Hes just saying (poorly) that when you have all that money at 63 and you go to make a purchase every single time you do youll endure higher taxes at all areas of finance; an early withdrawal can outweigh the deficit caused by potential tax hikes… the actual withdrawal itself may be tax free but then you need to use that money in a world 13+ years from now when every single tax that exists will likely be higher
You’re completely right, the sad thing is assholes like this have the morons believing everything they say. To the point where they make millions off of them
What happens if they increase the tax rate to 85% by the time you reach age 63? Plus, zero chance you outperform inflation and I can guarantee you have not idea what you’re paying in fees. 401k’s are sneaky government honey pots. As Grant said, “I feel bad for you bro.”
No. Company 401ks are an absolute SCAM 😂 much better options out there. But 100% is better than most. But inflation eats it up vs the percentage it gains every year
401k isn’t the best. But it’s the best option for most people. Most people don’t have the knowledge or discipline to multiply their money. Having a 401k is better than not putting away money and having nothing at 63.
Your annual income will be zero when 65 and you retire dropping your tax rate down to the lowest tax bracket. Assuming you don't withdraw 100s of thousands from the 401k each year to, you'd barely touch the 22% tax bracket, you'd need to withdraw 578k to reach the top tax bracket. 99% of people are better off with just traditional tax deferred 401k. And shouldn't even worry about the taxes that they'll pay later.
This makes the most sense. People don’t have a lot of retirement saved. And when they retire, they will be at the lower tax bracket. Roth makes sense if you start in your early 20’s and allow compound growth at your best years to take advantage of this account
Worrying bout paying higher taxes ...when wishing on taking it out earlier, if did so would lost on alot of compound interest+growth LoL... Terrible advice....
This is assuming that you have no other sources of income when you retire. If you include rental income, brokerage/ money market account interest, short term capital gains, pensions, side job income, social security etc. You can hit the 22-24% tax bracket pretty quick. There for almost 1/4 of your 401k is taxed. Alot of time it make sense to do roth conversion now, plus tax rates are at its lowest its been for a long time.
@@metallica10028 that doesn’t apply to this because the funds are in a 401k being invested, therefore keeping up with inflation. We are on the topic of 401k distributions being taxed.
Roth conversion ladder. 401k> trad Ira roll over > convert x amount (under 43k as of 2024) and pay minimal taxes assuming you are retired and have no or little income> wait 5 years> withdraw paying little to no taxes
Roth 401k would be the way to go for most people. You invest after tax income inside the Roth account, invest it in mostly index stock funds (if you are in your 20s/30s) and watch the money compound tax free, as well as withdrawals after legal age of retirement, are tax-free. If your employer offers this type of retirement plan, at least invest an amount up to what your employer matches as that is "free" money. However, if you can afford it, you should try and max out your annual contributions.
The counter argument is the 20-30% in tax free growth people are missing out on each year. Why pay taxes now if you can grow your money faster contributing more. The baseline 5-10% growth each yr. Is missed. In my case I've monitored my 401k funds carefully. This past month my 1 yr performance is around 28-32% recently.
Maybe in your 20s. But paying maximum tax on your last dollar in your highest earning years when you are funding college education, purchasing a house, ... instead of only what you withdraw years later seems short sighted. It is simply a question of what is the tax on the last dollars earned or withdrawn. And god help you if you went Roth and retire in another country that still taxes your withdraws.
" if your employer offers this type of retirement plan". This plan is part of your total pay package.. you are getting less in your pay every check for 40 years with tons of restrictions on the money.. forget all these government plans . Take the increased money in your check every week instead of these government plans. When you are retired you will be paying more in taxes on these funds
@@Gamerz00760Growth doesn't matter when considering roth vs pre-tax. The only thing that matters is tax rate now vs tax rate in the future. If you don't believe me then do the calculations yourself for the various scenarios.
Roth IRA are tax and penalty free after 59 1/2. That’s both contributions and earned investments. However you can withdraw the contributions part and not the earnings at anytime without penalties or taxes because you already paid the taxes so long as you made sure to file that 8606.
401K is better because you will have 30% more money to invest that can now compound and grow exponentially. Plus when you take it out, you will have less taxes to pay on it(contrary to what is said in the video).
Yeah but taxes is gonna increase each year. Currently it's 8% on everything now if you have a business and stuff you are making money at an older age you will be at a higher tax bracket
Yes a Roth 401k is better in every way. And while they both act the same, the difference is that an employer cannot contribute to your Roth IRA compared to a Roth 401k. It also has a (currently) $23k limit compared to the $7k limit of a Roth IRA contribution limit.
A Roth 401k is not better in every way. What financial expertise or licensure do you have that backs up that statement? I'll give you 3 reasons why a Roth is not better than, or is equivalent to a non-Roth 401k 1. Investing in a traditional vs Roth 401k allows you to save a higher percentage of your income because it reduces your current tax liability, and the power of compounding gains equals or outweighs the taxes you won't have to pay on Roth distributions 2. If you have student loans and are enrolled in a income-based payment program, non-Roth 401k contributions reduces your AGI, which lowers your payment 3. Your tax rate may be lower in retirement than during your working years as your overall marginal tax rate may be lower with a lower retirement income.
