SEP IRA and retirement in general

Respectfully, this is wrong. You can withdraw 100% of your Roth IRA contributions anytime you want to, tax free. You are only taxed if you withdraw your gains from your Roth IRA. The only thing is, once you withdraw your contributions you can't add them back in for the fiscal years contribution limit.

For example, if you have already contributed the maximum $6,500 to your 2023 Roth IRA account in January, but on February 01 you wanted to withdraw that $6,500 because you wanted to gamble at the casino (you don't need a specific reason), then you would not be taxed by withdrawing that $6,500 but you could also not contribute any more money to your Roth IRA until the 2024 fiscal year has started (because you already maxed out your Roth 2023 by contributing $6,500 at the start of the 2023 fiscal year).

Roth IRA Withdrawal Rules

In a 401k yes, there's a 10% penalty if you withdraw before 59.5 years old and for a Tradtional Pre-Tax 401k, that includes both contributions and gains from the account(s).

I use Target Retirement Date Index Funds for both my 401k and Roth IRA. Set it and forget it, I have another 30+ years until retirement so it doesn't matter what the month to month or even year to year returns are. Over the long run, it will hopefully work out. If worst comes to worst, hopefully I'll at least break even in some kind of doomsday scenario where there are 0 gains in the stock market 30+ years from now.

For my Roth I use Schwab, they have extremely low cost Target Retirement Date Index Funds, easy to use website and very good customer service.

 

blairandgretchen , Like your ideas about land , you could let it sit or make money for you while it is already going up in price. You can't go wrong with real estate. This is just me , but I do not like the idea of anyone else doing anything with my money. Nobody does anything for nothing , guaranteed if they have your money they are doing something with it that I could be doing and keeping whatever they may take. OK , maybe going in with others you can get a bigger return but you are losing control and a lot can happen in five years, even if nothing does really happen. I don't get how some companies go belly up , a bank ? Someone is on the take ,but thats all a dif subject. I have not had any renters problems like you , knock on wood. A low overhead with the least problems land and build storage buildings. People have too much stuff . Can't go wrong and nobody to wreck the place , if they don't pay ......auction time. The younger you start like Tibbs is smart, if you can swing it. You just can't lose with real estate. Everyone stay safe out there. We need you.
Something for everyone to check out auction dot com. If you watch it and keep up with it you can get land , houses , apts they have it all , and you can acquire real estate for much less than you would ever think. All with a click of your mouse LOL. I am not affiliated with it , except using it like anyone else. SO keep warm and safe. You are appreciated <3

 

Not sure what you mean about exceeding the limit on a 401k. When I retired 5 years ago the limit was around $18k. Also being over 50 you can add at least $6k catchup. Then to add more if you’re an S Corp you can match up to 25% of your salary. That would add another $6k based on your listed salary.
As I said I retired 5 years ago but I was putting $30k a year into my 401 for 12 years. Diversified stock investing with a growth tilt. Even after last year losing over $350k that account is over $900k now.
The stock market, gold, land or any other investment does not always go up. One thing about the stock market is that tomorrow I could sell every stock in my portfolio and have the money available in a few days. Buying land is a good idea for a portion of your investment but the lack of liquidity would keep me from putting over 20% into it.

 

You should check into a SIMPLE IRA. This has a $14k max contributon (I believe it will be going up to $15k in 2023) and it isnt a percentage of your w2 payroll. Your low salary will hinder a SEP contribution because that is a 25% of salary max. Between the SIMPLE and maxing out a Roth IRA, should do what you are looking for.

ETA: You can also get the business to kick in a percentage which will benefit you personally and the business with a write off.

 

You can buy into REIT's via a 401K or IRA, my Roth IRA invested in 8 different holdings, 1 ETF, 2 stocks and 5 REIT stocks. REIT stocks are great as part of an IRA, I've got one that pays $.06 per month dividend, I currently own 170 shares, but each month it adds 1.4 shares (and increases) each month, and by the end of the year will be adding 2.4 shares per month. Another REIT stock pays $.25 per month, but the stock is $70/share, I own 66 shares, so it will be awhile before the monthly dividend is equal to a full share.

As for how bas the market was depends on what you were invested in and how long you plan to be in. I have one stock I inherited back in 2017, since then it's doubled in value, but in the last year it's lost 35%, but I'm still up 65%. Per my fidelity account, year over year, in the last two years, I'm currently only down 10.85%, which is an improvement over being down 17.8%.

The stocks that I buy, I'm after the dividend, don't really care how much they gain in value. At present, my 8 stocks pay $130/month in dividends, but I've got 10 yrs till retirement, as these dividends rollover, and add shares, by the time I retire, it's estimated I'll have $1,200 a month in dividends coming in.

 

Do you mind sharing what the stock tickers the REIT's you buy are?

And when you say this:

Do you mean that your 8 stocks (1 ETF, 2 stocks and 5 REIT stocks) are bringing in $130 per month altogether, or is that 130 X 8 = $1,040 per month?

Also, again if you don't mind sharing, roughly how much money do you have in each of those 8 stocks to be bringing in that kind of money?

 

I have a couple of 401k from when I previously worked company jobs and a partial pension from when I was a steelworker.

Most of my money has gone into other investments. I like index funds personally and usually buy and hold. I occasionally make some changes to my holdings when my financial advisor recommends them, but that is fairly rare.

I also own a piece of a diesel repair shop. This is mostly a hands-off operation for me and is managed by my business partner. This is probably the best investment that I have made. However, it is only a good investment because my business partner is awesome at running the shop. I wouldn't trust running the shop to anyone else and will sell off my chunk if and when he decides to exit the business.

I am not a huge fan of things like 401k plans. I don't like the restrictions on withdrawals they come with. I want to remain fairly liquid in case a good investment comes up, like the diesel shop I bought into some years ago. I also plan on being mostly retired long before I would be eligible to withdraw from those accounts without penalty so they are not the best option for me. I started investing early so I could retire when I was young enough to enjoy it and I intend to do just that.

 

We operate a SIMPLE for the LLC' and it’s exceedingly simple to set up and operate. Even better, with the latest changes in the law, we can now offer a ROTH version.

Biggest drawback of the SIMPLE is the 3% company match limit. For people trying to push as much as they can into tax deferred retirements, the SEP has far more generous limits.

 

The 8 stocks are bringing in $130 per month combined at this time, over time they will continue to increase the amount they bring in each month. Since I don't need the money, the dividends roll over and reinvest each month/quarter and help to grow each stock/fund.

I change up REIT's every so often, I recently cut back on stocks to move some money to CD's, but previously I was in: AGNC, DX, O, RITM, PSEC and a couple others. I've sold off AGNC and DX and the other two, the money from those REIT's is going into CD's for a few months. Before investing, do your research, not every stock is right for everyone.

 

Come on Blair, fine art and pull-tabs is where it's at.