- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Winter Olympics
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Simple IRA vs a mutual fund for retirement?
Posted on 7/17/17 at 9:02 am
Posted on 7/17/17 at 9:02 am
I am new here, been following sports related content for a while, then discovered all the other topics. Loving this site! I've read many of the money threads, but couldn't find info on this. My wife is being offered a simple IRA at work with a 3% match. It is through Mutual of America, fees are 1.35% plus .15% for one of the low cost funds. We both max out our Roths at Vanguard, but if we would like to contribute more, should we put it in her simple IRA at work? Or just open a regular mutual fund at Vanguard as a retirement fund? I have tried to figure out the tax implications, but not sure which is the best way to go. Thanks!
2
Posted on 7/17/17 at 9:49 am to Tiger1414
I assume you're using the word "simple" to mean the SIMPLE (Savings Incentive Match Plan for Employees) IRA and not just a regular ole Traditional IRA. The SIMPLE is offered by small employers as a less expensive (for the employer) alternative to a 401(k).
I'm not entirely sure but suspect that because a SIMPLE is provided by the employer that it is separate from your Roth and that yes you can continue to use your Roth as before. Definitely check on this though.
That annual fee is high but you should at least get the 3% match. And the SIMPLE is still tax-deferred. Put some sample numbers in a spreadsheet and work through scenarios to figure out what will work best.
I'm not entirely sure but suspect that because a SIMPLE is provided by the employer that it is separate from your Roth and that yes you can continue to use your Roth as before. Definitely check on this though.
That annual fee is high but you should at least get the 3% match. And the SIMPLE is still tax-deferred. Put some sample numbers in a spreadsheet and work through scenarios to figure out what will work best.
Posted on 7/17/17 at 11:46 am to foshizzle
Awesome, thanks. The Mutual of Am. guy said that we could continue to fully fund our Roths, and contribute to his IRA up to 12,500 a year. I'm trying to wrap my head around the benefits of a tax deductible, tax deferred SIMPLE IRA, which would have potentially 30% taxes when we take it out. Or a mutual fund which has capital gains tax of 25%, but is non tax deductible. I may call Vanguard to get their advice. Either way, at a minimum I think it is worth at least to contribute up to the 3% match.
Posted on 7/17/17 at 12:28 pm to Tiger1414
We have a SIMPLE at my company (30 employees). Company contributes 3%. I think under a SIMPLE plan they have to contribute up to 3% of your contribution. I contribute the 3%, then max out my roth for me and the wife. I usually put 20% of any bonuses in the SIMPLE plan to offset the tax hit.
Posted on 7/17/17 at 2:08 pm to Tiger1414
You most definitely can contribute to a SIMPLE and a Roth. I agree with your assessment, you should at least take the 3% match. The highest cap gains rate is 20% currently and if you are in that bracket, you two would need to be making 470k+... If you are, you should max out that SIMPLE for sure. 
I'd assume you were in the 15% long term CG rate bracket...
On another note, you are not required to use Mutual of America. It's just a matter of if your employer would agree to send the check somewhere else. A SIMPLE is YOUR account. It's company sponsored, but not company directed.
ETA: This may seem like a bit of a pushy move so you should consider your place - if you have the clout to make this request - bc if it's a small company this creates more work and may be viewed as an annoyance.
You may also consider hiring an advisor if you could find a good one. Of course, you seem pretty cost conscious, but if you don't have the time to research this stuff yourself, it would probably be worth it in the long run.
I'd assume you were in the 15% long term CG rate bracket... On another note, you are not required to use Mutual of America. It's just a matter of if your employer would agree to send the check somewhere else. A SIMPLE is YOUR account. It's company sponsored, but not company directed.
ETA: This may seem like a bit of a pushy move so you should consider your place - if you have the clout to make this request - bc if it's a small company this creates more work and may be viewed as an annoyance.
You may also consider hiring an advisor if you could find a good one. Of course, you seem pretty cost conscious, but if you don't have the time to research this stuff yourself, it would probably be worth it in the long run.
This post was edited on 7/17/17 at 2:11 pm
Posted on 7/17/17 at 6:28 pm to UpstairsComputer
Put it in the simple, and roll some simple funds into a traditional Ira, then self direct, or have it managed.
Posted on 7/18/17 at 7:31 am to Iowa Golfer
quote:
and roll some simple funds into a traditional Ira
Please don't do follow this free advice on the interwebs. There is a 25% penalty to move money out of the SIMPLE within the first two years of having it open.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News