How to maximize taxes, pre-tax accounts, etc

[Mbekweni]

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The other major thing about 401k that I just recently started to appreciate is tax drag. A balanced portfolio of worldwide index funds will have a yearly dividend of 2% or so. Depending on your state and tax bracket that equates to 0.5-0.8% tax drag per year which doesn’t apply in a 401k compared to a regular taxable brokerage account. Add that to your returns over 30 years and you get an extra 13% in your retirement account in 30 years and 21% at the end of a 30 year retirement if the compounding continues (will be a bit less given RMDs)

But also check your 401k fees. My 401k through my physician group has a flat fee of $200/yr for balances under 500k and $500/yr for balances over that. I have a private solo 401k that has a flat $150/yr no matter the balance as well and that allows me to do mega backdoor Roth. If I didn’t need that would be free. Just looked into my wife’s company as they charge 0.53% of AUM to operate the 401k +$40/yr. Still worth the tax savings up front but that makes a BIG difference over the years especially if you also get a poor set of fund choices. She was in the fence about sticking around for them but this could be the last straw and could quit to pull out the funds and roll over rather than continuing to work there per diem (she found a better solo gig recently).

 

[Brigade4Radiant]

The good thing about 1099 is that you can choose your insurance and 401k.

I have Vanguard and I pay low fees

 

[Fox800]

Loren

Loren D Stark Company
ldsco.com
I've used them for the last 6 years and have no complaints.

Had terrible customer service from them. Multiple phone calls and e-mails trying to start a DBP went unanswered so I gave up and moved on to other companies. Would not recommend.