Another great global stock ETF option… it has got US, Foreign Developed, Emerging. Pair it with a bond fund, and you’re done.
ACWV Low-Volatility All Country World Index ETF. The “low volatility” part is important these past few weeks!
401k’s are a POS in my opinion. They penalize withdrawals before 70 years, make you take RMD, less taxes then increases your tax bracket. You get screwed every way you turn. By the time your old enough to avoid penalties they withhold the tax. You’d be better off investing your money where your return is higher than 3 or 4%.
Actually, I think the Roth 401k is a great option, although companies will put their matching contributions in the traditional bucket so they can take the deduction.
Wait… do you think 401(k) returns are limited to 3 or 4% ?
For many of us, we were nearing middle-age before Roths came into existence, and I for one was a bit slow to get the Roth IRA religion, but I am a convert now.
Especially if the 2017 tax cuts are extended this year, do Roth conversions, because I have a feeling in 2029 we’re going to have a quite different President, and those tax cuts may go away. I’d say we all will have a four year window which will be optimal for conversion.
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Really? What is the penalty for withdrawing before age 70?
Penalties before 70 is news to me, too.
The rule is age 59.5 or after the Roth 401(k) 5 year window expires, whichever is later.
YES… Roth 401(k)s have that darned five year thingy too!!!
“The Roth 401k 5-year rule states that you must have made your first contribution to the account at least five years before making your first withdrawal. If the Roth 401k has been held for 5 years, the entire rollover amount is qualified and will be treated as regular Roth IRA contributions in the Roth IRA. This means that any portion of that rollover can be withdrawn without taxes due. However, any earnings generated after the rollover do not become tax free for 5 more years. The 5-year rule means that 5 taxable years must pass on any Roth IRA or Roth 401 (k) plan before an approved distribution of funds can be withdrawn from the retirement account.”
Hi Nancy,
See below info on www.investopedia.com
@MyCC other posters are simply pointing out that the 70 cutoff you mentioned is not accurate. The correct answer is 59.5 although there is also a Rule of 55 exception for a Traditional 401k that may be of interest to you.