Sure you can. The limits are individual to each account and depends on which year you contribute for the max. They just bumped them up.

Oh nice! So it was good timing on this video :) Thanks for watching!

I agree. I live in RI. These north east states like mine and yours have crazy taxes on everything. I plan to move to Florida and become a resident when I retire. Why people would retire up here is silly

Yes sir! We offer Roth IRA's as well. Keep us in mind and thanks for watching!

Jazz Wealth Managers is the "back door Roth IRA" still possible? The income limits are way too low for people in high cost states.

@@anthonyc362 You can do simultaneous "Roth 401k", "mega backdoor Roth 401k" (if your employer plan offers it) and "backdoor Roth IRA" simultaneously, for a total of $63000 per year.

If you need to look poor on paper for whatever reason. Most assistance programs are means tested. Income contingent repayment plans for student loans use AGI to determine payments.

Once you reach retirement age of 59.5 you can withdraw from a Roth 401(k) and Roth IRA tax and penalty free.

Yes you can take put rollovers tax and penalty free, but you have to wait five years after the rollover. Five years after the rollover, the rollover is seen as a large contribution.

thank you for this question. i was wondering the same thing. if i am under 59.5, and i leave my job, can i rollover my roth 401k to roth ira and be able to withdraw the funds that were originally in my roth 401k penalty free because it is seen as a contribution? how is this possible if the roth ira contribution limit is 6,000?

As of now yes. Thanks for watching!

If you are your highest salary and don't expect to reach a higher tax bracket while working, the answer is no. It is more important to contribute the max of ($19,500 + $6,500 =) $26,000 to your 401(k).

You may contribute $19,500 to Roth/traditional 401(k) and $6,000 to Roth/traditional IRA. It would be better if you could contribute max to *_both._*

Q1 No Q2 Yes

TIB1973 , You can do it now if you have your Roth IRA opened, you don’t need to wait until you retire. No penalties on transfers. I’ve been doing it for several years already. But I would call your investment firm and clarify.

My bad.. literally just read a comment on this. Sounds like this is a legal and viable strategy. Thanks!

Certainly one should see which is better for them though just because you are retired doesn't necessarily mean a lower tax bracket. Thanks for watching!

Maxing out a Traditional 401(k) will put you in the highest tax bracket in retirement.

@@JasonBuckman yes I would also think so, especially if you think your total 401k retirement value will be over $1 million. The annual RMD on that will likely prevent you from getting into a significantly lower tax bracket. Otherwise if you think your bracket will be about the same, definitely Roth has more advantages over traditional.

Sure can!

Yeah. You can open up a brokerage account with Schwab and do that

Yes you can. As for the account type it really depends on what you are looking for and what you think about your retirement. I like the Roth option myself but unable to give you a specific answer without knowing more. Thanks for watching!

Karim Elmoutawakil For me the Roth is better because I can keep my MAGI low and qualify to pay zero for healthcare until Medicare starts.

@@blackworldtraveler3711 the Roth 401k will not lower your AGI/MAGI

PAT AND Yes it will. I just didn’t say when. I have a $160k a year salary and lower my MAGI enough by taking off 3-4 months a year without pay to qualify for full Roth IRA contributions. I own and live in upper middle class gated condo community in Tulsa with total living expenses of $1400/mo. Another condo on Marco Island with total living expenses of $1600/mo. my ExxonMobile dividends pays. I’m retiring early and will be keeping my MAGI below subsidy cliff at about $30k-$40k/yr to qualify for zero to $150/mo. healthcare premiums instead of $1200-$1400 a month(and lower taxes zero to 10% )blending my pension,savings,qualified dividends, passive income,and 17 year emergency fund. My Fidelity Brokerage Link 401k was 1.5 million 6 months ago. I had since done a IRA rollover and now have around $500k pretax IRA and 1.7 million Roth IRA. So at 59 1/2 ..... Now the Roth kicks in! 😎😃👍 I will continue to keep AGI low until Medicare kicks in. Medicare part B and prescription premiums are based on your MAGI. So at 65 I get Medicare and will keep AGI below $85k. I will start my social security income payout at 65 or FRA.

Steven G yes sir! Thanks for watching!

Jazz Wealth Managers Can you make a video about early retirement and the best vehicle to use to invest money to do that? And what's a "ladder"?

Steven G thanks for the suggestion! Added to list

@@Jazzwealth When you rollover from a Roth 401k to a Roth IRA, can you withdraw the full amount of the rollover tax free? Or does the Roth 401k's "growth earnings" percentage carry over as well? Put another way, from the perspective of the Roth IRA, is the rollover just seen as a large contribution?

If your plan is to retire and roll over the ROTH 401K into a ROTH IRA, then be advised that the 5 year rule starts then. My recommendation is to open a ROTH IRA at least 5 years before you retire. As long as you have earned income you can either contribute to the ROTH or if you make too much then maybe contribute to an IRA and then convert the IRA to the ROTH. Pro rata rules may apply, but work with your CPA or your CFP before implementing.

It depends on your tax situation, however I can make a case for Roth contributions no matter what. If you make a lot of money (400K single or 500k joint or more for example) I can see many cases where lowering your AGI today is beneficial. However, the math shows that choosing the roth option in many situations is advantageous especially if you don't fall into those categories. It is ideal to lower your tax rate into retirement, therefore even if you make substantial income today, you may want to just bit the tax bullet now. It really depends on your situation but in most cases the Roth works out better.

Choose the regular IRA over the Roth. The money will usually be in a lower tax bracket in retirement. In a regular IRA you keep the tax money and get income from it.

