Google and every AI keeps telling me to max out my Roth, but I’m not convinced.I have about 150k in my brokerage and 50k in my Roth. I have 22 years to save.Why would I have 7k a year into my Roth when I can dump 15k into a brokerage? Why would I split it up? I’d just wind up with a smaller amount, even after the 15% capital gains tax.But all the research I do just screams at me to max out my Roth. I feel like I’m taking crazy pills.
>>61942799You do know a Roth IRA is just a type of account right? You can invest the money in it like a regular brokerage account.
Llms can't look into the future, only extrapolate from past data. Their training data is not yet aware of the genocide
>>61942799AI doesn't know how to think. Also, if it's trained on the internet, all it "knows" is everything every dogshit financial advisor, shill, and redditor regurgitates. If you can't understand the rules regarding each account, the tax code, and how it all will work for your specific situation, AI isn't going to help you.
>>61942806Duh.But the point I’m making is I have significantly more in my brokerage. And I can continue to dump way more into it year over year.My Roth is a third of the size and I’m limited in my yearly investments.I’m better off dropping 14k a year into my brokerage than splitting it 7k/7k. The regular brokerage will compound much higher than the Roth.
>gets 2010 bail-in law'dThanks for playing, goy
>>61942799basically normie advice for poors that assumes you wont have more than 7k extra to invest per year. the compounding advantages from tax-free withdrawals are good & you can manage a Roth IRA as risky as you'd like but the killer is the contribution limits. a much better strategy using a brokerage would be utilizing some margin (1.1x-1.6x) to get greater exposure while buying VOO and other ETFs/single stocks "forever" and ONLY doing sells after 1 year to qualify for long term capital gains. every one immediately assumes you're going to daytrade like a total retard and be all short term capital gains when you mention a brokerage over IRA account.
>>61942832The opportunity for a roth is to get money in when you are paying a zero tax rate....maybe 10/12% but for sure 0%.You can set up your kids very well with a roth. If you have a family business, you can pay them up to the standard deduction totally tax free and they can max out a roth with money left over. If you also have a good 401k plan you can get even more roth bucket and push the deductions higher.There is a small window of income where you would put money into a pre-tax ira before roth, but unless someone else is supporting your it's not really practical the way the numbers work out. You'd rather take your 401k match and hsa first and you don't have much left over. The income limit for Roth is practically unlimited because you backdoor after a certain point. In this case you're taking Roth because you're not even allowed to take pre-tax.Lastly, you can roth convert your pre-tax accounts. Let's say you get to age 50 and your brokerage account is big enough that you're living off margin or just qualified dividends. You can start roth converting pre-tax ira up to your deductions. Even if you take social security at 62, that's 12 years you move money into the roth to avoid ever paying tax on it.You can also split up your pre-tax iras and do a combination of roth converions, 72ts, and another "normal" account.
>>61942799Some Roth advantages...- tax fee growth and withdrawals (at a certain age)- you're free to withdrawal your contributions at any time without penalty, although it's not a good idea- you can exit winning trades and enter into new positions without having to pay capital gains- you can buy foreign stocks without having to worry about things like pfic, foreign dividend calculations, etc.The last two are big for me
>>61942799>letting some other nigger "manage" your money Lole, lmaoe
>>61942903I have the options of 401k, but not a Roth. Additionally, 401ks and IRAs are subject to RMD, which a brokerage avoids.
>>61942799Because Roths are tax free you dumb idiot.>inb4 - I'm not gonna pay taxes on capital gains regardless.Okay if you can avoid being caught.
>>61942832>The regular brokerage will compound much higher than the RothThe Roth will compound at a higher percentage rate than your regular brokerage account
I'm only doing company match with a trad 401k. Not interested in anything else. "Investments" into stocks is a jewish casino tour. I'll invest in shiny rocks instead.
>>61942979Explain? Two account investing in the exact same things, but one starting at 50k and the other at 150k. It’s not like a Roth gets some magical higher return percentage.
>>61943001youre both on some fucking girl math horseshit tbhfam...just put your shit in a target fund and don't even check it if this is how you do financial analysis
>>61943001So you never change your positions? You never receive dividends? Nigga the only problem with a Roth is that you weren't just dumping 6k into it 10 years ago.>Muh 7k nowIf you're making enough money where you EVEN THINK about 7k then why are you even here? You put the money in, you don't worry about taxes and shit, and you just grow it.
>>61943022Taxes
>>61943073Very rarely. I keep most of my brokerage in Vanguard funds; it’s more of a set it and forget it kind of thing.My Roth is absolutely more actively managed, as I hold just stocks in it. I have also bought options in it as well. But is your tax free, limited investment account really where you want to be playing the risky trades?I understand the benefits of being able to sell without tax in a Roth, but if you are like the retards on here and play the market like a casino, you’re going to burn through your contributions. And those are contributions you cannot just replace.
