I never personally liked the blanket advice to "Max your 401k." For most, if achievable at all, that would be the most they can invest at all. Even though it is often recommended alongside a proper "emergency fund," that advice leaves little liquidity without major penalties.

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throw0101a 2 hours ago | parent | next [-]

> I never personally liked the blanket advice to "Max your 401k."

I think the general advice is max out employer contributions to your 401(k)

* https://old.reddit.com/r/personalfinance/wiki/commontopics

* https://old.reddit.com/r/PersonalFinanceCanada/wiki/money-st...

	▲	prasadjoglekar an hour ago \| parent [-]
		For enough income, maxing out 401K is the one way to reduce taxes and keep your money.

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jeffreyrogers 2 hours ago | parent | prev | next [-]

Roth contributions are withdrawable without penalty. Also most employers offer a match of some amount, which is essentially free money.

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sumeno 2 hours ago | parent | next [-]

Not Roth 401ks, only IRAs

	▲	jeffreyrogers 2 hours ago \| parent [-]
		Yes, although some plans let you roll contributions into an IRA.

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what 2 hours ago | parent | prev | next [-]

Most people here are probably paid too much to contribute to a Roth IRA.

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pinkyboy an hour ago | parent | next [-]

I have considerable Roth assets because my employer's 401k allows for the Mega-backdoor, which means I can put $30k+ per year of after-tax income into 401k (beyond the normal pre-tax contributions) perform a Roth-in-plan-conversion on the after-tax assets, and then roll it out into a Roth IRA.

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ptmcc 2 hours ago | parent | prev | next [-]

That's what the https://www.investopedia.com/terms/b/backdoor-roth-ira.asp is for, assuming you don't have any existing traditional IRA balances

	▲	jeffreyrogers an hour ago \| parent [-]
		You can also roll your traditional IRA into an employers 401k (if the plan allows this) to zero out your traditional IRA balance.

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jeffreyrogers 2 hours ago | parent | prev [-]

You can convert your 401k to an IRA when you leave an employer. Some employers also offer in service rollovers (I think these mostly have minimum age restrictions on them though)

	▲	what 16 minutes ago \| parent [-]
		That’s a traditional IRA, not Roth.

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dripdry45 2 hours ago | parent | prev [-]

The five-year clock is for the original contribution. It’s important not to get that mixed up.

	▲	an hour ago \| parent [-]
		[deleted]

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BeetleB an hour ago | parent | prev [-]

I believe the general idea is to max it if you can. If you can't, put whatever you can, and forego luxuries like vacations until you can.