Bob S not always I have a family friend he told me that he regrets not getting a traditional 401k because the taxes eats up all his contributions

@@bobs182 I don’t disagree with the tax bracket but you are missing a big component. GROWTH. Let’s say you put in $100,000 in either the Roth or traditional over your lifetime and average tax rate is 30% in working years and 20% at retirement. Now let’s say that $100k turned into $1,000,000 at retirement. Traditional In a traditional you saved 30,000 in taxes but have to pay taxes on the entire $1,000,000 so your net would be $1,000,000-200,000+30,000 = $830,000 Roth $1,000,000-30,000(forgone tax benefit) = $970,000 Unless you are reinvesting the tax savings it doesn’t make sense to choose traditional over roth. Because yes you are getting the tax benefit on your contribution but the majority of your portfolio will be growth. Why pay tax on the majority of your portfolio. If you are putting more into traditional vs Roth upfront because of the tax benefit up front we can do a better analysis. However most people put the same amount regardless.

@@iptvclub1575 Let's say you have $143,000 to put in an IRA You put the 143K in a regular IRA or you pay 30% taxes and put the $100K left in a Roth IRA. Using your growth of 10X you would have $1,430,000 in the regular IRA and $1,000,000 in the Roth. In retirement you will start at the bottom of the tax bracket each withdrawal year instead of being on top of the bracket from being employed so likely you will be paying no more than 15% over all of the amount you take out each year. You will have $1,220,000 after taxes from the reg IRA and$1,000,000 from the Roth.

Yes, once you leave you can withdraw from your Roth 401(k) and at any time from a Roth IRA. However if you want tax and penalty withdrawal from the Roth 401(k) you should first deposit it in a Roth IRA that's been opened and funded at least 5 years ago.

@@alrockyAnthony, if you are 55 PLEASE do NOT do that. Once you open a Roth IRA, the 5 year rule begins again so you would have to wait another 5 years. Also, 401ks have a 55 provision which states that you can take funds out at 55 if you meet certain criteria. IRAs DO NOT have this provision so you will be screwed until 59 1/2 until you are able to take out tax free or 5 years whichever is longer. Ideally, if you are 55, you claim yourself as "retired" by your 401k and then take withdrawals from them since you likely have already satisfied the 5 year rule and will meet the 55 provision per the IRS.

@@wnagle1985 Roth 401(k) earnings withdrawals from 55 to 59½ still aren't considered qualified. The penalty is waived, but they will be taxed.

Math is correct.

@Nick. Not sure how old you are but you should seriously consider putting aside some monies into a Roth IRA. Even 1k a year. Whatever you can. I don’t think you will regret it. Just remember for regular 401k we are all taxed on the growth. For Roth no tax even on the growth.

@@f430ferrari5 been contributing to Roth last 3 years 😁👍

@@CelticsWin7 nice! 👍

Drackkor , If you invested your $$ into some funds that give you a good return, I wouldn’t touch it. What I did, In addition to 401k, I opened a Roth 401k and chose to invest say 10% of each pay check to 401k and 10% to my Roth 401k. I change the %% according to my current goals. He didn’t tell, but at the same time you can open a separate Roth IRA account and start contributing up to $7K each year. You can do it if your MAGI is lower the certain amount - I consulted with our financial advisor at work and he calculated the MAGI for me. Even if it’s high, you can still open it using so call “a back door method”. The Roth IRA have way more options to invest aggressively! And one more thing, periodically, you can transfer $$ from your Roth 401k to your Roth IRA for better investment options. But I have to call the firm and ask to do it for me because somehow we cannot see how much is in Roth 401k.

@@rubyus7332 I have a traditional Roth IRA I do the max which is 7000 a year. My plan going forward is to do my matching with a Roth 401K and leave my traditional alone and not move it.

Drackkor , You are doing great already! Continue to invest in Roth IRA yearly and to 401k up to your company match (to keep your taxes low) and if you can start Roth 401k and invest say 5% - 20%, whatever you can at certain point.

Drew RR You 401k must not be self directed because I see no other reason to roll it over unless you are retiring next year like I am and doing a partial in service rollover.

Which "IT"? The IRA or 401(k)? Roll the Roth 401(k) to Roth IRA?

After retirement move Roth 401(k) to Roth IRA to avoid RMD.

@@alrocky , thanks. I was just wondering. Because I have have paid the taxes , so why would you have a RMD?

@@TravelingTheWorld1993 (Traditional) 401(k)s have RMD as reminder that it's time to use it to live on *_and_* so gov may have tax revenue. Afterwards Roth 401(k)s were introduced and that legacy RMD remained in place as there was no need to update or remove RMD for Roth 401(k) since investor can simply roll Roth 401(k) to Roth IRA to escape RMD.

Now you have my attention sir How did you do this? Who's the knight in shinning armour? I am slowly giving up on all of these

@@malvinalemire9628 Sir? It's funny cos I'm a lady or doesn't it suit the "narrative"? It takes quite some level of patience and "Nancy Lynn Lewis" is the "knight", she was in the news alot in 2018. You can check her out online for more.

@@planetsaver Low Blow right there ma'am. You didn't have to pull the gender card. Wasnt necessary. Thanks still. Ill check her out

@@malvinalemire9628 Wow I know this little lady. Once attended a seminar she was also in attendance here in Texas,, Great speaker. I still think the 401k or putting it in a high yield savings account is the more reasonable option, given the economy,,

There's no age limit for Roth IRAs. You can contribute past age 70 if your income isn't over the limit.

Sorry you get that impression. Some comments we are not allowed to respond to thanks to SEC regulations :(

@@Jazzwealth it would have been nice if you answered the 2 question below mine from 7 months ago. The video doesn't really explain things very well

But then I would have to come up with 5 things to know hahaha. Thanks for watching!

Jazz Wealth Managers touché

It's a retirement account. You take it out at retirement.