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[theory]

Sorry, I meant to write salary eligibility.  Traditional deductible IRAs have an income limit of ~$70k / ~$115k (single / joint), and Roth IRAs have an income limit of ~$116k / ~$183k (single / joint). There's also a very popular way to get around the Roth IRA income limit but no corresponding maneuver for traditional deductible IRAs.

[jonts26]

Thanks for all the advice guys.

I am a late 20's American single guy. I'm currently doing a post doc. My income is good enough, but I have basically no benefits so a 401k is out. I did just sign up for a Roth IRA. My current plan is to put the max I can into the IRA while aggressively paying down my student loans. I've budgeted it so I can pay them off in about 2.5 years, when my current assignment ends. Then hopefully I get a real full time job and I'll re-evaluate my financial situation.

[GendoIkari]

Sorry, I meant to write salary eligibility.  Traditional deductible IRAs have an income limit of ~$70k / ~$115k (single / joint), and Roth IRAs have an income limit of ~$116k / ~$183k (single / joint). There's also a very popular way to get around the Roth IRA income limit but no corresponding maneuver for traditional deductible IRAs.

Yeah I just found out about this income limit yesterday when following up on your post and learning what a back door Roth was. Man I didn't know about this! Erm, do you know if it depends on your income during the year that you made the contribution? I mean, I made my 2014 contribution near the beginning of this year... and there's a chance I'll be over the limit this year, though I'm not sure. So if I am over the limit, how would that work? I've already made the contribution. Does that mean that I'll pay some penalty for having made the contribution when I wasn't eligible? But I didn't know at the start of the year when I made it if I would be eligible or not.

Also, unless I'm mireading something, traditional IRAs don't have any income limits; only Roths do. And this is the basis of the back-door Roth; that you can contribute the money to a regular, then roll it into a Roth, even if you are over the income limit for a Roth.

[Polk5440]

I am a late 20's American single guy. I'm currently doing a post doc. My income is good enough, but I have basically no benefits so a 401k is out. I did just sign up for a Roth IRA. My current plan is to put the max I can into the IRA while aggressively paying down my student loans. I've budgeted it so I can pay them off in about 2.5 years, when my current assignment ends. Then hopefully I get a real full time job and I'll re-evaluate my financial situation.

Sounds good, but in case you haven't yet, I would make sure not to skip building an emergency fund first:

5)  Add up all of your expenses for a month, including loan payments.  Accumulate 6x this amount in your bank accounts.  This is your emergency fund.  It also ensures that you don't need to worry about the day-to-day timing of paying bills, and should be enough to avoid any minimum balance fees on your accounts.

It is really important to have liquid assets to cover regular expenses for a while or for emergencies. You can get away with the equivalent of 3 mo of expenses, but like Elestan, I also advise the equivalent of 6 mo. of expenses. Double check your medical benefits since you mentioned that your overall benefits are limited. You should know what you are on the hook for in case of an emergency.

[theory]

Sorry, I meant to write salary eligibility.  Traditional deductible IRAs have an income limit of ~$70k / ~$115k (single / joint), and Roth IRAs have an income limit of ~$116k / ~$183k (single / joint). There's also a very popular way to get around the Roth IRA income limit but no corresponding maneuver for traditional deductible IRAs.

Yeah I just found out about this income limit yesterday when following up on your post and learning what a back door Roth was. Man I didn't know about this! Erm, do you know if it depends on your income during the year that you made the contribution? I mean, I made my 2014 contribution near the beginning of this year... and there's a chance I'll be over the limit this year, though I'm not sure. So if I am over the limit, how would that work? I've already made the contribution. Does that mean that I'll pay some penalty for having made the contribution when I wasn't eligible? But I didn't know at the start of the year when I made it if I would be eligible or not.

Also, unless I'm mireading something, traditional IRAs don't have any income limits; only Roths do. And this is the basis of the back-door Roth; that you can contribute the money to a regular, then roll it into a Roth, even if you are over the income limit for a Roth.

As to the first, I think it's your income for whichever year you designate your Roth for. 

As to the second, there is an income limit for a deductible trad IRA.  There is no income limit for non-deductible trad IRA because no one in the history of mankind has ever desired a non-deductible trad IRA.

I strongly recommend the backdoor Roth if your income precludes you otherwise from a Roth IRA.  It's extremely popular and recommended by pretty much every reputable financial advisor. 

[theory]

Thanks for all the advice guys.

