Investing for retirement advice, !!!!IMPORTANT MUST READ!!!!

[hmgROCK]

I wish you would explain difference between ROTH IRA vs. traditional IRA

I explain in my original post
It all about tax

Roth IRA, you pay tax now and than any gain in the future is tax free as long as you are 59.5 years old.
1. So you work and get a paycheck.
2. Your money get tax... federal, state(if your state does it), social security, medicare tax
3. The net income get deposit in your bank
4. The money you get in your bank has been tax
5. Invest that money in a ROTH IRA and get tax free money
6. It’s good for poor people because our tax rate is low
7. If you have a lot of kids. You get it all back when you file your tax anyway
8. Good for poor people making less than $100k


401k, traditions etc...
1. You work and get a paycheck
2. Uncle Sam don’t tax you
3. Just your social security and Medicare tax
4. And state tax depending if they do it or not.
5. It will be in line 12b in your w2
6. When you take it out later in life
7. Than they will tax you
8. Rich people can’t do ROTH Ira unless they do a backdoor
9. This is mostly for high income $100k++++

Again
Ain’t trying to BS
Trying to help all my brothers and sisters
Play the white man game and be rich like them
In the long run

[hmgROCK]

Roth IRA, 401k, tradition, etc....
Are just retirement accounts

You need to put money in it and invest.

We invest in a low cost index because we get to own almost all the stocks
Instead of one stock

So if one stock goes belly up and bankruptcy
We still got 4k++++ other companies
In the long run we will be rich
Because index only goes up

DO NOT BUY SINGLE STOCK
For example: use all your money to buy Facebook
If Facebook tank, you lose all your money
You need diversity

Get some tech, energy, healthcare, etc...
That’s why we buy index

Look at my original post
I make it dumb proof for y’all
Just pick a date that meets your retirement age

[w1s3m0n]

I wish you would explain difference between ROTH IRA vs. traditional IRA

ROTH IRA - Pay uncle Sam now so you don't have to pay uncle Sam later.
Traditional - Pay uncle Sam later.

Suppose you are young and you make 50k.  Your effective tax rate is probably 30%.  Do you pay now?  Or do you pay later?

Scenario #1: You are rich, and will withdraw with an effective tax rate of $38%.  By taking the Roth IRA, at the end of the investment period, you're effective tax rate is 8% less.  If you had traditional, you will have a higher effective tax rate of 38%.

Scenario #2: Suppose you didn't save enough and are now very poor.  You take out just barely something to make ends meet.  Your new effective tax rate is 15%.  You have overpaid on your taxes if you had gone Roth IRA and so in this case the traditional IRA is better.

The government NEVER lose money because they do the actuarial science.  Deferred tax with traditional IRA reduces the overall government budget.  With a time-span of 30 years, using the rule of 72, and a modest 7% return, the taxes you paid with roth IRA would have TRIPLED.  Using a positive scenario, the roth IRA performs slightly better.  In a negative scenario, the roth IRA performs worst.  It's all SITUATIONAL and if you stick to a strategy plan.  Likewise, is buying a house better or worst?  Traditionally, buying a house is better because it is a force saving assuming you live and own this house for at least 15+ years and exit on the height of the economy.

[w1s3m0n]

If you have kids, DO ROTH....

[hmgROCK]

ROTH IRA - Pay uncle Sam now so you don't have to pay uncle Sam later.
Traditional - Pay uncle Sam later.

Suppose you are young and you make 50k.  Your effective tax rate is probably 30%.  Do you pay now?  Or do you pay later?

Scenario #1: You are rich, and will withdraw with an effective tax rate of $38%.  By taking the Roth IRA, at the end of the investment period, you're effective tax rate is 8% less.  If you had traditional, you will have a higher effective tax rate of 38%.

Scenario #2: Suppose you didn't save enough and are now very poor.  You take out just barely something to make ends meet.  Your new effective tax rate is 15%.  You have overpaid on your taxes if you had gone Roth IRA and so in this case the traditional IRA is better.

The government NEVER lose money because they do the actuarial science.  Deferred tax with traditional IRA reduces the overall government budget.  With a time-span of 30 years, using the rule of 72, and a modest 7% return, the taxes you paid with roth IRA would have TRIPLED.  Using a positive scenario, the roth IRA performs slightly better.  In a negative scenario, the roth IRA performs worst.  It's all SITUATIONAL and if you stick to a strategy plan.  Likewise, is buying a house better or worst?  Traditionally, buying a house is better because it is a force saving assuming you live and own this house for at least 15+ years and exit on the height of the economy.

Yup

I like to add something
Trump sign a tax cut last December
Majority of Americans are going be paying a lower tax for the next ten years

You probably notice your net income  paycheck increase a little

Roth IRA is good for poor people
You owe Uncle Sam $0
You get almost all of them back when you file your tax