Newbie trying to get a better understanding: is it better to max the 401K or just hit company 401K match and max Roth IRA first?

like
Posting as :
works at
You are currently posting as works at

Either approach is fine but generally people start to contribute to IRA after getting the 401k match as it offers a wider range of investments.

like

If you don’t have the funds to do both, do the Roth IRA after you meet the match. Roth IRA is far superior to Roth 401k after Match for many reasons.

There are a lot of reasons for it but the biggest ones are:
1) freedom of investment options
2) not that you should but it gives you freedom to pull money out to buy your first house
3) control over investments if you move jobs - you have to convert the 401k to be able to invest in the future. Save the headache and get the Roth

The only reason for the 401k over the Roth is that there are no income limits, however, you can get around this by investing in a traditional Roth and doing an immediate Roth conversion

like

If you have debt (credit card) and you make less than 100k: Do match and pay off your debt.
If you don't have debt and make at least 80k: Max 401k
If you don't have debt and make 100k: Max 401k and IRA
If you make above 132k: Max 401k and max backdoor IRA.

That's what I use and tell friends.

like

Ah! Thanks this makes sense!

Do both?

If you don’t have the funds to max both, why not do a Roth 401k? You get the match, it’s a Roth account, and you can contribute more

Thanks All, I’m in the over 130K bucket and I don’t have any dependents so I feel like I get hit pretty hard with taxes, which is why I thought maxing the 401K first would help. But it sounds like the Roth IRA is more beneficial in the long run.

Maxing 401k first is good because you reduce your AGI. Since you make over the income limit for IRA there isn't a tax benefit to IRA i.e tax deduction. But maximizing all tax advantage accounts first is smart.

like

Is there a potential independence issue for doing IRA’s

Managers and up (might apply to everyone, didn't when I was a senior) are only allowed to use brokers that allow broker import for automatic review of potential independence violations. Most of them do.

Also before we make an investment that we don't already have we need to check to see if it is restricted. Not a big deal to me and if something becomes restricted then they'll let me know automatically.

This is for KPMG, likely same at other B4.

Tldr: only if you completely disregard the simple steps they have put in place.

helpful

Related Posts

Is life insurance a priority to anyone at the moment, and if so why is life insurance important to you?

It can be impossible to deal with financial losses due to declining health or unforeseen circumstances by not having life insurance. In these cases, the solution to your debts (that can affect the financial stability of you or your loved ones) may fall within the category of life insurance.

Post Photo
like

Kamusta? I'm new here.
I'm a CPA in the Philippines. I'm thinking if I can continue my profession and progress my career in other country and also to seek higher salary with great benefits but less cost of living. Where do you think should I start checking on? 😁
I'm thinking if I should go back as External Assurance Auditor to where I am 2.5 yrs ago in a one of the Big 4 before I became a Consultant on a project-based as, so far, as Tax Specialist. Any advise to my baby mind? Thank you! 😊

like

Has anyone dealt with submitting domestic adoption costs for reimbursement? Do we just email them our receipts as the expense has occurred. Is there forms to fill out as well? I just started the process and made my first payment and want to know how to submit.

Can we get a gaming laptop using the 1100$ reimbursement?

like

I moved back in with my parents in August, and my mom and stepfather have demanded monthly rent. They are in no way poor at this moment in time, and in my opinion it’s f*cked up to demand your child pay rent. I bought a VR headset a couple weeks back and my mom increased the rent because “I can afford it.” Is this normal? I honestly feel used. Fwiw I’ve worked since I was 13, and hustled my entire life.

likefunny

Getting ready to leave my role - looking for community ops, comm ops, member support, account management - anything in those customer facing roles that is paying minimum 75k. Remote preferred, based in Chicago. Background in freight/logistics and healthcare.

like

Mother has a decent nest egg ($3M) and lives in an extremely LCOL area. Currently manages money through RBC, however the fees are a gross operating expense of 0.36%. What do you all recommend? I’m not savvy enough to manage it myself however I know that fees can stack up and kill returns. Would appreciate any insight/advice/snark.

like

Experts - Best redemption option for Amex reward points (the ones that come with standard green Corp Amex card)??? I use them on Amazon but checking to see what other options are better...

like

3 years ago I asked for a compensation review/raise, went through what felt like a ridiculous 8 MONTH long process of defending why it was warranted, only to be told no. 3 months ago I asked again and it has gone nowhere. I should add that salary bands are kept secret and I have no clue what the range for my position is. There are a decent amount of benefits in my position, the biggest being WLB, which is what has kept me here for so long. But I’m getting frustrated. What would you do?

like

It looks like Y&R healthcare is looking to expand... what’s it like? The accounts, culture, management, etc.

like

What benefits are provided by PWC Bangalore AC to employees? Is the culture good enough compared to Deloitte USI?

like

Anyone at Deloitte working within healthcare regulatory willing to chat?

Trinity 🐠- what are maternity benefits like? Is there required tenure before you qualify? Much appreciated in advance. Thanks

like

What are LEK benefits?

likefunny

AE position for healthcare in DC area; COLA from previous salary/location (AE role) says it should be $75k. Don't think that's realistic - any insights?

like

Hi Fishes, I have recently joined Ericsson. What are yearly hikes and benefits I can expect? Please share your valuable feedback. Thanks in advance.@Ericsson

likesmart

What are your favorite personal finance books? I just read Rich Habits and really liked it. I am also reading the Psychology of Money. Looking to read some more!

like

One item borrowers shopping for mortgages get too caught up in is rate. Most borrowers don’t know how to read a loan estimate and get taken advantage all the time. Just because a lender/bank offers you a low rate doesn’t mean it’s best deal. Most cases, especially now since rates have gone up, you are being charged points for some of these lower rates in the 4s. If you don’t know or understand discount points feel free to shoot me a message and I can help you review estimate and see if can beat

like

My friends (especially the ones on H1b visa.. since our immigration process is tricky),how are you planning to report taxes on the coins you are HODLing or have in exchanges outside US (say binance)?

like

More Posts

Hi, all! I’ve just discovered Fish Bowl and excited to mingle with other marketing professionals. This may seem weird, but I’ve always wondered how many general marketing professionals there are as opposed to specialized (email, social media, events, etc.)? Would love for people to share what field of marketing they’re in?

like

Is it worth it to exit for pharma sales? I know some people have made the switch. The money is tempting but I can't help wondering if it's just a "grass is greener" situation

like

I just got this month salary and there was income tax in deduction, for last few months there wasn't anything of that sort.

How frequent does income tax deducts - one time(yearly), quarterly, half year or monthly?

like

How many hours a week (average) do internal auditors work? Is there busy periods of the year like public accounting ?

like

Sorry if there is a better board for this question. We are not yet pregnant. Are there any other Firms out there that offer financial assistance with IUI, IVF, egg donation, surrogacy, adoption?

like

😞 feeling dejected. Soooo many interview rounds. Connecting so well. And once again, no go. At least I knew not to tell anyone this time so I can fail in private

like
like

Did you all transfer one embryo for IVF? My doctor said we could freeze the other good ones but didn’t recommend that we transfer more than one.

like

Hi guys. Shall i join PS. Are they still firing?

likefunny

Anyone here train Brazilian Jiu Jitsu? I’m moving to the city in a month and looking for a new gym that’s good but won’t break the bank

like

When you find out you’re getting promoted

Post Photo
likefunny

Hi all! I've got an SEO question I'm hoping someone can help with:
How do you choose keywords to target in a blog when you're writing a blog that appears on multiple country specific versions of a given website? Do you use a mix of keywords from each region/country in one blog, or create different versions of the same blog with slight keyword differences based on the country?
Feel free to DM me if you want! thanks in advance from an entry level content marketer. :)

like

Anyone know any good book recommendations that help improve your financial analysis skills?

like

Hi Boss Ladies!
I’m 32, and on the fast track to senior leadership positions w/in Investment/Finance industry. I’m thinking about getting a career coach as a sounding board to navigate the next leg (MD/EVP to Partner) in this highly competitive, very male dominated field. Has anyone here hired a career coach? Pros? Cons? What were the biggest questions you were hoping to discuss? Anyone that you would recommend? (I’m located in Boston, but very open to a virtual coach)

like

a very specific question to all Canadians.