I am a late 20's American single guy. I'm currently doing a post doc. My income is good enough, but I have basically no benefits so a 401k is out. I did just sign up for a Roth IRA. My current plan is to put the max I can into the IRA while aggressively paying down my student loans. I've budgeted it so I can pay them off in about 2.5 years, when my current assignment ends. Then hopefully I get a real full time job and I'll re-evaluate my financial situation.

What do you mean by "have basically no benefits so a 401k is out"?

[jonts26]

I don't have access to a 401 k through my employer.

[theory]

That's sad   Your plan sounds pretty sensible then

[jonts26]

Well when you have a market saturated with ph.d.'s post docs don't always get the best offers.

[SwitchedFromStarcraft]

And they can't all be the best offer.

[Ozle]

Or, you could send it to me

And then, for every friend you get to sign up, i'll give you 15% of what they send to me.
And in return you'll get a massive return on investment each month.

[qmech]

Or, you could send it to me

And then, for every friend you get to sign up, i'll give you 15% of what they send to me.
And in return you'll get a massive return on investment each month.

You'll not get me this time, I don't have 7 friends.

[enfynet]

Or, you could send it to me

And then, for every friend you get to sign up, i'll give you 15% of what they send to me.
And in return you'll get a massive return on investment each month.

Seems legit.

[AHoppy]

/tag to read through all of this when I'm not avoiding going to bed since I'll be in the same boat in 6 months

[sudgy]

/tag to read through all of this when I'm not avoiding going to bed since I'll be in the same boat in 6 months

Rule #Fairly-Important of financial management: Never assume you'll get money in the future.

[enfynet]

/tag to read through all of this when I'm not avoiding going to bed since I'll be in the same boat in 6 months

Rule #Fairly-Important of financial management: Never assume you'll get money in the future.

What about the Lottery Retirement Fund?

[WalrusMcFishSr]

Don't buy too many Silvers

[Witherweaver]

Could somebody explain the advantage of the "Roth" part of a Roth IRA to somebody not familiar with the US system?  As I understand it it means you get tax relief on withdrawals rather than contributions, which is the opposite of what you want if you expect to earn less in retirement than when working.

So, it's like a Hagar IRA, but you get some advantages.  With Roth, you get a little more energy, usually in the form of wild, upfront antics.  Many feel this helps performance and believe to see significant Jumps.  On the other hand, they are exposed to some crashes as well, often performing in a very volatile manner.  Some believe Roth leads to conflict within its constituents.  Hagar IRAs are less volatile, often performing at a steady and more demurely successful manner. 

People often debate which one is better, but ultimately it comes down to a matter of preference. Do you like wild excitement with big highs and big lows, unpredictable but able to strike gold?  Or do you like solid and predictable performance? 

One thing, though, you cannot combine them, because they do not work together at all.

So I feel like this joke needs some explanation.

You see, David Lee Roth was the lead singer of Van Halen when they first got big.  He was a big flashy frontman, known for wild antics and hot-headedness. Van Halen became quite big under David Lee Roth. I don't follow the band that much, but there was a lot of inner turmoil between him and the rest of the band, and eventually he left/was asked to leave.  He was replaced by Sammy Hagar.  Sammy Hagar was not quite so show-offy.  Hagar was somewhat established in his own rite, and the band enjoyed quite a bit of success with him with less tempestuousness. 

David Lee Roth and Sammy Hagar had a big feud after Hagar was in Van Halen.  It was one of the big classic rivalries in Rock and Roll.  They tried to reconcile at some point, even attempting to tour together I believe, but ended up at ends, and I think one or both of them has been reported saying they would never work with the other again.

Also, "Jump" was a big Van Halen hit when David Lee Roth was in the band.

[qmech]

This is funny because WW had to explain his own joke.

[GendoIkari]

This is funny because WW had to explain his own joke.

This is funny because explaining jokes is a joke/meme that we have here at F.DS.

[Awaclus]

This is funny because WW had to explain his own joke.

This is funny because we're all Wandering Winder so WW explains his own jokes all the time.

[SwitchedFromStarcraft]

This is funny because WW had to explain his own joke.

This is funny because we're all Wandering Winder so WW explains his own jokes all the time.

It's a shame they can't all be the best WW jokes.

[Witherweaver]

The terrible irony here is that people that have been commenting on my joke explanation have gotten more upvotes than both my joke and my explanation combined

[qmech]

You might get more upvotes if your irony was less terrible.

[Witherweaver]

You might get more upvotes if your irony was less terrible.

They can't all be the least terrible irony ever.