IRA's Vs. Mutual Funds

Flagpole Willy wrote:

What kind of advice are you suppose to give a guy who says, "I put $6233.33 away every month and will have only $187,000 in 30 years. How do all of you plan to end up with millions?"

you tell him to buy a calculator.

(6233.33 * 12 = 74,799.96; 74,799.96*30 = $2,243,998.80)

Jeez, I didn't say there was anything wrong with generic advice. Like this is pretty generic stuff, but it is not bad, just generic:

"Should I start talking about no load funds or small cap vs. large cap or the differences between a money market account vs. a mutual fund? "

Flagpole Willy wrote:

2) Regarding the word 'saved', so you're telling me that at retirement time if your investment advisor (if you have one) tells you that you've "saved" $465,000 that you'll think he just means $15,500 a year for 30 years and you won't wonder? Ok brother. Whatever. Saved to me is the amount you've saved in addition to what that money has made you.

I think you are deliberately muddling the water. How does it follow from anything that the other guy said that he would think this?

kaitainen wrote:

it's readily apparent that you are never going to admit fault. you gave the OP misleading/incomplete information that i and others helpfully expanded on and clarified. you're not a big enough man to admit that.

good day.

1) BS. I told the guy that he would be dinged with a 10% penalty for early withdrawal, and in MOST cases that is true. You decided to point out the very specific case where someone could take their CONTRIBUTIONS and make it look like you were Mr. Know It All. I agreed right away that you can take your contributions out, and that should have been the end of it. I'm not even arguing that point. My issue with you is that in your way of thinking about investing (where a Roth IRA is used as a termporary placeholder for money), there will be no money grown. To think of not taking any money out at all until 59 1/2 is the correct way to think about putting money away in an IRA, AND if someone takes your suggestion (not a bad one by the way) that they put 3-6 months of expenses away in a more liquid account then they should NEVER need to get at that IRA. Always keeping it open for taking is a bad bad bad idea. Might as well NOT have a retirement account then.

2) I ALWAYS have a good day.

3) How many more times are you going to respond after you've said you wouldn't several times?

say what? wrote:

Flagpole Willy wrote:

2) Regarding the word 'saved', so you're telling me that at retirement time if your investment advisor (if you have one) tells you that you've "saved" $465,000 that you'll think he just means $15,500 a year for 30 years and you won't wonder? Ok brother. Whatever. Saved to me is the amount you've saved in addition to what that money has made you.

I think you are deliberately muddling the water. How does it follow from anything that the other guy said that he would think this?

Not "muddling" (whatever that is) the water. If you're ready to retire and your spouse asks how much you've both saved for retirement, you look at your accounts brother -- the total amount! You don't go add up just the amount that you put into those accouts for 40 years. Whatever the total is, that's how much you've saved. If you didn't save any money, then there would be no interest to be earned, so whatever you've saved and whatever money is made from those savings is money that was saved. If you want to have a different view of that, go ahead. Mine is for sure the most common view BY FAR.

kaitainen wrote:

Flagpole Willy wrote:

What kind of advice are you suppose to give a guy who says, "I put $6233.33 away every month and will have only $187,000 in 30 years. How do all of you plan to end up with millions?"

you tell him to buy a calculator.

(6233.33 * 12 = 74,799.96; 74,799.96*30 = $2,243,998.80)

Oops -- "every YEAR". Made a mistake. Owned up to it too -- as ALWAYS.

Please do not listen to any advice you get on the internet regarding this subject. I am a licensed financial advisor, and most of the people have NO idea what they speak of. They are either slightly off, or completely wrong. The best advice I can give is to speak with a QUALIFIED advisor regarding IRAs.

Okay, as a teacher, it's my understanding that I have a 401K (the state's teacher retirement fund) AND a 401A (through my school corporation & which I understand to be VERY similar to a 401K) through my job. It's further my understanding that I can personally allocate more money into my 401K but that I cannot put any personal money into my school's 401A. Additionally, I have a 403B set up with 3 different mutual funds and just opened up a Roth IRA (which I'm not sure I necessarily needed since I already have a 401K and 401A)

My question is, should I be putting the majority of my money into my Roth and 401K and less into my 403B/mutual funds, or should I allocate them all somewhat equally?

Thanks (and Flagpole Willy need not respond!!!)

I have never heard of a 401(a). You sure you aren't mistaking a 401(a) for a 457?

Do you work for a public school?

Look at the annual fees and the fees on the mutual funds you are offered in the different plans (as well as the peformance).

Roth vs 401(k) contributions - look at the tax rate you are in now and guess what tax rate you will be in the future and what tax rates will look like in the future. If you are in the 15% percent bracket, it prolly won't make much difference. I expect the higher income brackets to increase. If you are in a high bracket now, you would be better off putting more into the 401(k) so you lower your income bracket now and when you are older you might be in a lower bracket. But it is a total guess as what bracket you will be in when you retire and what the tax system will look like then.

If you plan to retire in a state that doesn't have income tax and you pay income tax now or vice versa, that might play into the decision too.

confused investor wrote:

Okay, as a teacher, it's my understanding that I have a 401K (the state's teacher retirement fund) AND a 401A (through my school corporation & which I understand to be VERY similar to a 401K) through my job. It's further my understanding that I can personally allocate more money into my 401K but that I cannot put any personal money into my school's 401A. Additionally, I have a 403B set up with 3 different mutual funds and just opened up a Roth IRA (which I'm not sure I necessarily needed since I already have a 401K and 401A)

My question is, should I be putting the majority of my money into my Roth and 401K and less into my 403B/mutual funds, or should I allocate them all somewhat equally?

Thanks (and Flagpole Willy need not respond!!!)

Who needs to keep money in retirement vehicles for the long run? Just spend all your money as soon as you get it, close your eyes, cross your fingers, and wish REAL HARD. I'm sure you'll have enough then to retire on.

and again, the shit-head responds when specifically asked not to.

go back and stare at yourself in the mirror some more, willy. grownups are talking here.

Financial Advisor wrote:

Please do not listen to any advice you get on the internet regarding this subject. I am a licensed financial advisor, and most of the people have NO idea what they speak of. They are either slightly off, or completely wrong. The best advice I can give is to speak with a QUALIFIED advisor regarding IRAs.

I once talked to a licensed financial advisor. His advice was that I give him 2.5% of my money every year.

Thanks for your answer, confused as usual.

Flagpole, you just HAVE to respond to everything, don't you?

Bump for malmo and kaitanan or anyone else who wants to chime in on my question above.

sigh... wrote:

and again, the shit-head responds when specifically asked not to.

go back and stare at yourself in the mirror some more, willy. grownups are talking here.

Oh don't get your panties in a bunch. If he (or you) can't take a little joke then I don't know what to tell you.