I did the math on this. The employer match in a 401k makes up for the taxes I will pay when I withdraw each year in retirement. I will have a bigger account value and much higher after-tax distribution annual income from my 401k due to the employer match than i would have if i contributed after tax dollars into a roth for the same amount of years.
Actually you can never do the exact math on stocks. Your money and your employers money is put into stock plans.Depending on how they do or how the economy is at the time you could get more or less.
It more than covers any taxes. If you have a 4% match from your company equaling $300 a month, your company is putting in $300 a month for a total of $600
@@shotakazehaya-l3vthat’s true but you also have control over which funds you choose. You can slowly shift your port from a high percentage of stock/mutual funds to a lower amount as you get close to when you might start touching the money
So what? You get compound growth for 30 years on money that you normally would have paid to the government. I fully expect to draw less in retirement than what i make, so I will be in a lower bracket. Otherwise just do a Roth and pay taxes now...but somewhere along the line you're paying taxes.
It would put you in a very high tax bracket that one year. When you retire and have no income you can pull it out as your sole income and be in a lower tax bracket. And ensure you max out the Roth
You aren't supposed to take it all out at once. Supposed to take out a bit each year. If you take out the standard deduction amount each year, zero taxes.
For the traditional 401k you defer taxes on your contributions and gains and pay the taxes when you withdraw. For a 401k Roth you pay taxes upfront on your contributions and you pay no taxes on your gains.
What he’s saying is when you eventually pull out the money and put it into an investment at 63, the taxes attached to the investment would be higher. So effectively he’s advising that you don’t let the tax incentive of the growth prevent you from investing in the present. The only problem here is that not everybody has a big chunk of money for a downpayment at the present in order to make the investment in the present. Most people are right to invest in their retirement because it’s a small part of your earned income.
@@chad3558 The very first thing they tell you when you consider a 401K is how the taxes work. Even in your 20's genius. And the age of the apparent idiot being educated in this video was in his 40s. So Lol to the guy who thinks he gets everything, but understands nothing.
After tax dollars, the growth is tax free. Best account most people should focus on investing in heavily. If jobs offer 401Ks with a match (2%-6%+), get that free money and only invest up to match. Rest of your money you can spare, put into ROTH is the move.
Grant means you're paying taxes when you spend the money, and in 30 years the money you're paying in sales taxes is much more than the equivalent today due to higher taxes and inflation
@@HouseOfBrr regular 401k you pay your taxes when you retire. Roth you pay your standard income tax on your contributions the moment you are paid/file your income taxes. You may not pay taxes on it when you retire but you do pay taxes on your contributions while you’re contributing
That statement is nuanced. Using your 401k deductions also put you in a lower tax bracket. So instead of paying 28-36% you can get bumped down to 22% as a married couple. Odds are at retirement age as you withdraw you are going to be doing so at a lower tax bracket.
This is the most regarded advice iv heard. If youre making 75k, youre 1, paying a penalty to withdraw and 2, paying taxes in the 22% range on the withdrawl.
One thing he doesnt mention is you can buy and sell the stocks all you want. For example stock market might crash in the next year as its in a bubble. You can sell now and then buy back in when it hits a low point. You wont pay any capital gains tax which is huge.
You only pay taxes on the amount that you pull out as if it were income. So if you pull out 70k per year, then you only pay taxes on 70k that year. So if you're making 140k today, without putting into your 401k you are absolutely paying more in taxes because your AGI is 140k instead of the 117k that it could be by maxing out your 401k contribution.
Close.... That $70k you pull out is counted as earned income. So, it's really $70k + your regular income = the amount you'll be taxed on. In many cases, this will put you in a higher tax bracket, which means you're paying way more in taxes than what people are anticipating.
I feel like it’s smart to have money in a 401K, but not as your only or main source of retirement savings. In Canada I recommend maxing out a TFSA ($10k) annually, and setting it up where it’s invested into an ETF with dividends reinvested.
I gasped. Vlad… bro… wtf 😂 you pay taxes on withdraw not deposit in a 401k. It’s the least advantaged account. Grant is right even though I hate that guy
“It’s a way for you to be trapped for 30 years” when I learned about money I realized he is 100% correct. There’s a reason rich people don’t have 401ks
Grant is correct. 401(k) is a tax-deferred account meaning you pay no taxes now while your money grows but you will pay taxes when you withdraw the money between ages 59 1/2 - 72 years. If you withdraw before age 59 1/2 you will also be penalized in addition to paying taxes. If you withdraw after average 72 you will be penalized as well. My company is doing 8.5 % match to my 5 % for my 401(k). I’m 54 and I would love to “retire” now so I can rollover that money into an annuity, a safer investment option. I’m praying my 401 (k) keeps performing well.
