{ "media_type": "text", "post_content": "It seems that common advice after getting your emergency fund, is to max out 401k, then IRA.\nBut 401k limits are relatively high at $19500. Is that really where I should be putting all of my money prior to investing in my IRA, or should I invest only what my employer will match? I feel like if I aim to max out 401k limits, I’ll never touch my IRA.", "post_id": "6100532ee967080029017b89", "reply_count": 23, "vote_count": 1, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

It seems that common advice after getting your emergency fund, is to max out 401k, then IRA. But 401k limits are relatively high at $19500. Is that really where I should be putting all of my money prior to investing in my IRA, or should I invest only what my employer will match? I feel like if I aim to max out 401k limits, I’ll never touch my IRA.

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401k up to match and then IRA. Then back to 401k up to max. I would follow the chart below. Personally, I'd switch HSA to be before IRA (triple tax benefit), but everything else makes sense.

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What is a backdoor Roth 401k? Mega backdoor Roth IRA or backdoor Roth IRA?

I think the normal advice is to do 401k up to match limit and then Ira/HSA. Then back to more 401k

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If you are over the limit and you have no traditional Ira balances, you can do a backdoor Roth IRA. If you want to do traditional and you are over the deduction limit, definitely do 401k

Up to the match amount for the 401k, then IRA, then max out 401k. However, aside from some technicalities that do have some marginal impact, if you Max your 401k and can’t max out your IRA, you are doing okay.

Why IRA before 401K? Aren’t they basically the same?

IRA has more investment options, which may or may not matter to you. Also Roth IRA contributions can be taken out penalty free, unlike 401k. Look up Roth conversion ladder for a method used by those planning to retire early.

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I don’t understand why ira before 401k. With the annual limit, factor in 8% of annual return, assuming retiring at 60 and receiving payout for 30 years, then I’m looking at about 70k of annual 401k income. As long as I make more now, my future tax bracket after retirement would be lower, so 401k is better than ira. Am I missing something?

If there is no match there is really no benefit of 401k over Ira unless you want to do traditional and are over the income limit of traditional ira. Or want to do Roth and have a traditional Ira balance and need to do backdoor

When people say IRA, are you all implying Roth specifically?

What about Roth 401K versus Roth IRA? How do you rank when you mix in Trad / Roth?

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