>>61943001The only reason to not utilize a tax advantaged account, such as a roth ira, is if you legitimately plan to retire very early and lean enough that you must utilize all of your funds to do so before retirement age for those accounts.>$14k in a standard brokerage account>$7k in a standard brokerage account, $7k in a roth ira>$7k in a standard brokerage account, $3.5k in a roth ira, $3.5k in a traditional ira>$7k each in two different brokerage accountsEvery permutation means you have $14k invested in VOO compounding identically.From this, again assuming you will not need all of your money before "retirement age," you should be maxing out tax-advantaged accounts at every opportunity. As an additional consideration, if there is an employer match for one specific vehicle, then that would beat anything else.A Roth account protects your retirement years by guaranteeing a tax free income stream which is useful if 1) you will retire utilizing so much money that it would result in more taxes paid later on than while you are currently working or 2) the government decides to become a socialist hell-hole and tax the shit out of you by retirement age.A traditional IRA protects your retirement years by reducing your current taxable income by the amount you place in it this financial year. This could bring you below the next tax bracket wasting less of your money, or simply reduce the amount paid in the current tax bracket and effectively giving you "more" to invest right now (It will all compound the same, but if you can only budget out $6,500 in a Roth or $7,000 in a traditional IRA because of the immediate tax benefit then you would realize an advantage in compounding on the additional $500 you managed to save from avoiding taxes today).Baseline, use tax-advantaged accounts first, then put the rest in your standard brokerage account.
>>61943148It’s like you retards keep ignoring the starting amount in each account.I understand all the tax advantages, but saving 7k on a Roth starting at 50k and saving 7k in a brokerage starting at 150k will ABSOLUTELY yield less than just dumping the entire 14k into the 150k brokerage for the next 20 years.This is assuming you invest in the same thing in both accounts.And IRAs are fine, but you are going to have to deal with RMD, something Roth and regular brokerage avoid.It’s just a numbers game. Yeah, you lost out on the tax free shit, but your 150k is going to snowball much faster than 50k. Again, this is assuming you just park your money in vanguard funds and never move it. Your gains will easily beat the 50k Roth, even after the 15% capital gains tax.It’s just basic math.
>>61944198It can't be possible to be this fucking retardedYou realize that the same investment compounds the same no matter how it's placed, right? If you had 100 accounts of $1 each, that would be equivalent to 1 account of $100.Putting $100k into a regular account and $50k into a roth ira will give you the same gains as $150k into a brokerage, except now you pay less taxes on that $50k.
Roth IRAs are great if you are dividend maxxing, no extra taxes on those dividends
>>61944198Can't tell if you're trolling but let me try to help here. Lots of good answers in this thread as well. >but saving 7k on a Roth starting at 50k and saving 7k in a brokerage starting at 150k will ABSOLUTELY yield less than just dumping the entire 14k into the 150k brokerage for the next 20 years.I'm not following here. How would $7k grow differently if you chose the exact same investment? I'd say the roth would grow more all time because you don't pay tax on the eventual withdrawal. >And IRAs are fine, but you are going to have to deal with RMD, something Roth and regular brokerage avoidFyi a Roth is an IRA, so you would still have to deal with RMDs after age 60. They are tax free though and they aren't really hard to deal with. It's just minimum distribution you are required to take. You can also change this and take it all out over a few years. > Yeah, you lost out on the tax free shit, but your 150k is going to snowball much faster than 50k. Again, this is assuming you just park your money in vanguard funds and never move it. Your gains will easily beat the 50k Roth, even after the 15% capital gains tax.Did you really just compare a $150k principal versus $50k and are confused why the former will end up with a larger balance? Maybe you are trolling. Here's an idea, why don't you keep the two buckets. This way you can strategically time your withdrawals later in life. You'd want to take more roth distributions in years you have higher other income as the roth is always tax free and won't increase tax rate. And then in years with lower other income you can take more from the taxable account as your cap gains rate will be lower. Right now in the US a married couple can take up to like $90k long term capital gains and it's exempt from tax if they have no other income.
I'm with you OPi make too much money to contribute to a roth, and a traditional IRA is just garbage. I'd rather pump 10k per month into my brokerage (i'm already maxing my 401k and HSA)also those trump youth accounts are garbage.
>>61944756>Fyi a Roth is an IRA, so you would still have to deal with RMDs after age 60Roth IRAs don't have RMDs unless you inherit it.
>>61944224>It can't be possible to be this fucking retardedIt is...this dumb fucking nigger started a thread on biz about a topic he could have easily googled. But apparently he didn't like the results. There is no compounding here...but CUM pounding in this dumb niggers asshole.
