Comments on: Max Out Your 401k Math http://evolutionofwealth.com/2009/09/max-out-your-401k-math/ Helping People Find, Keep and Enjoy Their Money Tue, 20 Dec 2011 16:21:36 +0000 hourly 1 http://wordpress.org/?v= By: Evolution Of Wealth http://evolutionofwealth.com/2009/09/max-out-your-401k-math/comment-page-1/#comment-921 Evolution Of Wealth Mon, 04 Oct 2010 16:43:19 +0000 http://evolutionofwealth.com/?p=273#comment-921 Dave: I was trying to keep the math simple for people to follow by looking at one year contributions only. It was my attempt at making things easier for the reader to follow. I didn't want people to get caught up in the math or big numbers. Thanks for your input. Dave:

I was trying to keep the math simple for people to follow by looking at one year contributions only. It was my attempt at making things easier for the reader to follow. I didn’t want people to get caught up in the math or big numbers. Thanks for your input.

]]> By: Dave http://evolutionofwealth.com/2009/09/max-out-your-401k-math/comment-page-1/#comment-920 Dave Thu, 23 Sep 2010 10:00:50 +0000 http://evolutionofwealth.com/?p=273#comment-920 Dude, you are mistaken in your math. 16,500 at 30 years at 7% is 16,500 x 10 = 165,000 x 2 = 330,000. So after the first 10 years you would have 330,000. Assuming you continued contributing 16,500 per year at 7% for the next 10 years would be 330,000 + 165,000 = 495,000 x 2 = 900,000. So after 20 years you would have 900,000. Now for the last 10 years you continue contributing 16,500 per year and assuming you continued to get 7% return would be 900,000 + 165,000 = 1,065,000 x 2 = 2,130,000. It's called compounding interest my friend. That's a big difference from the 132,000 you said. That would be if you just contributed 16,500 and stopped contributing. Your initial 16,500 would be worth 132,000. Good day Sir. Dude, you are mistaken in your math. 16,500 at 30 years at 7% is 16,500 x 10 = 165,000 x 2 = 330,000. So after the first 10 years you would have 330,000. Assuming you continued contributing 16,500 per year at 7% for the next 10 years would be 330,000 + 165,000 = 495,000 x 2 = 900,000. So after 20 years you would have 900,000. Now for the last 10 years you continue contributing 16,500 per year and assuming you continued to get 7% return would be 900,000 + 165,000 = 1,065,000 x 2 = 2,130,000. It’s called compounding interest my friend. That’s a big difference from the 132,000 you said. That would be if you just contributed 16,500 and stopped contributing. Your initial 16,500 would be worth 132,000. Good day Sir.

]]> By: Evolution Of Wealth http://evolutionofwealth.com/2009/09/max-out-your-401k-math/comment-page-1/#comment-92 Evolution Of Wealth Sat, 26 Sep 2009 14:33:32 +0000 http://evolutionofwealth.com/?p=273#comment-92 So why do you think you will in a lower tax bracket in retirement? Are you just going to be living off of less money? Is that your goal? I think today people live off of less money, not because they want to but because they have to. When I retire I want to be able to golf or travel or just randomly buy the grandkids something or give money to the kids. I want the flexibility and options to be able to do this. So for me it is important to me to balance out or diversify the tax treatments of my retirement monies. The Roth 401k is a huge benefit in helping me do this I also believe that taxes are only going up and I don't like the way a Traditional 401k is passed on when I die. So why do you think you will in a lower tax bracket in retirement? Are you just going to be living off of less money? Is that your goal?
I think today people live off of less money, not because they want to but because they have to. When I retire I want to be able to golf or travel or just randomly buy the grandkids something or give money to the kids. I want the flexibility and options to be able to do this. So for me it is important to me to balance out or diversify the tax treatments of my retirement monies. The Roth 401k is a huge benefit in helping me do this
I also believe that taxes are only going up and I don’t like the way a Traditional 401k is passed on when I die.

]]> By: Jim Bauer http://evolutionofwealth.com/2009/09/max-out-your-401k-math/comment-page-1/#comment-91 Jim Bauer Sat, 26 Sep 2009 14:10:25 +0000 http://evolutionofwealth.com/?p=273#comment-91 Ever since I first started hearing about this new Roth 401k deal I haven't liked it, and here's why. If you pay taxes on the back end (regular 401k) vs. at the front end (Roth 401k), while your principle may be larger simply by default, the amount of money paid in taxes would be greater than had you simply deferred the taxes. Part of this is because you are in a higher tax bracket working. In retirement when you begin withdrawing the funds your income will be less, making your tax bracket lower. Ever since I first started hearing about this new Roth 401k deal I haven’t liked it, and here’s why. If you pay taxes on the back end (regular 401k) vs. at the front end (Roth 401k), while your principle may be larger simply by default, the amount of money paid in taxes would be greater than had you simply deferred the taxes. Part of this is because you are in a higher tax bracket working. In retirement when you begin withdrawing the funds your income will be less, making your tax bracket lower.

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