2021-11-15, 06:21 PM
Diversify is not a good option for high gain. You only want to that 3 years before you plan to withdraw. Let say you have 100k and plan to withdraw 10k/year, then you want to diversify 50% to low risk so you know it's safe for the next 5 years that won't lose much if market crashes.
By the way, forgot about Roth: 401k Roth has been introduced for a few years but not all companies have this option.
-Recommend is to use regular 401k for tax deduction first then put a few in 401k Roth
-If salary is high and no option for tax deduction, then all the way for 401k Roth for better return with no tax
-If your company has two plans:
--401k tradition and 401k Roth: max out combine
--Either 401k tradition max or 401k Roth max
I usually look at the tax bracket and see how much I want to pay tax each year if I want to max out contribution. At 15% tax, living is pretty tight. At 22%, it's more relax. 30% tax is like middle class, more extra cash available per month. If you do your tax return every year, then it's very easy to figure out.
Beside 401k tradition/Roth, you can open IRA Roth where you can contribute $6000/year. I start this late and is able to gain 90% after 12 years. The best part of Roth is no tax on capitol gain.
Right now, I am taking advantage of max out 401k Roth since I am no longer get much tax deduction and all in 100% for midcap. I have leave the international as it for 10 years where it doesn't gain much in 20 years. Small, Mid, and Large are well return where Mid has been always the highest return.
![[Image: 401k-contribution.png]](https://i.postimg.cc/C15kM2D7/401k-contribution.png)
Don't know if I miss anything in here, maybe someone else can explain more with their knowledge.
Property investment is not a good idea such as renting. Most people are looking what they get in per/month but they don't see other problem and issues. If you buy a rental property for 500k, and turn around to sell for 700k in 5-10 years, then I would call that the best investment. Otherwise, renting income is not the best benefit to earn extra income. Selling rental property would subject to tax too.
By the way, forgot about Roth: 401k Roth has been introduced for a few years but not all companies have this option.
-Recommend is to use regular 401k for tax deduction first then put a few in 401k Roth
-If salary is high and no option for tax deduction, then all the way for 401k Roth for better return with no tax
-If your company has two plans:
--401k tradition and 401k Roth: max out combine
--Either 401k tradition max or 401k Roth max
I usually look at the tax bracket and see how much I want to pay tax each year if I want to max out contribution. At 15% tax, living is pretty tight. At 22%, it's more relax. 30% tax is like middle class, more extra cash available per month. If you do your tax return every year, then it's very easy to figure out.
Beside 401k tradition/Roth, you can open IRA Roth where you can contribute $6000/year. I start this late and is able to gain 90% after 12 years. The best part of Roth is no tax on capitol gain.
Right now, I am taking advantage of max out 401k Roth since I am no longer get much tax deduction and all in 100% for midcap. I have leave the international as it for 10 years where it doesn't gain much in 20 years. Small, Mid, and Large are well return where Mid has been always the highest return.
Don't know if I miss anything in here, maybe someone else can explain more with their knowledge.
Property investment is not a good idea such as renting. Most people are looking what they get in per/month but they don't see other problem and issues. If you buy a rental property for 500k, and turn around to sell for 700k in 5-10 years, then I would call that the best investment. Otherwise, renting income is not the best benefit to earn extra income. Selling rental property would subject to tax too.