Current situation , i need to refund signing bonus which was paid along with 3 days of work at the company, taxes are withheld obviously
When you refund a signing bonus do you
1- refund ALL of it even taxes Withheld ?
2- refund only the amount that was deposited in your account
3- mix between 1 and 2 refund more than was deposited but less than the whole amount ( taxes should be refunded to me next year)

My contract says 2 and they want to do 3 Help

like

Hello all, my firm is looking for a consulting partner to support the HR M&A integration. Please feel free to DM me if you have the interest in connecting.

like

Is IT facing recession in India ??

like

Did any of you have side effects from estradiol in the lead-up to your FET? I am also going to be taking medrol and doing progesterone in oil shots and am unsure what to expect physically. TIA!

like

What benefits do I get if I become disabled during my service?

like

What does chief of staff do? Is this a similar role to a senior consultant? And how much they make?

likefunny

Additional Posts in Personal Investment Chatter

Is BRK-B a buy right now?

like

VTI, VOO, or VTSAX - which do you all prefer and why?

like

I’m considering Schwab roboinvestors to manage my investments actress various index funds aligned with my risk profile. Aside from the large 6% cash requirement, what are other downsides?

Does anyone have experience adding authorized user to a fidelity account?

like

I make $140k in New York. Should I invest a Traditional 401K or a Roth 401K or do a split?

like

Would anyone like to share ways they give back or donate? And at what % of net?

like

People investing in rental real estate what’s your ROI this year? My profit divided by current value is barely above 3% (and that’s with no renovations and 100% occupancy). Should probably sell it and invest elsewhere...

like

How much do you take home after tax and maxing pre tax 401k while making 144k? Not sure if I'm doing something wrong with my withholding. I'm married filing jointly withholding at a single rate, 1 federal and 1 state. DC location. I'm only taking home $6k a month.

like

When you do a back door roth - do you close the traditional ira or leave it open? My first time doing it and fidelity is asking which I prefer.

like

Hey all! I would appreciate some feedback on my investing strategy: I want to buy QQQ3X when QQQ goes below 118$. I believe a major market reversal (a crisis) should take place in late 19 or (cont)

Repeat with me, this is a buying and holding opportunity! 👏🏻

like

what’s the most you’ve spent on brunch 🤣

funnylike

I’m a first time home buyer and trying to figure out how to get started. Any good resources you all have come across or tips in general? Specific question in comment below

like

Where would you invest a $100k bonus in the current markets? Was thinking about a split between crypto interest accounts (in USDC), stocks, and crypto… but BlockFi legislation and general shakiness in the markets have me worried.

Just paid off student and car loans, and gave a fair bit for my parents’ mortgage.

like

What ETFs, index funds do you all invest in and what u recommend in this recession looking like economy. I'm a beginner investor. Just opened my fidelity brokerage account.

like

Worth buying VTI today? Every week I am buying and it’s going lower and lower the next day. I bought it yesterday and today it’s 5$ lesser than yesterday!

like

thoughts on buying airline stock? delta?

like

If you kids are the beneficiaries on my will — can I put one of them as the primary executor as well ? I’m divorced btw

like

Has anyone here bought land and built a home or completely renovated a new one in the city? Outside of timeline, are there other pros/cons you would highlight? What was more cost effective?

like

Need some advice for investing, I make a base salary of 180k - meaning after taxes and 401k etc I take home 9k per month. Child care , living expenses - 4-4.5k, investments in india - 2.5k, I have up to 2-2.5k left every month. Should I be putting all of it in ETFs ? That would be about 33%-25% of my salary. I put my bonuses and stocks in savings accounts and CDs for my kid. Thoughts? Thank you!

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the
Fishbowl app

See what’s happening in your industry
from the palm of your hand.

A phone with Fishbowl app

Send download link to your phone

OR

Scan your QR code to download
Fishbowl app on your mobile

By continuing you agree to Terms of Use and Privacy Policy.

Messaging rates may apply

Download app

Sign up for free to view this conversation on Fishbowl

By continuing you agree to Terms of Use and Privacy Policy

Already have an account? Log in

Sign up for free to continue using Fishbowl

By continuing you agree to Terms of Use(New) and Privacy Policy(New)
Messaging rates may apply

Already have an account? Log in

For account settings, visit Fishbowl on Desktop Browser or

General

Legal