talking about here (?)

No RMDs, penalty free withdrawals for certain life events
If you’re on second year or later pay at a major you probably don’t meet the income limits for the roth IRA

 

[Inverted25]

No RMDs, penalty free withdrawals for certain life events
If you’re on second year or later pay at a major you probably don’t meet the income limits for the roth IRA

You can make back door Roth contributions if you are over the limit. They haven’t closed that loophole yet


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[form810]

I’ve been trying to educate myself on investing, and these seem like good options for complete newbs like myself. I like that you can try Stash for $5, people pay more for games on their phone! Has anyone else used one of these apps?

First: There is no such thing as "Millennial Investing". There is just "investing". (If you really believe there is, you will soon and painfully learn otherwise.)

Second:

BitCoin...

Go ahead, Scrow, I dare you! It's ALL Bitcoin these days! Maybe you need a refresher course.

By no means should one EVER invest in a company that actually makes real products and relies upon demonstrable sales figures and profits to justify it's market cap.

Go ahead! I'm READY! Call me a "Boomer", even though I'm not one.

I'm just a random 'tard who happens to believe that REALITY represents that which is measurably REAL.

Lord help them like me in our current age.

 

[woodreau]

So what is the advantage to contributing to a Roth IRA in addition, vs just making your employee 401k contributions as Roth? The latter is what I have been doing for the last few years, to IRS limits. That being said, that type of investment isn't what I think we are really talking about here (?)

Apologize for the necropost…

a separate Traditional and or Roth IRA is a separate tax advantaged account…. That allows you to put more money away for whatever you want to do in retirement…

there are several tax advantaged accounts…

401k.
Traditional IRA/Roth IRA
HSAs/Archer MSAs
QTP/529s
ABLE
SEP IRAs

theyre just different accounts that get special tax treatment….

it’s up to the individual, but depending on your income, you should try to leverage usage of these different accounts that you are qualified to use to your advantage if you choose to do so… or not.. because it’s… Murica…

but for most pilots the 3 main ones are 401k, Traditional IRA/Roth IRA and HSA…

QTPs/529s are tax free distribution for qualified educational expenses
ABLEs are tax free distribution for care of disabled people

SEP IRAs are a vehicle for self employed persons to fund a retirement account from their self employment earnings, because a 401k isn’t available for a self-employed person unless they also work for an employer.

so if you have a side gig (and or 1099 income) and file a schedule C for the side business (I.e. contract pilot or whatever you decided to do for extra income - onlyfans, doordash driver). while working as a pilot for an airline with W-2 income, you can have 4 separate retirement vehicles…. 401k, Traditional IrA/Roth IRA, HSA, and SEP IRA. Each with their own contribution limit….

but it’s the ability to squirrel away more money into tax advantaged accounts is the main reason for having a Roth or Traditional IRA in addition to the 401k…

but as someone said, most pilots depending on their income cannot directly contribute to a Roth IRA because their income exceeds the limit for Roth IRA contributions, they have to do the backdoor Roth - make a nondeductible contribution to a traditional IRA, then convert it to a Roth IRA.