I was told by an FA friend that Roth IRA is the way to to if you plan on making more money when you retire. 401k is good if you plan on making less when you retire because when you withdraw its taxed at your current or past tax bracket.
That’s mostly right, but it can still make sense to save into a Roth if you expect to make less money in retirement. First, tax rates are likely to increase in the future. Second, many people will eventually pay what’s called the widow’s penalty. Most importantly, after tax contributions are effectively much larger for Roth accounts because the money has already been taxed. In other words, you can save more into a Roth. Lastly, many plans allow for post tax non-Roth contributions with immediate in-plan Roth conversions which function as a way to contribute a total of up to over $70k per year. Don’t necessarily write off Roth savings just because you’re making good money now.
Grant is correct. The best thing for you to do with that money that you put in your 401(k) is to buy a a second property.. by the time you’re 63 that property is going to be worth probably three times what it’s worth and so is the rental income and so is your profitability. And guess what you don’t have to pay taxes because of all the tax write offs on the house like depreciation, etc. the best tax write offs you can get is real estate. I’m doing that now. 401(k)s suck.
That’s y I have all Roth accounts. Roth IRA, wife’s 401k has Roth options, my 457 has Roth options. Paid the taxes going and have tax free growth for 25 years
right, cause per grant the most productive thing you can do for society is own all the homes. fuck being a doctor or engineer and working for what you have and making something productive for the world, just be a land owner.
My company matches 6% plus 4% profit share. I have full control over my 401k in an exchange account. Same as putting the money into the stock market, except my company adds matches. I’ll keep my 401k thanks.
The only reason you should have a 401k is if your employer matches because that's a 100% ROI if you put whatever they'll match. Anything after that you should put into a Roth IRA after paying taxes so you don't have to pay the higher tax rates later down the line. What Grant is saying is 100% right this is just a RUclips short so they didn't go that in depth here.
My company just takes approx $300 bi-weekly from me and puts it into our pension (possibly a defined pension plan or DPP) where they send us quarterly reports of what I will retire with at age 55 or 60 or 65. The maximum money I would get. The minimum. The survivors benefit to my wife or family, etc… I also max out my CPP and CPP2 every year (Canadian pension plan). Also, I’m considering throwing some money into RRSP’s (registered retirement savings plan) as I’d get a tax break as well. However, I’m not certain on the rrsp as I’d like to live frivolously now and don’t need to be extremely wealthy when I retire. Thoughts? - Canada, Ontario.
Depends on tax brackets. Best thing to do for those worried about higher taxes in the future is hedge both tax deferred and after tax Roth contributions. Half annual contributions to Roth and half annual contributions to tax-deferred. Tax-deferred is good unless you are certain your income during your retirement will put you in a high tax bracket; for most, not the case.
Ummm no that’s not about it. You also do not pay capital gains tax which is a big deal vs a brokerage account also dependent where you live some states do not tax income from a retirement vehicle.
The only time its worth it to take the hit is if your like me in 30s and want that 20% + down on a house. The key to being 63 and comfortably retired is having a house paid off, I'm paying on 2 houses. I can retire at 60, draw pension, rent income, and my 401k will be missing 3-4 years of contributions
It’s charged as income tax upon withdrawal. I generally say if you can get a roth401k do it otherwise take the companies match and use other vehicles for investing.
Im 33 and I learned this a few years back I work with someone in their 50s and they barely learned about this. They thought they had a lot of money until they realized they were going to be taxed once they withdrew their 401k
Exactly, I was stuck in that realm of thinking, however it's better than nothing... On the other hand , I think it's best to place it underneath your mattress so to speak
Not saying you should have all of your money in a 401k / traditional IRA,, but paying taxes later mean that you are investing that money and earning compound interest. And it isn't trapped - you can borrow from it at a good interest rate, as long as the money is paid back by retirement age.
Yeah, but you’ll be in a lower tax bracket after retirement. And most 401Ks are invested on index funds which make 10% or more on pre taxed amount. So effectively you will make more money, if you live long enough to enjoy it.
I agree with him for Vlad’s case, An entrepreneur like Vlad should not have a 401k. Without some kind of match from an employer it doesn’t make much sense.
Tax rates will be lower when you retire because your 401k withdrawals will replace your salary, not add to your salary. Also, it is tax deductible when you contribute and it grows tax free while in the 401k.
When it gets converted into an income stream in retirement which is what it is intended - your tax bracket is supposed to be lower because you are not earning as much. For high income earners in these nontraditional jobs 401k may not be the best investment vehicle because they probably will not technically "retire" and on a fixed income
if your company matches your investment, it is like you're doubling your money and then investing it. That's gotta outweigh the time you have to wait for it.
401k is just a tool for people to stay disciplined, most people cannot manage their money if they had full access to it, this guy doesnt give advice for an avg person, his advice is for the wealthy who can invest that money in something and can earn higher returns.
What Grant is saying is yeah you don’t pay taxes when you withdrawal it at 63, however by the time you pull that money out and begin spending it the taxes will be significantly higher then they were before so essentially your still paying taxes it’s just a higher amount in a different way then you’ve trained your mind to believe.
