Withdrawal calculator

[westbranch]

That's interesting.

I was told by many that you are subject to pro-rata rules if it is inside of a financial vehicle and you try to pull it from there prior to 59-1/2 using 72(T) or Rule of 55...

Pro-rata rules apply mainly to backdoor Roth contributions and nondeductible traditional IRA contributions/withdrawals.

With Roth withdrawals they come from contributions first.

 

[Bonasababy]

Pro-rata rules apply mainly to backdoor Roth contributions and nondeductible traditional IRA contributions/withdrawals.

With Roth withdrawals they come from contributions first.

Rollovers 2nd. Earnings last.

 

[Bonasababy]

I had a college finance class where the professor showed the math on saving from age 25-35 beating the person saving from age 35-65. My wife and I started contributing 10%+ in 2012 at age 23/24. We were making $70,000 gross household income, rent was $600 a month in small town midwest. We lived like kings!

Amazing what the compounding has done in the last 14 years. Actually dropped contributions quite a bit for 2026 to cover some home projects. I want more flexibility in our mid to late 50s so don't want too much in the tax deferred bucket. Good problem to have.

Don't let these thing dissuade folks from thinking they can't start ramping up that % later in life. I occasionally run into people who say they weren't able to do much in their early getting started years and think they missed the boat and can't retire until full SS age. Starting late is better than not starting. And for many, expenses slow down in the last 15 years or so. If yours are low enough there's an increase in how much you are allowed to contribute starting at age 50 I think.

With 3 kids we never hit 10% for a decade or so. Really ramped it up after the kids were gone from the house. Retired a bit early, my wife at 62. Pension made a real difference though, and will continue to for the rest of our lives.

One strategy I like came from a work colleague. Has three adopted kids, but they are able to make it work....every raise take a portion to increase your contribution rate.

And regarding paying off that mortgage--there is peace of mind in that, but if it's at a lower rater than avg. returns in your retirement account, better to put more away for retirement than try and pay it off early.

 

[Steiny77]

Don't let these thing dissuade folks from thinking they can't start ramping up that % later in life. I occasionally run into people who say they weren't able to do much in their early getting started years and think they missed the boat and can't retire until full SS age. Starting late is better than not starting.

Yep !
We really didn't save much until about age 35. Typically peak earning years are 45 to 65 so you can really put away the savings.

Getting debt free early is a big boost also. Helps a bunch if you don't have stupid car payments or a mortgage to pay.

 

[Mallardsx2]

This is not true at all. You can withdraw your contributions (not earnings) after a five year period.

I was referring to the Roth 401 (K) See below.

 

[sigpros]

If a guy wanted to get the most from a ROTH IRA you just started with approximately 8 years before you retire what ETF would you guys look at? I am in SCHG now but just started it

 

[SAJ-99]

If a guy wanted to get the most from a ROTH IRA you just started with approximately 8 years before you retire what ETF would you guys look at? I am in SCHG now but just started it

SCHG seems fine as long as you know you are making a growth bet and half of the exposure is in tech. Most of my Roth core holding is in SPY so I don't have to look at it. Mostly just make sure you fully fund it if you can.

 

[Bonasababy]

Boy at this point it's hard to pick any winners IMO.

Tech exposure is often a lot of AI--under huge attack right now. And tech has always been about the winners and losers. If you have it, is it diversified enough to insure some winners remain?

The election will flip states and congress--would effect will that have on them?

Interest rates going up, costs going up, national debt going up, the money makers seem more than ever tied to a system designed to make them happy--when that goes away what happens?

I think being well diversified and not having a majority of your money in anything you aren't completely sure of is the way to go if you will be retiring or needing the money within the next decade or so. If you have more time than that have at it--but hang on!

 

[Robg2]

If a guy wanted to get the most from a ROTH IRA you just started with approximately 8 years before you retire what ETF would you guys look at? I am in SCHG now but just started it

I don't disagree with the others, but this something you should talk with an advisor with, or do a lot of studying. How you build your IRAs depends a lot on your circumstances and needs.

A large growth fund like SCHG might be appropriate for you, but it would be totally inappropriate for me because I have specific liabilities that need to be met with my Roth over the next eight years. I have these liabilities covered with TIPS, which are government bonds. The rest of my Roth money is in a stock ETF. I'm going to let that ETF money ride - if it returns 10%/year that's great; I can use it to dodge taxes in my 70s. If I lose money it's no big deal because I have other resources.

How likely are you to lose money over a (short) eight year period? Maybe more than you think...
SCHG is very similar to the S&P500, which can be modeled on the ficalc.app page mentioned earlier. If I did it right, you won't even beat inflation at the end of the eight year period about 1 out of 7 times. One in 5 times you won't even beat a super safe TIPS bond yielding 2.5% real. However, half of the time it will have increased by more than 75%, which is huge, and those are inflation adjusted dollars!

So in other words, those types of ETFs are a bet where you stand a real chance of losing money. The probabilities of losing money decrease if you hold onto the fund longer.

 

[sigpros]

A question for the experts here. I am close to maxing my pre tax 401k. I get no match at all from my employer. I am able to do a Roth IRA this year and I just started one with Fidelity. Would I be better to back my 401K contributions back a little and max the Roth? Also my wife started a Roth too so we are trying to fund both of them. I guess what I am asking is would it be better to fill those buckets first then go back to my traditional 401K?

 

[Bonasababy]

The question of Roth vs pretax hinges on a number of things.

First though does your wife have an employer match? That should be the first priority to max.

After that it hinges on expected tax bracket after retirement. For many its lower then than while working. Might be better to max out the 401 then...but if there is no match you should evaluate the options in that plan. Both long term performance and fees. Fees add up over the years and if high you might be better off starting a personal IRA from a large low cost mutual fund company.

Often workplace plans have lower than retail fees though.

If you expect to have a lot more in your retirement fund than a typical withdrawal rate of 3-6% and want to keep it invested into your mid 70s and older, Roths have no required minimum distributions, 401s and 403b's do have them.

Everyone grabs onto the fact that you pay no tax on Roths taken normally...but forget to take into account 401s reduce your taxes today. And your balance builds faster with pretax than roth...

Also keep in mind any retirement sources that arent taxed at all or at a lower rate in retirement...specifically some pensions and social security in some states may pay no or greatly reduced state taxes.

Some of both is what we did. While our taxes are lower in retirement, Roths are ideal for funding sudden large expenses in retirement.

Your can always switch funding strategies later and you can convert to Roth later too, but that too takes some thought.

 

[sigpros]

My wife has no match or employer plan. These are both Roth Ira we started with fidelity. She doesn't have any kind of retirement plan at all except for the roth we just started. At 62 I will have a $1400 a month pension. Before 62 it is like $3300 but gets cut when I can start drawing SS. If I draw or not. And yes I will be in a lower tax bracket when I retire. Just looking at the best option for retirement and to hopefully leave a little for the kids one day

 

[brymoore]

Lower tax rate at retirement would direct you to pretax 401k first. Where doesn’t matter between wife and you. Fill yours and then have her fill hers. Do Roth once both pretax 401k are full.

Personal opinion, not advice.

 

[sigpros]

My wife doesn't have a 401k her employer doesn't offer one. So what options does she have? We do have health care through my job. I should have my 401 maxed this year still even doing some roth ira contributions

 

[brymoore]

Without doing more research on my side, I’d still finish pretax 401k and then roths.

I’ve never messed with the HSA accounts beyond health care uses. Others might have better HSA advicez