So, like many boomers, I have a 401k that represents basically my entire retirement fund. Unlike many boomers, I am under the age of 50.
I'm sure there's plenty of other millennials, and possibly even younger generations, who have simple, relatively hands-off accounts from jobs where you just diverted a percentage of your paycheck. It's not flashy or trendy, and it's kinda old-school - like the employers we got them from.
With the market being about as stable as a cement mixer full of nitroglycerin, what are we to do?
I've thrown some pocket change into the Meme War on Wall Street, but if this triggers a collapse, there goes my 'retirement' (as though that could ever happen given current trends). What should I and people like me be looking out for?
Yes, with a Roth you can always withdraw up to the entire amount you ever put in the account. It's a rather easy tax form (Form 8606, part III) you have to fill out and file with your taxes every year you take any money out. That amount goes back as far as you have the account, so if you have put in $1000 a year for the last 10 years for a total of $10k and never taken any out, you can withdraw $10k from your account with no penalty.
I've even been known to put money in the Roth, buy a stock, sell for a profit, and take the initial deposit + the profit out in the same year. Totally ok as long as you deduct it from your total. Example:
If you never let that contributions # get to zero then it's just your money you already paid tax on. Your deposits are subject to the limits ($6k or whatever). You can't put in too much and do this, or at least if you can I haven't read the tax guide on it. I don't ever contribute more than the limit.
Disclaimer: Please don't take my word as official tax advice or anything. I'm not a CPA or any sort of professional. I'm a guy who reads and familiarizes himself with the tax code because I like to do all my tax stuff myself. I encourage you to read yourself and/or consult a paid professional who will actually be on the hook for their advice. I follow every tax law to the letter and try avoid gray areas whether I agree with the laws or not, and these statements are based on the most black-and-white interpretations of the law I can come up with.
I used to contribute up to the limit, I go back and forth on it at times. Either way, Roth IRA is one of my favorite types of accounts because you can do so much with it.
I remember just because I did this specific tax form last night, but it specifically says in the instructions you can count all contributions back to 1998. I think that was first year they existed. So it really is as long as (sum of total contributions ever) - (sum of total withdrawals ever) > 0 then you don't owe a penalty.
I started by cheating off the software back when I was a self-contractor and a broke college student. Since I was a self-contractor I had to file some extra forms that wasn't covered under the "free" software and the software I needed was $75 I didn't want to spend. The software wouldn't charge you until you filed it, so I'd let it fill everything out and then copy to my own forms manually while at the same time trying to understand why it was putting numbers where. There are detailed instructions for every single form on IRS.gov, and once you get used to reading them they aren't that hard to follow.