401k withdrawals are not taxable up to $80k/year in retirement. And your next $50k is taxed at 12%. So your effective tax rate on $130k/year in 401k withdrawals is less than 5%. And Roth is completely tax free. How Cardone got as rich as he did is beyond me.
My 401k withdrawls are 100% tax free. It grows tax free. Start maxing out a ROTH at your first real job and you will be a tax free multimillionaire before you are 40.
He’s so out there that he forgets the normal person really just cares that they have money in their old age. Instead all he’s concerned about is squeezing every cent from everything he can.
I 1000000% thought that was a tax free way to save for retirement….. are u telling me I been wrong this WHOLE TIME…I litteraly thought the penalty was taxes ……. Imma have to maybe reconsider my strategy
401k Roth while you're in a 25% or lower tax rate and 401k Traditional when you move above the 25% tax rate. That's it. It's FOR retirement, so you shouldn't ever touch it before your 55 years old (not 63), of 50 if you're a cop or firefighter.
I wish I was blessed with financial literacy and also had a financial advisor. I retired when I heard about it. I hear a Roth account taxes you right away.
Grant wants us to withdraw our 401k and invest it into his course 😂😂
Hes just saying (poorly) that when you have all that money at 63 and you go to make a purchase every single time you do youll endure higher taxes at all areas of finance; an early withdrawal can outweigh the deficit caused by potential tax hikes… the actual withdrawal itself may be tax free but then you need to use that money in a world 13+ years from now when every single tax that exists will likely be higher
He wants you to put it into an annuity like a smart person would do and avoid RMDs
401k Roth better way to go. Thats 100% tax free in the end
Not Roth bro bro. Tax. Freee.
You’re completely right, the sad thing is assholes like this have the morons believing everything they say. To the point where they make millions off of them
My company matches 100% what I put in up to 5% so that's what I do. That objectively is a good investment.
Matching, best investment ever. U r l😮cky
My company matches 10%
Taxes on it will be 35% not worth it
What happens if they increase the tax rate to 85% by the time you reach age 63? Plus, zero chance you outperform inflation and I can guarantee you have not idea what you’re paying in fees.
401k’s are sneaky government honey pots. As Grant said, “I feel bad for you bro.”
No. Company 401ks are an absolute SCAM 😂 much better options out there. But 100% is better than most. But inflation eats it up vs the percentage it gains every year
401k isn’t the best. But it’s the best option for most people. Most people don’t have the knowledge or discipline to multiply their money. Having a 401k is better than not putting away money and having nothing at 63.
Well said. It's good for most.
It's okay but I think it's better than nothing on the other hand it's best to place it underneath your mattress😂
Exactly
Anyone can go to vanguard and open a private brokerage account.
Whats the best way to invest than 401k and IRA?
Your annual income will be zero when 65 and you retire dropping your tax rate down to the lowest tax bracket. Assuming you don't withdraw 100s of thousands from the 401k each year to, you'd barely touch the 22% tax bracket, you'd need to withdraw 578k to reach the top tax bracket. 99% of people are better off with just traditional tax deferred 401k. And shouldn't even worry about the taxes that they'll pay later.
This makes the most sense. People don’t have a lot of retirement saved. And when they retire, they will be at the lower tax bracket. Roth makes sense if you start in your early 20’s and allow compound growth at your best years to take advantage of this account
Worrying bout paying higher taxes ...when wishing on taking it out earlier, if did so would lost on alot of compound interest+growth LoL... Terrible advice....
This is assuming that you have no other sources of income when you retire. If you include rental income, brokerage/ money market account interest, short term capital gains, pensions, side job income, social security etc. You can hit the 22-24% tax bracket pretty quick. There for almost 1/4 of your 401k is taxed. Alot of time it make sense to do roth conversion now, plus tax rates are at its lowest its been for a long time.
It’s not just the taxes. The buying power of 1 dollar will be less. 1 dollar will not buy you a Mcchicken at McDonalds like it used too.
@@metallica10028 that doesn’t apply to this because the funds are in a 401k being invested, therefore keeping up with inflation. We are on the topic of 401k distributions being taxed.
Roth conversion ladder. 401k> trad Ira roll over > convert x amount (under 43k as of 2024) and pay minimal taxes assuming you are retired and have no or little income> wait 5 years> withdraw paying little to no taxes
Roth 401k would be the way to go for most people. You invest after tax income inside the Roth account, invest it in mostly index stock funds (if you are in your 20s/30s) and watch the money compound tax free, as well as withdrawals after legal age of retirement, are tax-free. If your employer offers this type of retirement plan, at least invest an amount up to what your employer matches as that is "free" money. However, if you can afford it, you should try and max out your annual contributions.
Yup. Roth is 100% the way to go
The counter argument is the 20-30% in tax free growth people are missing out on each year. Why pay taxes now if you can grow your money faster contributing more. The baseline 5-10% growth each yr. Is missed.
In my case I've monitored my 401k funds carefully. This past month my 1 yr performance is around 28-32% recently.
Maybe in your 20s. But paying maximum tax on your last dollar in your highest earning years when you are funding college education, purchasing a house, ... instead of only what you withdraw years later seems short sighted. It is simply a question of what is the tax on the last dollars earned or withdrawn. And god help you if you went Roth and retire in another country that still taxes your withdraws.
" if your employer offers this type of retirement plan". This plan is part of your total pay package.. you are getting less in your pay every check for 40 years with tons of restrictions on the money.. forget all these government plans . Take the increased money in your check every week instead of these government plans. When you are retired you will be paying more in taxes on these funds
@@Gamerz00760Growth doesn't matter when considering roth vs pre-tax. The only thing that matters is tax rate now vs tax rate in the future. If you don't believe me then do the calculations yourself for the various scenarios.
It doesn’t matter where you put your money, the government will find a way to take it.
I don't think either of them really understand how a Roth 401k works 😂
😂
They’re talking about a traditional 401 not a Roth 401
He was talking about a 401k… not a Roth IRA
@@curlygirl9023a lot of employers have Roth 401ks now too. That’s what we do so it has the same benefits as a Roth IRA
Facts lol , bro Roth u pay taxes going in not taxes coming out except on the earnings . U can withdraw at age 59.5 lol 😢😂 grant still my guy tho
Thanks for sharing XAI97K and SUI. 💯
SOL memecoins is where the real heat is
Ain’t nobody wanna look into yo bullshit
Roth IRA are tax and penalty free after 59 1/2. That’s both contributions and earned investments. However you can withdraw the contributions part and not the earnings at anytime without penalties or taxes because you already paid the taxes so long as you made sure to file that 8606.
401K is better because you will have 30% more money to invest that can now compound and grow exponentially. Plus when you take it out, you will have less taxes to pay on it(contrary to what is said in the video).
Yeah but taxes is gonna increase each year. Currently it's 8% on everything now if you have a business and stuff you are making money at an older age you will be at a higher tax bracket
Yes a Roth 401k is better in every way. And while they both act the same, the difference is that an employer cannot contribute to your Roth IRA compared to a Roth 401k. It also has a (currently) $23k limit compared to the $7k limit of a Roth IRA contribution limit.
For Roth 401k, it's 59.5 and the roth account has to be open for atleast 5 years.
A Roth 401k is not better in every way. What financial expertise or licensure do you have that backs up that statement? I'll give you 3 reasons why a Roth is not better than, or is equivalent to a non-Roth 401k
1. Investing in a traditional vs Roth 401k allows you to save a higher percentage of your income because it reduces your current tax liability, and the power of compounding gains equals or outweighs the taxes you won't have to pay on Roth distributions
2. If you have student loans and are enrolled in a income-based payment program, non-Roth 401k contributions reduces your AGI, which lowers your payment
3. Your tax rate may be lower in retirement than during your working years as your overall marginal tax rate may be lower with a lower retirement income.
Your video convinced me to invest in XAI97K, expecting 10x gains. Excited for listings!
undervalued project
Much better than all those shits altcoin with no utilities
It is funny that not everyone knows about XAI
XAI will atleast beat LINK
I am so bullish right now
I did the math on this. The employer match in a 401k makes up for the taxes I will pay when I withdraw each year in retirement. I will have a bigger account value and much higher after-tax distribution annual income from my 401k due to the employer match than i would have if i contributed after tax dollars into a roth for the same amount of years.
you use the match and convert it to a roth with no penalty.
Actually you can never do the exact math on stocks. Your money and your employers money is put into stock plans.Depending on how they do or how the economy is at the time you could get more or less.
It more than covers any taxes. If you have a 4% match from your company equaling $300 a month, your company is putting in $300 a month for a total of $600
@@shotakazehaya-l3vthat’s true but you also have control over which funds you choose. You can slowly shift your port from a high percentage of stock/mutual funds to a lower amount as you get close to when you might start touching the money
don't they force you to make your RMDs at 73 you must sell 5% out of your account every year.
“Giggle …:what’s wrong with you ???” Vlad needed that shhht!!!
The guy is right with his first statement.
It is a way to put money IN without paying taxes. Just cant take it out without taxation 😅
So what? You get compound growth for 30 years on money that you normally would have paid to the government. I fully expect to draw less in retirement than what i make, so I will be in a lower bracket. Otherwise just do a Roth and pay taxes now...but somewhere along the line you're paying taxes.
It would put you in a very high tax bracket that one year. When you retire and have no income you can pull it out as your sole income and be in a lower tax bracket. And ensure you max out the Roth
@@penguin12902how much will you have? Because there are minimum distributions so you may be required to take more than you want.
You aren't supposed to take it all out at once. Supposed to take out a bit each year. If you take out the standard deduction amount each year, zero taxes.
For the traditional 401k you defer taxes on your contributions and gains and pay the taxes when you withdraw. For a 401k Roth you pay taxes upfront on your contributions and you pay no taxes on your gains.
