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How big is your DPSP?

Old 01-19-2018, 08:47 AM
  #51  
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Originally Posted by Jughead135 View Post
Assuming that avoiding current-year tax is your goal, you have to keep your traditional IRA(s) empty, so that when you make your contribution then convert it to a Roth, the pre-tax proration is zero.
Or open a new Traditional IRA with zero balance just for this purpose.
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Old 01-19-2018, 08:27 PM
  #52  
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Originally Posted by Schwanker View Post
Or open a new Traditional IRA with zero balance just for this purpose.
If I'm reading you correctly, I think you may have missed the point.

You have to consider ALL of your (traditional) IRAs when calculating the pro ration, whether in one or many accounts and/or multiple custodians, without regard to "which" IRA you use to actually perform the conversion

Opening a new IRA may or may not be desirable (for purposes of the DPSP, I suggest opening one with Fidelity, as it will make the process much easier), but it does nothing to help with the back-door Roth.
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Old 01-19-2018, 09:47 PM
  #53  
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Opening new TIRAs will only complicate things further as you have to look at ALL TIRAs when doing the conversion. My way of handling this is opening a TIRA, making my non deductible contribution, converting to Roth and closing the TIRA. Rinse. Repeat.
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Old 01-21-2018, 02:18 AM
  #54  
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Originally Posted by Aerosmyth View Post
Personal question, I know. But this being an anonymous forum, I thought I'd give it a shot. Just trying to get a gauge for whether or not I'm on track with my savings compared to what other Delta pilots are doing. If you care to share, please post your approximate balance and how many years you've been employed.

P.S. Not interested in the stolen retirement debates that I expect from some of you
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Old 01-21-2018, 05:51 AM
  #55  
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Originally Posted by BobZ View Post
Yup. Going forward is a different landscape than in the past.

Self direcected is a wide open opportunity now.

Not so for much of the last 30yrs of a delta pilot career.

Some of us were compelled to build a plan outside of self directed because of the extreme disadvantage of past circumstances.

A significant component of my retirement security and net worth is income property.
You hit the nail on the head here! I was all about maxing out the 401k 54k a year til I started doing research on different investment opportunities.

While it is better than spending the money on consumer goods, putting my own money into a 401k and locking it away for 30+ years no access is not as efficient as using it now to purchase cashflowing buy and hold income properties. Leverage with compounding returns is an amazing thing. Combined with the tax advantages cashflowing income properties can produce 30 year 401k results in 10 years or less. Far less if you scale into Commercial Apartments. It's certainly not easy but the results are well worth the effort IMO.

Moving forward personally I'm not adding a single dollar of my own money into the 401k. 16% DC is enough.
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Old 01-21-2018, 07:40 AM
  #56  
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Originally Posted by Trip7 View Post
You hit the nail on the head here! I was all about maxing out the 401k 54k a year til I started doing research on different investment opportunities.

While it is better than spending the money on consumer goods, putting my own money into a 401k and locking it away for 30+ years no access is not as efficient as using it now to purchase cashflowing buy and hold income properties. Leverage with compounding returns is an amazing thing. Combined with the tax advantages cashflowing income properties can produce 30 year 401k results in 10 years or less. Far less if you scale into Commercial Apartments. It's certainly not easy but the results are well worth the effort IMO.

Moving forward personally I'm not adding a single dollar of my own money into the 401k. 16% DC is enough.
as someone who owns investment properties, good luck with that strategy....this would have been great 3-5 years ago, now you are buying at the top of the market.
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Old 01-21-2018, 08:18 AM
  #57  
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Originally Posted by Trip7 View Post
You hit the nail on the head here! I was all about maxing out the 401k 54k a year til I started doing research on different investment opportunities.

While it is better than spending the money on consumer goods, putting my own money into a 401k and locking it away for 30+ years no access is not as efficient as using it now to purchase cashflowing buy and hold income properties. Leverage with compounding returns is an amazing thing. Combined with the tax advantages cashflowing income properties can produce 30 year 401k results in 10 years or less. Far less if you scale into Commercial Apartments. It's certainly not easy but the results are well worth the effort IMO.

Moving forward personally I'm not adding a single dollar of my own money into the 401k. 16% DC is enough.

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Old 01-21-2018, 08:58 AM
  #58  
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Originally Posted by tunes View Post
as someone who owns investment properties, good luck with that strategy....this would have been great 3-5 years ago, now you are buying at the top of the market.
It's definitely harder to find deals with strong cashflow at a reasonable price right now. But opportunities are out there
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Old 01-21-2018, 09:27 AM
  #59  
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Originally Posted by Trip7 View Post
It's definitely harder to find deals with strong cashflow at a reasonable price right now. But opportunities are out there
Just build up cash until the next inevitable downturn.
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Old 01-21-2018, 10:52 AM
  #60  
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Originally Posted by Trip7 View Post
...
While it is better than spending the money on consumer goods, putting my own money into a 401k and locking it away for 30+ years no access is not as efficient as using it now to purchase cashflowing buy and hold income properties. Leverage with compounding returns is an amazing thing. Combined with the tax advantages cashflowing income properties can produce 30 year 401k results in 10 years or less. Far less if you scale into Commercial Apartments. It's certainly not easy but the results are well worth the effort IMO.

Moving forward personally I'm not adding a single dollar of my own money into the 401k. 16% DC is enough.
For many, 401k/DPSP is the easy button. It doesn't call you at 8pm as you're about to pushback to AMS, it doesn't destroy the walls and carpets, it won't sue you and if the factory in town shuts down it likely won't become worthless. Each are fraught with their own pros/cons.

I have a few myself and will likely by more as I love the cashflow. As was already mentioned, deals are MUCH harder to find and in a lot of markets are overpriced. In the mean time, I'm building up a pile of cash to be ready for another downturn to scoop up some properties. I'll also continue to fund my 401k though, because any one investments isn't the end all, be all.

I'm also exploring funneling cash into a SDIRA via the 401a. As much as I like cashflow, I also like the idea of all my rental income and appreciation being tax free.
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