Roth IRA account

[Flaber]

Hello Everyone

I am thinking to open a IRA account(Leaning more towards Roth IRA)..do you think Roth IRA is a good idea? Also I am think about opening an account In vanguard..Can we hold 401k and Roth IRA accounts simultaneously? Any tax benefits with Roth IRA? Which Index funds should i look into as a beginner? Any additional information or suggestions would help..Appreciate for your help again!

[Lorry_Driver]

roth is a good idea if you are already maxing out deferred tax accounts

and you cannot directly deposit into roth if your AGI is > 140K (single) or 208K (married filing jointly). you can still do it via backdoor though

you can have 401k, traditional, and roth in same (or different) brokerages

for index funds there are many options, like VTI and QQQ (or equivalent like FTEC)

[idibezwada]

why do you want to do roth instead of traditional?

[Flaber]

27 minutes ago, Lorry_Driver said:

roth is a good idea if you are already maxing out deferred tax accounts

and you cannot directly deposit into roth if your AGI is > 140K (single) or 208K (married filing jointly). you can still do it via backdoor though

you can have 401k, traditional, and roth in same (or different) brokerages

for index funds there are many options, like VTI and QQQ (or equivalent like FTEC)

Thank you

[Flaber]

9 minutes ago, idibezwada said:

why do you want to do roth instead of traditional?

I am not sure..I was just thinking to do Roth

[DuvvaAbbulu]

1 hour ago, Lorry_Driver said:

roth is a good idea if you are already maxing out deferred tax accounts

and you cannot directly deposit into roth if your AGI is > 140K (single) or 208K (married filing jointly). you can still do it via backdoor though

you can have 401k, traditional, and roth in same (or different) brokerages

for index funds there are many options, like VTI and QQQ (or equivalent like FTEC)

Roth IRA ki salary sambandham ledhu 

[Lorry_Driver]

6 minutes ago, DuvvaAbbulu said:

Roth IRA ki salary sambandham ledhu 

"High earners who exceed annual income limits set by the IRS can't make direct contributions to a ROTH IRA."

https://www.investopedia.com/ask/answers/042214/how-can-i-fund-roth-ira-if-my-income-too-high-make-direct-contributions.asp#roth-ira-income-limits

[Pavanonline]

49 minutes ago, idibezwada said:

why do you want to do roth instead of traditional?

Roth is better on long term as no taxes on gains.

[Pavanonline]

7 minutes ago, DuvvaAbbulu said:

Roth IRA ki salary sambandham ledhu 

There is but there are ways to go around the limits.

[rmJU72]

If you are still making less than max allowed salary for Roth IRA, definitely contribute

https://www.schwab.com/ira/roth-ira/contribution-limits

contribution priority list:

1. 401k pre tax

2. HSA (pre tax) or FSA pretax as applicable. Also DFSA if you have little kids going to daycare and wife also works.

3. Roth IRA if salary below max salary limit

4. Individual trading account

5. Contribute to after tax 401k and convert to Roth (in-plan Roth conversion in 401k). This is usually offered only by some employers.

[idibezwada]

46 minutes ago, Pavanonline said:

Roth is better on long term as no taxes on gains.

depends...with traditional you will be growing your unpaid taxes as well

[Lorry_Driver]

9 minutes ago, idibezwada said:

depends...with traditional you will be growing your unpaid taxes as well

good point, only for people who can deduct traditional ira, but high earners cannot and the (backdoor) roth is the way to go

another advantage of roth is you can withdraw contributions without penalty (after 5 yrs)

[phatposts]

1 hour ago, rmJU72 said:

If you are still making less than max allowed salary for Roth IRA, definitely contribute

https://www.schwab.com/ira/roth-ira/contribution-limits

contribution priority list:

1. 401k pre tax

2. HSA (pre tax) or FSA pretax as applicable. Also DFSA if you have little kids going to daycare and wife also works.

3. Roth IRA if salary below max salary limit

4. Individual trading account

5. Contribute to after tax 401k and convert to Roth (in-plan Roth conversion in 401k). This is usually offered only by some employers.

If salary is low - I would put Roth on the top and then 401k.

Low income periods lo ROTH is much better than 401K in the long run. 

[rmJU72]

don’t prioritize taxable (Roth ira) before pretax options. why pay the govt when u can pay urself first.

[Pavanonline]

2 hours ago, idibezwada said:

depends...with traditional you will be growing your unpaid taxes as well

I didn't understand, how are unpaid taxes "growing".