Message!! They also make you pay taxes on your social security check. Unbelievable
Bet you Vlad rolling in a brand new Whip. He cashed out on his 401k 😂
What he’s saying is when you eventually pull out the money and put it into an investment at 63, the taxes attached to the investment would be higher. So effectively he’s advising that you don’t let the tax incentive of the growth prevent you from investing in the present. The only problem here is that not everybody has a big chunk of money for a downpayment at the present in order to make the investment in the present. Most people are right to invest in their retirement because it’s a small part of your earned income.
That’s the sell. Grant wants people to take the money they have in their 401K to invest in his syndication
That’s crazy he didn’t kno he’s gonna have to pay taxes on withdrawals. That means millions of people also don’t kno that.
right, because YT videos are never staged. I would bet less than 1% of people over the age of 40 who have a 401K account don't know that.
The only people paying taxes are traditional. You also have to consider rmds.
@@DaveB-w2iLol yeah hey everyone start your 401k’s when you’re 40 and not when you’re in your 20’s
@@chad3558 The very first thing they tell you when you consider a 401K is how the taxes work. Even in your 20's genius. And the age of the apparent idiot being educated in this video was in his 40s. So Lol to the guy who thinks he gets everything, but understands nothing.
Is it the same with roth?
Roth 401(k) is completely tax-free.
After tax dollars, the growth is tax free. Best account most people should focus on investing in heavily. If jobs offer 401Ks with a match (2%-6%+), get that free money and only invest up to match. Rest of your money you can spare, put into ROTH is the move.
No it’s not you literally pay your regular income taxes on that money
@@arijanramku9126on traditional, not Roth as he specified
Grant means you're paying taxes when you spend the money, and in 30 years the money you're paying in sales taxes is much more than the equivalent today due to higher taxes and inflation
@@HouseOfBrr regular 401k you pay your taxes when you retire. Roth you pay your standard income tax on your contributions the moment you are paid/file your income taxes. You may not pay taxes on it when you retire but you do pay taxes on your contributions while you’re contributing
That statement is nuanced. Using your 401k deductions also put you in a lower tax bracket. So instead of paying 28-36% you can get bumped down to 22% as a married couple. Odds are at retirement age as you withdraw you are going to be doing so at a lower tax bracket.
Facts I lost thousands when I withdrew mine after i retired from my job. What they gave me broke me practically even.
This is the most regarded advice iv heard. If youre making 75k, youre 1, paying a penalty to withdraw and 2, paying taxes in the 22% range on the withdrawl.
So true! They get you one way or another
Or both.
One thing he doesnt mention is you can buy and sell the stocks all you want. For example stock market might crash in the next year as its in a bubble. You can sell now and then buy back in when it hits a low point. You wont pay any capital gains tax which is huge.
You can’t put brains in a statue uncle G !! 😂
You only pay taxes on the amount that you pull out as if it were income. So if you pull out 70k per year, then you only pay taxes on 70k that year. So if you're making 140k today, without putting into your 401k you are absolutely paying more in taxes because your AGI is 140k instead of the 117k that it could be by maxing out your 401k contribution.
Only the Roth
Close....
That $70k you pull out is counted as earned income.
So, it's really $70k + your regular income = the amount you'll be taxed on.
In many cases, this will put you in a higher tax bracket, which means you're paying way more in taxes than what people are anticipating.
@@danisle4379if your retired, what regular income?
I feel like it’s smart to have money in a 401K, but not as your only or main source of retirement savings. In Canada I recommend maxing out a TFSA ($10k) annually, and setting it up where it’s invested into an ETF with dividends reinvested.
Roth 401ks also exist
I gasped. Vlad… bro… wtf 😂 you pay taxes on withdraw not deposit in a 401k. It’s the least advantaged account. Grant is right even though I hate that guy
"Grant I'm paying my taxes." LMFAO 🤣🤣
“It’s a way for you to be trapped for 30 years” when I learned about money I realized he is 100% correct. There’s a reason rich people don’t have 401ks
Vlad is a FED for sure.
Grant is correct. 401(k) is a tax-deferred account meaning you pay no taxes now while your money grows but you will pay taxes when you withdraw the money between ages 59 1/2 - 72 years. If you withdraw before age 59 1/2 you will also be penalized in addition to paying taxes. If you withdraw after average 72 you will be penalized as well.
My company is doing 8.5 % match to my 5 % for my 401(k). I’m 54 and I would love to “retire” now so I can rollover that money into an annuity, a safer investment option. I’m praying my 401 (k) keeps performing well.
401k Roths are tax-free, on withdrawal. Which he acted like they dont exist.
This is the winning comment! Let me know when you retire or change jobs and we can get that annuity set up for you!
Giving Grant Cardone financial advice is wild
He wants everyone to live in a apartment take what he says with a grain of salt
Corrrct he is in the business of taking away homes from Gen z. Grant laughs at you not being able to buy a house
@@pbonbrisco do you have a house?
