Retirement

[namlive]

Retirement Question:

#1 ROTH 401K - with taxes taken out before the contribution is made (post tax)

does this mean that when the day finally comes, I wont have to pay taxes at all on my retirement money, even the interest it will earn?


#2 LIFE INSURANCE - say I have $500,000 policy, when I die, do the people I leave my money to have to pay taxes on that money, or do they get a check for $500,000 free and clear?

Thanks

Currently there is no tax on life insurance. Who did you say your wife is?

[HydroDave63]

Currently there is no tax on life insurance. Who did you say your wife is?

That would be the "Senator John Kerry Retirement Plan^TM " 

[Fermi2]

I have a daughter who wants to go to Dartmouth so what exactly is this mythical retirement thing?

[UncaBuffalo]

Retirement Question:

#1 ROTH 401K - with taxes taken out before the contribution is made (post tax)

does this mean that when the day finally comes, I wont have to pay taxes at all on my retirement money, even the interest it will earn?

That is correct.

[retired nuke]

I have a daughter who wants to go to Dartmouth so what exactly is this mythical retirement thing?

I'm 50+, 4 kids, youngest in Kindergarten.....
Glad I had a long adolescence, and semi retired in my 30s....

[LOKI RAD]

Thanks for the reply, I had heard the same info, but was looking for confirmation.

Wife, aint no stinkin' wife, gonna leave it all to my cat, I know she loves me!

[Cathy]

http://www.roth401k.com/

[Mike McFarlin]

My ex-wife took care of my retirement! Starting over is tough, but one must learn from one's mistakes!

[UncaBuffalo]

http://www.roth401k.com/

Thanks for posting that, Cathy.

Check me on this one:  I can NOT contribute to a Roth 401k after I max-out my regular 401k?  (We had been told we could start taking post-tax deductions after max'ing the regular 401k at work, but after looking at the site, I don't think that is true...?  You can do one...or the other...or both...but the total limit is still only the $15,000-16,500 - depending on your age?)

[Cathy]

Thanks for posting that, Cathy.

Check me on this one:  I can NOT contribute to a Roth 401k after I max-out my regular 401k?  (We had been told we could start taking post-tax deductions after max'ing the regular 401k at work, but after looking at the site, I don't think that is true...?  You can do one...or the other...or both...but the total limit is still only the $15,000-16,500 - depending on your age?)

You are correct, it is still subject to the same yearly limit with them both combined. After you max out your 401K, max out your Roth IRA (everyone with a 401K should consider having one of these!) and them start putting money into tax deferred annuities (if you like those sort of things). Once a year, depending on your plan rules, you can roll out your employer contributions (but not your contributions) into a rollover IRA without incurring the wrath of the taxman. I do this because it allows me more control and a wider range of options to invest in. When I went house last year I rolled my entire Bartlett 401K into a rollover IRA with Scottrade. It allows me to buy/sell stock with those funds.

[UncaBuffalo]

You are correct, it is still subject to the same yearly limit with them both combined. After you max out your 401K, max out your Roth IRA (everyone with a 401K should consider having one of these!) and them start putting money into tax deferred annuities (if you like those sort of things). Once a year, depending on your plan rules, you can roll out your employer contributions (but not your contributions) into a rollover IRA without incurring the wrath of the taxman. I do this because it allows me more control and a wider range of options to invest in. When I went house last year I rolled my entire Bartlett 401K into a rollover IRA with Scottrade. It allows me to buy/sell stock with those funds.

Thanks.  I'm coming up on max for the 401k & have already taken my Roth IRA for the year, so guess I need to check out the annuities you mention.

The nice thing about Bartlett's 401k is that you can roll it over & still contribute next time you work for Bartlett - without waiting another 6 months (or whatever the original waiting period is...)  I took advantage of that a couple of years ago when I went back to school...got it all into a rollover & then split it over a couple of tax year rolling it into my Roth.  Then, when I went back on the road, Bartlett let me straight back into their 401k, so I can repeat that next time I have a low tax-bracket year