Stock Market & Retirement Planning

Talking about the stock market, earning per share and all that goes into the market. I get it mostly, but I don't have to cash to play and that sucks. I'm in my matching 401K and work, and I put in $100 a month, but I don't feel like that's enough. Granted, I'm young and I'll ride it out until retirement, and that's probably around 25 to 30 years out so I have time. I'm just thinking, what else could I do with the limited side money that I DO have, and that's really limited.
Start diversifying your income buckets... The 401k will all be taxable money when you retire. As Aaron said, contribuing to a Roth IRA (tax free withdrawals at 59.5) is a good way to invest also. Mutual funds where you don't have to think about it much can be had for as little as $50/mo automatic investment. Find yourself a low cost/low expense fund with an appropriate risk tolerance.
 
and just like that my gains in Netflix vanished... woo
I had my grandma buy LGND at 93 not long ago...it just hit $125 and she refuses to sell it. She's very stubborn.... ? Her catch phrase is "Let Er Ride"!
 
Nice. I haven't flirted with biotech in 10 years.
Yeah the past two I've had her buy popped! ZS Pharma doubled bc it's being bought out and LGND seems to have a great portfolio of products now and in the future. I like to take profits though. Haha!
 
Talking about the stock market, earning per share and all that goes into the market. I get it mostly, but I don't have to cash to play and that sucks. I'm in my matching 401K and work, and I put in $100 a month, but I don't feel like that's enough. Granted, I'm young and I'll ride it out until retirement, and that's probably around 25 to 30 years out so I have time. I'm just thinking, what else could I do with the limited side money that I DO have, and that's really limited.

Most people need to save younger and try to save 10-15% of their income to make the retirement math work.

$100 per month into a 401K with 100% company matching is a good start but here is how the math works out: you will have $357,000 at a 9% rate of after 30 years. After taxes and inflation that's only about $150,000 in todays dollars. At a safe rate of withdrawal of 3.5% that is $437 per month to spend in retirement.

Put another way, if someone was retiring today with what most would consider a lot of money, let's say $1.5 million, that would safely provide about $4,300 per month worth of income.
 
Most people need to save younger and try to save 10-15% of their income to make the retirement math work.

$100 per month into a 401K with 100% company matching is a good start but here is how the math works out: you will have $357,000 at a 9% rate of after 30 years. After taxes and inflation that's only about $150,000 in todays dollars. At a safe rate of withdrawal of 3.5% that is $437 per month to spend in retirement.

Put another way, if someone was retiring today with what most would consider a lot of money, let's say $1.5 million, that would safely provide about $4,300 per month worth of income.
Goof stuff, but thanks for ruining my day! lol

Seriously though, I knew it would need to be more but what is the max per year you cab put in? Is there a max?
 
Goof stuff, but thanks for ruining my day! lol

Seriously though, I knew it would need to be more but what is the max per year you cab put in? Is there a max?

I believe max 401k contributions for this year are $18k unless you are age 50+ when you can contribute and extra $6,000 per year in "catch up" contributions. Roth or traditional IRA contribution limits I think are $5,500 per year per person and $6,500 if you're over 50.
 
Jay - Ric Edelman's general answer is that you can retire thirty years after you start saving. As someone much closer I wish I had started earlier and I tell my kids:

- at least get the company match
- take 1% or 2% of each salary hike and increase your 401(k) contribution. In a high-tax state like the People's Republic of New York, for a moderate income earner, $100 pretax is like ~$73 posttax. Do it when the raise comers and you will not miss it.
- spend some time with your company's 401(k) prospectuses (prospecti???) to be sure a) you have a broad selection of good funds; b) no more than 10% of your allocation is in company stock; and c) the fees are good (below average for that fund AND that asset class. Courts have held that employers have a fiduciary duty to give employees good choices in their 401(k)s, and some well-known companies have been taken to court over this - and lost.
- as for a Roth vs Traditional, there are three schools here. One says you will be in a lower tax bracket now than at retirement, so the benefit of paying taxes now is greater. A second school says you can't trust the government to keep their grubby paws out of your pocket and that the promise to keep Roth withdrawals tax free will be broken, like the Social Security promise, etc. In other words, a deferral now is better than the promise of tax free tomorrow. A third school ran a series of Monte Carlo simulations and says there is no difference between the two - none.

Tahoebum is correct about the contribution limits. There are AGI limits beyond which the benefits of a Traditional or Roth contribution phase out, and there are separate limits on 401(k) contributions for "highly compensated employees." If either of these applied to you, you would know about it. These are designed to prevent the 1% from getting richer (where is the emoticon for tongue in cheek?)
 
There are AGI limits beyond which the benefits of a Traditional or Roth contribution phase out, and there are separate limits on 401(k) contributions for "highly compensated employees." If either of these applied to you, you would know about it. These are designed to prevent the 1% from getting richer (where is the emoticon for tongue in cheek?)

Of course you can get past the AGI limits by what is called a "backdoor Roth IRA" which means contributing to a traditional IRA and converting it to a Roth IRA. My wife and I do this each year and it's completely legal but a little more complex.
 
Good point by you - another one of those things that you usually know about if it applies to you.
 
Of course you can get past the AGI limits by what is called a "backdoor Roth IRA" which means contributing to a traditional IRA and converting it to a Roth IRA. My wife and I do this each year and it's completely legal but a little more complex.
Use the backdoor Roth for a lot of our clients. Certainly a little complexity to it, but if you qualify and are in the right tax bracket, fantastic option.
 
Something I may need to look into
There are some stipulations so work with your cpa to make sure you qualify. Worth it if you can though.
 
There are some stipulations so work with your cpa to make sure you qualify. Worth it if you can though.

Yeah after this tax season we are gonna chat about how to bring down taxable income, invest more for retirement but leave me with some cash on hand
 
Yeah after this tax season we are gonna chat about how to bring down taxable income, invest more for retirement but leave me with some cash on hand
Cash is king and always nice to have available....especially when life or thp events happen ?
 
Hey Girard, remember when we talked about NFLX a few weeks ago and I said it was complex. It wasnt.
 
They are talking further growth and I am not sure I see it with election coming and uncertainty around that. I might start pulling a few things if they hit their numbers.
 
Oh NFLX. Looks like I'm stuck with you a bit longer.
 
Oh NFLX. Looks like I'm stuck with you a bit longer.

It is an interesting one for sure. I am surprised with more people cutting the cord everyday, that their earnings aren't reflecting that.
 
It is an interesting one for sure. I am surprised with more people cutting the cord everyday, that their earnings aren't reflecting that.

My gut says people that are cutting the cord right now (early adopters) were already subscribers.
A couple of weeks ago, I had this thought on what number to jump out. Would it be the APPL that runs and runs (until recently) or would it be Blackberry, that was first, best and then fizzled.
 
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