I’m sure Grant is fabulously wealthy but he clearly doesn’t understand how these accounts work. Then again, neither does the guy he’s taking to.
Listening to Grant Cardone’s advice unironically is wild.
I was told by an FA friend that Roth IRA is the way to to if you plan on making more money when you retire. 401k is good if you plan on making less when you retire because when you withdraw its taxed at your current or past tax bracket.
That’s mostly right, but it can still make sense to save into a Roth if you expect to make less money in retirement. First, tax rates are likely to increase in the future. Second, many people will eventually pay what’s called the widow’s penalty. Most importantly, after tax contributions are effectively much larger for Roth accounts because the money has already been taxed. In other words, you can save more into a Roth. Lastly, many plans allow for post tax non-Roth contributions with immediate in-plan Roth conversions which function as a way to contribute a total of up to over $70k per year. Don’t necessarily write off Roth savings just because you’re making good money now.
@ thanks for the tip!
All this is true, and logic, thank you
It is not ALL true, where is he getting 63 from? It is 59 1/2
No, it’s not all true. It’s not logical either. Please don’t listen to these guys. They’re both confused.
Just watched your video discussing XAI97K and I am very excited about this
Grant is correct. The best thing for you to do with that money that you put in your 401(k) is to buy a a second property.. by the time you’re 63 that property is going to be worth probably three times what it’s worth and so is the rental income and so is your profitability. And guess what you don’t have to pay taxes because of all the tax write offs on the house like depreciation, etc. the best tax write offs you can get is real estate. I’m doing that now. 401(k)s suck.
That’s y I have all Roth accounts. Roth IRA, wife’s 401k has Roth options, my 457 has Roth options. Paid the taxes going and have tax free growth for 25 years
He's 100% correct!!! The 401K model has been a regret from it's own creator! Look it up lol. It's better to put it in Life insurance!
Grant cardone is still tbe type of guy that says Home ownership is a dumb idea..so you can Rent One of the houses HE ownes
Rental property
right, cause per grant the most productive thing you can do for society is own all the homes. fuck being a doctor or engineer and working for what you have and making something productive for the world, just be a land owner.
Do Roth contributions which means after tax money which is taxed now instead of later were god know what the tax rate will be in 20-40 years
Your tax stays the same as the standard deduction is adjusted for the inflation and you pay less tax as you earn less then...
It's a solid argument, pay taxes now not later, but 401k is safer, usually.
When a billionaire explains tax codes you need to listen.
Bought XAI97K after watching your video, super excited! 💰
Grant you are correct
My company matches 6% plus 4% profit share. I have full control over my 401k in an exchange account. Same as putting the money into the stock market, except my company adds matches. I’ll keep my 401k thanks.
The only reason you should have a 401k is if your employer matches because that's a 100% ROI if you put whatever they'll match.
Anything after that you should put into a Roth IRA after paying taxes so you don't have to pay the higher tax rates later down the line.
What Grant is saying is 100% right this is just a RUclips short so they didn't go that in depth here.
You should definitely not be giving financial advice 😅
My company just takes approx $300 bi-weekly from me and puts it into our pension (possibly a defined pension plan or DPP) where they send us quarterly reports of what I will retire with at age 55 or 60 or 65. The maximum money I would get. The minimum. The survivors benefit to my wife or family, etc…
I also max out my CPP and CPP2 every year (Canadian pension plan). Also, I’m considering throwing some money into RRSP’s (registered retirement savings plan) as I’d get a tax break as well. However, I’m not certain on the rrsp as I’d like to live frivolously now and don’t need to be extremely wealthy when I retire.
Thoughts?
- Canada, Ontario.
Neither one of these people have any clue what they are talking about lol, this is just painful.
Depends on tax brackets. Best thing to do for those worried about higher taxes in the future is hedge both tax deferred and after tax Roth contributions. Half annual contributions to Roth and half annual contributions to tax-deferred. Tax-deferred is good unless you are certain your income during your retirement will put you in a high tax bracket; for most, not the case.
401k is good for the employee match, and that’s about it. Invest everything else in a separate brokerage account like Robinhood.
Ummm no that’s not about it. You also do not pay capital gains tax which is a big deal vs a brokerage account also dependent where you live some states do not tax income from a retirement vehicle.
401K is a good investment. Most people just gamble where they’re saving a stock market 401K is really better
Not a roth
The only time its worth it to take the hit is if your like me in 30s and want that 20% + down on a house. The key to being 63 and comfortably retired is having a house paid off, I'm paying on 2 houses. I can retire at 60, draw pension, rent income, and my 401k will be missing 3-4 years of contributions
He just wants more people pulling their retirement funds to invest in his scheme
your an idiottttttt
Where I work they match 100% up to 6% of what I put in so I do that’s a great investment over the course of 30-40 years
It’s charged as income tax upon withdrawal. I generally say if you can get a roth401k do it otherwise take the companies match and use other vehicles for investing.
