ESTES Express (5 Year Review)

So far going well at OD. FIRST week truck broke down they paid us $31 HR for 9hrs brought us another truck and kept moving. Only did 5200 miles last week check was $2500 gross. This week on pace to do 6k miles so definitely a better week. They haven't bothered me at all just learning their system is all but im getting the hang of it.

 

The match is the same, regardless of standard or Roth 401k. But since the Roth 401k is pretaxed and the match is not, the match at 3.5% of your gross wages (as long as you do the minimum 7% or more weekly) is held in the standard account. I'm getting too old to do the Roth 401k and see the benefits as much as somone who is younger. So I opt to remain all standard and max out my 401k every year, which keeps me below a higher tax bracket. Once I retire, soon, and have no income, I will begin to rollover my standard to a Roth at a lower tax bracket annually.

 

Oh no I don’t mean lazy we didn’t just open them that way because we were Teamster’s, we opened them that way because of how Columbus loaded our freight.

It was about the only way it could be opened.

And better believe when that sucker cracks open, you better look out

 

It depends, the advantage of a Roth is that all capital gains are tax free when you go to take a distribution, no RMA's required (required distributions). So, the big advantage is time. The more time, the bigger the tax advantage over a standard account. All capital gains in a standard account plus contributions are taxed as ordinary income upon distribution. Plus, as law dictates now, you are required to take distributions (called RMA's) on standard at the age of 73. So depending on the size of your standard IRA, and how quickly you can offload it to a roth IRA in a tax advantaged way, how early of an age you retire before taking Social Security, how long you wait to take Social Security, maximize at 70 is best if you think you will live longer. All play a factor.
In a nutshell, if I was 50 or younger, I would do the Roth IRA only and maximize it for the best tax advantage, put it all into the Fidelity S&P 500 index. Over 50 to say 55 I would do some combination of 50/50. After 55, all standard. This is a rough guess and I'm assuming you are maximizing your contributions every year, which you should be doing. If not, then the numbers change.

 

That's okay but if making 100K a year, that's only 15k contribution. You are short changing yourself, up the contribution level to the max, if over 55 that is 30,500, under 55 it is 23k. So 23% for under 55, 30.5% 55 or older. Keep in mind you need to do 7% to maximize company contribution on a weekly basis. So you need to adjust your contribution to end the year with at least 7% on the last pay period for the year. Yes, it's a pain in the arse that this is the way they game it.
Then you still can do an IRA outside of the 401k, 7k under 50, 8k 50 or older. You should also be doing this.
Then if that wasn't enough, do the HSA contributions, which is better company contributions than the 401k percentage wise, matching the first 1k contributed, maximize this for the even better tax benefits ( no SS or medicare, in addition to state or federal). Max contribution amounts vary depending on age and family members or single.

 

I will add this. Upon retirement, my goal is to roll over as much of my standard IRA/401k into a Roth IRA before 70, when I plan to start taking my Social Security, so not to have SS taxed on large RMA's at 73. But not all of it. Leave about 150k to 200k in a standard IRA and each year take out 15k tax free, your standard deduction amount.
In the hierarchy of accounts I want to leave till last used, it goes like this.
1. Roth IRA, it's the king
2. HSA, all medical expenses (keep records) can be taken out tax free, but don't do it till late late in life, then take it all out at once. Meanwhile allow capital gains to accumulate. Anything leftover is like a standard IRA with no RMA required. So it's even better.
3. Standard IRA, this I will deplete first. To a degree, tax advantage wise.