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What changes should I make to my 401k?
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Hello All,
Looking for some help with salary compensation at Microsoft DART( Detection and Response Team).
Anyone who have joined or about to join Microsoft DART, Could you please help me to estimate on how much salary compensation 5/5+ yoe professional should expect for security analyst role at Microsoft DART within UK/Europe region.
#salary_expectation #negotiation #microsoft #dart Microsoft security Detection and Response TeamMicrosoft
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What changes should I make to my 401k?
I used to teach a financial planning class. Most of the people in the US don't even think about retirement. if they see something they like, they just want to know if they can afford the payment today and wonder why they have so much debt and nothing to show for it.
The wealth gap is a financial discipline gap. No one wants to talk about that or how to live below your income so you can save.
You are correct - people generally want things beyond their means. However, most things are out of people means for the lower class and middle class. Thats a result of a number of things - increased costs of living with lackluster wage growth, communities that only know their own way that are uninformed of benefits, etc etc.
By having this discipline, are they supposed to enjoy nothing in life? If someone is willing to put in a full work week week in and week out, they should be able to afford a home and a car and live life.
This is overly simplified but this is my understanding. It could be wrong or open to interpretation.
Both were created to help set people up for retirement. IRAs have lower contributions limits because the government wants tax revenue now. If you are able to contribute $50k a year pre tax to a IRA, thats less tax revenue to the government right now. If you are able to contribute 50k a year post tax and have significant gains, thats gains the government can't tax.
401ks were created to assist. There are costs that go in with setting these up, matching contributions, maintaining plans, investing funds.. Not all employers can handle these costs on their own, especially those employers of small mom and pop shops or non-white collar jobs
edit- forgot to answer the question. I think the system rewards those who work their way into certain type of jobs. In the past, the rewards went to factory workers who landed jobs with car companies and had defined benefit plans that set most of them up for life. Things have changed, especially as defined benefit plans are rarely offered anymore. Most people don't have jobs that set them up for life. Most people dont have enough saved for retirement, so plans like the 401k and IRA are available to help. They aren't perfect and their terms are a bit outdated. I don't know if its these plans that contribute to the wealth gap.. I think thats just overall society and how the economy here works
I think 401k was meant to Be somewhat of an replacement for pensions. I think the only real answer is because Congress said so. They set the limits
Rising Star
Can’t people do an IRA in addition to a 401k? I’m pretty sure you can do both and get deductions as long as you aren’t a certain income level. Then you get into non-deductible contributions
Sorry I had my threads confused. OP in a different thread had income above $150k. Yes, typically the best path is:
1. Max 401k
2. Max Roth, normal contribution, if you qualify. If not:
2a. Max mega backdoor Roth (if your plan allows it)
2b. Max back door Roth, (if no or little pretax account)
3. Non-qualified account for the rest
It’s a very good question. This is the best answer I could find, which is that employer tax benefits associated with 401ks are a way to incentivize participation in retirement plans: https://www.morningstar.com/articles/943986/why-are-ira-limits-so-much-lower-than-those-for-401ks