He’s correct!! It’s simple tax strategy…
Im 33 and I learned this a few years back I work with someone in their 50s and they barely learned about this. They thought they had a lot of money until they realized they were going to be taxed once they withdrew their 401k
Exactly, I was stuck in that realm of thinking, however it's better than nothing... On the other hand , I think it's best to place it underneath your mattress so to speak
401k is designed to enable wallstreet to gamble on top of everyone else's retirement money, that way there's a buffer to the volatility they create.
Grant:
“900k in your 401k? You’re broke my man! You need to cash out now and invest in Cardone Capitol “
Roth IRAs are non taxable when you pull the money out because you paid taxes upfront so if you invest correctly you can make a pretty penny
Not saying you should have all of your money in a 401k / traditional IRA,, but paying taxes later mean that you are investing that money and earning compound interest. And it isn't trapped - you can borrow from it at a good interest rate, as long as the money is paid back by retirement age.
Taking financial advice from Grant Cardone is like taking life advice from L Ron Hubbard. Wait a minute…
GC is great! "...what's wrong what's wrong with you ... bro?!" LOL
Yeah, but you’ll be in a lower tax bracket after retirement. And most 401Ks are invested on index funds which make 10% or more on pre taxed amount. So effectively you will make more money, if you live long enough to enjoy it.
I agree with him for Vlad’s case, An entrepreneur like Vlad should not have a 401k. Without some kind of match from an employer it doesn’t make much sense.
You can always make Roth contributions to avoid the taxation at withdrawal
You got your money right,that's what you mentioned, respect, you got it right, I'm still struggling...and I study Matemáticas and science...🤯
I only invest company match since that’s 100 percent return. And then 15 percent in the stock market. S&P and vanguard.
People will find everything wrong with what you’re doing, but never offer a solution for you to do it the right way.
I can't understand why people are so ignorant about fundamental finances 😢
Knowing the difference between traditional and Roth would be handy
He is right.
If I were that guy, I would fire my financial advisor.
Tax rates will be lower when you retire because your 401k withdrawals will replace your salary, not add to your salary. Also, it is tax deductible when you contribute and it grows tax free while in the 401k.
A 401k was meant to be a small supplement to retirement. Not a standalone retirement
When it gets converted into an income stream in retirement which is what it is intended - your tax bracket is supposed to be lower because you are not earning as much. For high income earners in these nontraditional jobs 401k may not be the best investment vehicle because they probably will not technically "retire" and on a fixed income
Mines taxed today, so yes it’s better for someone who has a normal job and isn’t spending 30+ hours a week on a full time “side hustle”
He’s right with a 401k and traditional IRA but you pay 0 taxes if you have a Roth IRA
It is taxed…you are putting your net income into it which is taxed
if your company matches your investment, it is like you're doubling your money and then investing it. That's gotta outweigh the time you have to wait for it.
Generally good for the working class. Investors can retire on their investments therefore they dont need 401k.
_“They’re gonna put handcuffs on you to sell it before then.”_ 💀
He's right it gets taxed when you withdraw it 😅
401k is just a tool for people to stay disciplined, most people cannot manage their money if they had full access to it, this guy doesnt give advice for an avg person, his advice is for the wealthy who can invest that money in something and can earn higher returns.
If your going to buy a house ...pay cash...Gene Simmons😂😂😂
What Grant is saying is yeah you don’t pay taxes when you withdrawal it at 63, however by the time you pull that money out and begin spending it the taxes will be significantly higher then they were before so essentially your still paying taxes it’s just a higher amount in a different way then you’ve trained your mind to believe.
So I just start a 401k that’s match almost 💯 what should I do instead any recommendations and no I don’t want o buy rental property
401k withdrawals are not taxable up to $80k/year in retirement. And your next $50k is taxed at 12%. So your effective tax rate on $130k/year in 401k withdrawals is less than 5%. And Roth is completely tax free.
How Cardone got as rich as he did is beyond me.
My 401k withdrawls are 100% tax free. It grows tax free. Start maxing out a ROTH at your first real job and you will be a tax free multimillionaire before you are 40.
He’s so out there that he forgets the normal person really just cares that they have money in their old age. Instead all he’s concerned about is squeezing every cent from everything he can.
I 1000000% thought that was a tax free way to save for retirement….. are u telling me I been wrong this WHOLE TIME…I litteraly thought the penalty was taxes ……. Imma have to maybe reconsider my strategy
Roth 401k is taxed before contributing, tax-free withdrawal. Traditional 401k is taxed after contributing when you withdraw.
This has to be two of the least financially savvy people I’ve ever heard speak. Confidence gets you somewhere
Grant laughing at vlads dumbass is priceless
401k Roth while you're in a 25% or lower tax rate and 401k Traditional when you move above the 25% tax rate. That's it. It's FOR retirement, so you shouldn't ever touch it before your 55 years old (not 63), of 50 if you're a cop or firefighter.
I wish I was blessed with financial literacy and also had a financial advisor.
I retired when I heard about it.
I hear a Roth account taxes you right away.