Originally Posted by
BurritoBeach
Thanks a lot for all the advice, I’ll have lots of reading to do on my next layover. Anyone have any recommendations on investments outside of the PRAP? I’m looking at 529s, IRAs and the like. Or is maxing out the 401(k) more advantageous? I currently do 5% and plan to increase as my longevity increases. I did speak with Schwab and they helped with balancing. We also have a plan to speak every July around my longevity date.
Sorry for all the questions, I’m a novice when it comes to all this. I didn’t pay close attention to it at my previous jobs and my own prior research left me probably more confused than before I started. But I am grateful for all the advice and will start studying up soon!
While it’s an unthinkable 40 years away, these early vectors will make all the difference. In your reading look at the tax consequences of Required Minimum Distributions (RMD) starting at 70 1/2. Roth IRAs don’t have RMD. One way to push funds into that is to max out the pretax 401k (required for this strategy), then elect the company 16% (and any extra your budget allows) to go to "voluntary post tax" in the PRAP election page. When the year is done this can then be rolled over into a Roth account within the PRAP. Google "backdoor roth" although it’s not backdoor anymore as the new 2017 tax law made this basically front door.