UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next
Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75781  
Subject: Re: How Should a 25 Year Old Self Empoyed Invest Date: 8/6/2011 11:45 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
If you are single and might someday be married with kids and a mortgage you could be in a lot lower tax bracket then. Single people can get to the higher tax brackets pretty quickly.

I would stick with the deductible retirement accounts until you build up a pretty good start on your nest egg. Just like the kids at the mythical Lake Woebegone that are all above average, many people worry about being so wealthy in retirement that they have will be in a high tax bracket but realistically most people will not be wealthy when they are retired which would make putting $7,500 in a deductible 401K preferable to $5,000 in a Roth after paying $2,500 in taxes.

In the long term the right answer to the question “Roth vs a Deductible IRA” question is probably to do a mixture of them so that you can minimize your taxes in retirement depending on the details

Until you get a year of two of you income saved up in your retirement accounts sticking with one of the low cost targeted retirement funds(like 2050) will be just fine and give you good diversification. After you have more money saved up you can worry about fine tuning your asset allocation
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

Clorox Isn't Cleaning Up
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement