I paid off my student loans and I don't feel like a huge idiot. What's next, invest?

[mentos]

So if I got this right for young single person making 100k:
1) Max 401k
2) Max hsa
3) Pay off student loans
4) Max ira/roth?
5) After that, open vanguard low etf index fund and put $X amount in per month?
6) wait 30 years
7) retire easily with plenty of $$$ to mess around with

Don't forget to save a 20% downpayment for a house if you don't have one.

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[WVUPharm2007]

So if I got this right for young single person making 100k:
1) Max 401k
2) Max hsa
3) Pay off student loans
4) Max ira/roth?
5) After that, open vanguard low etf index fund and put $X amount in per month?
6) wait 30 years
7) retire easily with plenty of $$$ to mess around with

Good plan.

 

[trailerpark]

Does mega backdoor roth apply to chain pharmacists yet? I found an older thread that said CVS,Walgreens,WM 401K plans don’t let you. Any change yet?

 

[pezdispenser]

Does mega backdoor roth apply to chain pharmacists yet? I found an older thread that said CVS,Walgreens,WM 401K plans don’t let you. Any change yet?

Walgreens does allow Mega Backdoor Roth.

 

[samven582]

I'll be done this summer. With student loans payed off, thinking about a career switch or pharma

 

[Dreamer716]

Yes I already maxed out my personal 401K with $19,500. I’m going to do a backdoor Roth IRA for 6K. Learned how on YouTube using Vanguard. Need to wait a few days for the funds to hit. Then doing a personal account that I will put in 1K a month, I guess.

Can you elaborate on this? Kinda confused how to go about it for first time. Does it have to be all at once or once every 2 weeks.

 

[mentos]

Can you elaborate on this? Kinda confused how to go about it for first time. Does it have to be all at once or once every 2 weeks.

How to do a backdoor Roth IRA? You just contribute to a traditional IRA then convert it to Roth after the funds clear. It's easiest to convert the 6k all at once.

 

[Dreamer716]

How to do a backdoor Roth IRA? You just contribute to a traditional IRA then convert it to Roth after the funds clear. It's easiest to convert the 6k all at once.

Is there a way to do it bi-weekly?

 

[mentos]

Is there a way to do it bi-weekly?

You could but I don't know why anyone would want to do that. That would be a pain in the ass. Just convert the $6k and be done with it.

 

[mentos]

Yup, and if you want to dip I. Slowly during these times you can convert and slowly buy.

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Yes you can always convert the 6k to cash in the Roth and DCA slowly. I think that's what you said.

 

[trailerpark]

Yes you can always convert the 6k to cash in the Roth and DCA slowly. I think that's what you said.

So you can put 6K in a traditional IRA then convert to roth and you can cash out your ROTH 6K contribution, if you need it? But if you left it in a traditional IRA you couldn't do that? Can you clarify that part.

 

[pezdispenser]

So you can put 6K in a traditional IRA then convert to roth and you can cash out your ROTH 6K contribution, if you need it? But if you left it in a traditional IRA you couldn't do that? Can you clarify that part.

You put the 6k in a traditional IRA, convert it ASAP to a Roth, but then you can leave it as cash, for example in the settlement fund or a money market fund in the Roth. You can then invest it in stocks or index funds when you are ready or DCA.

Making an early withdraw of a backdoor Roth contribution is quite complicated. There is an order in which you must make withdrawals that determines if you are taxed or subjected to a 10% early withdrawal penalty. But to make a long story short, generally only the earnings from when the 6k was in your traditional IRA before you converted it to a Roth, will have a 10% penalty but no taxes if you withdraw within 5 years. That's why you put the 6k in just a money market fund in the traditional IRA and you convert it ASAP to a Roth so that it only earns a few pennies in interest. Anything less than $0.50 will be rounded down to 0 so that there will be no taxes or penalty.

 

[NITRAS]

Does mega backdoor roth apply to chain pharmacists yet? I found an older thread that said CVS,Walgreens,WM 401K plans don’t let you. Any change yet?

The things I've read stated it would hard for company 401k plans to have non-deductible contributions and in service transfer and not violate the means test for highly compensated employees. You pretty much have to have a solo-401k to do it.

 

[RedROSE]

What should I do with my rollover IRA? Keep it a separate account or transfer it my 401k plan?

 

[pezdispenser]

What should I do with my rollover IRA? Keep it a separate account or transfer it my 401k plan?

If you want to do a backdoor Roth IRA, you have to transfer all traditional IRAs into your 401(k). Otherwise, any Roth IRA conversions that you do have to be taken proportionally from the deducted and non-deducted money in your traditional IRA, and you'll pay tax on the deducted portion.

 

[trailerpark]

SMART VESTOR Pros. Fu*k them. These guys take a massive cut for Dave Ramsey and buy lambo for themselves.

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I maxed the 401K and just recently did a backdoor Roth IRA so there's only 6K in it, so how do you apply the 3-Fund portfolio when each of the 3 funds have a minimum of 3K initial investment?

I picked
VTSAX (US stocks)
VTIAX (International stocks)
VBTLX (US bonds)

Do I skip the bonds the first year and buy 3K VTSAX and 3K VTIAX? If either dropped below 3K would that mean I would get kicked out of the fund all together?

 

[Momus]

I maxed the 401K and just recently did a backdoor Roth IRA so there's only 6K in it, so how do you apply the 3-Fund portfolio when each of the 3 funds have a minimum of 3K initial investment?

I picked
VTSAX (US stocks)
VTIAX (International stocks)
VBTLX (US bonds)

Do I skip the bonds the first year and buy 3K VTSAX and 3K VTIAX? If either dropped below 3K would that mean I would get kicked out of the fund all together?

It's fine if they drop to less than 3k.

I have a treasury money market account there with $200 balance. To open, you need 50k for that. They let you keep it once you open it.

You can do it however you want, but work towards your asset allocation % until all 3 funds are funded.