401k Help

^Of course, or don’t work at all. But the amount withdrawn from the 401k is considered income, so whether or not it is taxed at a lower rate is also a function of how much is taken out.

He’s in the UK, so not all that surprising.

100% serious

When I 1st started my career I remember overhearing one of the senior guys complaining about being over the £1m mark in his pension (and the resultant tax humping that happens after that amount in the UK) and thinking that it sounds like a crazy number but when you’re getting >20% paid in annually it really isn’t.

Also, just to bring even more of a UK viewpoint. Do you guys not factor in buy-to-let property to your retirement planning?

Pokhim, my man, amirite6?

Yep. But if you do this before retirement age you’d get hit with penalties. The way to do this while working is when you change jobs, roll your 401k into an IRA, and then backdoor Roth the traditional IRA. I know a couple people that did this while they went back to school for their MBA.

You’d have to be an idiot to purposely drop your income to withdraw from a retirement account. If you are temporarily unemployed, go back to school, or have some way of deferring income, that is different of course.

im going backdoor bros. F Uncle Sam.

Yes, absolutely.

Or when you are over 50, got pushed out of your field and become permanently underemployed

+1

But, as a tax accountant, I have seen a lot of people do really stupid things with their money.

EG - One guy came in this year to file his taxes. Apparently we hadn’t done his return in eight years or so. It wasn’t a big deal, because he was due a refund in all of the eight years, so there weren’t any penalties.

“Why didn’t he file?” you ask. “After all, he’s getting money back!” The answer is simple–he didn’t like Obama, and refused to file taxes until Obama left office. He lost about $60k because of that.

(True story)

^ I’m hoping that he saved the taxpayers $60k in refundable tax credits.

Now that you mention it, other Texas people have told me they know people who don’t file tax returns for all kinds of reasons, but most commonly something like “I don’t recognize the government”, which I suppose is similar to the Obama thing. I guess it is a thing there.

^ I believe those folks refer to themselves as sovereign citizens. They don’t recognize the legitimacy of the US government, but seem to be okay with the court system because the sue people left and right.

Who has an HSA? Max that right after your company match. Tax fee in- tax free out. No one uses it.

^I use it every year. And since I actually have some medical expenses, it’s a great benefit.

this right here

Yeah HSA is legit. Mine currently only offers VTSMX and a shit load of active options for fixed income but hard to complain about tax-free money. Once the balance grows out of the immaterial range I’ll adjust accordingly in my other accounts AA wise.

Also kr already mentioned HSA earlier in the topic.

Yeah, I HSA. Will need something to pay for my medical care when Medicare goes bankrupt.

So you don’t get your health insurance fully paid for and you have to pay into a savings account to cover healthcare costs?

Do you use it right away? I don’t have HSA myself but I heard the common practice is to pay out of pocket but keep the receipts. Then invest HSA aggressively for 30 years tax free and then use it up using old receipts. Sounds kind of crazy to me