Scambo

Well, yes rhetorical, but sort of my point--any .gov "annuity" is worth more than it looks because it might be collected at any age and it has no (little?) risk of failure. Using 401k money always puts the risk on the individual, which is why companies want them gone.

GF

Oh, okay, I see, you get it... I don't know if that makes you a tool like me, but...:D

I could be in considerably worse company as a tool.

Hey, congrats to all DL pilots as "Airline of the Year"! Now if only my bags would show up! :D

GF

"A low income individual should bias towards a Roth to minimize the payment of taxes over his/her lifetime. Higher income individuals should be biasing toward taking the deduction now by contributing to a deductible 401K (for example) while their effective tax rate is likely higher, rather than contributing to a Roth now and paying that higher effective tax rate when they could have paid less tax in the future when they're likely making less money during retirement"

If you're a high earner, you should do both the Roth and the 401K. Minimize the taxes you pay now, and minimize the taxes you pay later. If you don't qualify for a Roth, it's easy to contribute to a traditional IRA and convert to a Roth, penalty free, the next day (ie backdoor Roth).

We gave an investor friend less than 20K of our traditional IRA money, 16 years ago. Three years ago, when it was worth 150K, we converted it to a Roth. Sucked up paying 50K in taxes (painful) for the conversion. It's now worth over 300K, and if he continues his annual rate of return of over 18%, (I know, amazing and hard to match, even for Bernie Madoff)...in 20 years, that's about 8 million. Tax free.

If we hadn't sucked up the 50K in taxes, all that money would taxed at the highest tax rate. With all the debt and entitlements this county is going to be paying for, that tax rate is only going straight up.

18% a year? :rolleyes:

If it sounds too good to be true...it probably is.

How do you know for certain your investor buddy isn't the next Bernie?

Read this: No One Would Listen: A True Financial Thriller: Harry Markopolos: 9780470919002: Amazon.com: Books

I'll give you the cliff notes: There are a whole lot more Bernie Madoffs out there.

I don't itemize. I have zero deductions.



Most of what you said is true. No military retirement. All my 402k contributions from here on are ROTH. I'll believe the PBGC if I start cashing checks. Democrats cannot do math, and the physics of what they are doing will not stop because they feel bad about it. One way or another, they are coming after our retirement monies....



We'll see. On one hand, I think you are right, because these clowns won't have anywhere else to get the money from. On the other though, If I don't take it out, they won't tax me on it, and the Mrs and I really aren't big consumers. (I STILL don't have a smart phone)....

The discussion is interesting, and has got me thinking about reevalutaing my strategy...

Oh, I know. Everyone I tell his rate of return says that. But in this case, this was my spouse's best friend from high school, who is incredibly ethical and I would trust him with my life. There have been articles written about him, he's been offered a hedge fund (refused), and also has refused to take new investors, including our son, for years. Most importantly, though, we follow every single trade he does on TD Ameritrade, and have full access to our money and all information. So he truly is for real. I hope he lives a very, very long time....selfishly.:D

I wish he could have taken over our 401K's instead of having us flounder with them. We would have been retired by now.

Strategy: Non-leveraged tax deductible assets that provide income and depreciation for a long time...They make your taxable income smaller, but more than pay for themselves (the best are the ones that pay for themselves in depreciation (appraisal or leveraged value) alone)...car washes, rentals, store fronts, farms, office space, Laundromats, trailer parks, etc.

Outright ownership is the way to go with these. There is work involved, but the tax savings/income potential is great. DYODD.

In several years, I think the gold bugs will have been proven right also.

Bottom line, staying liquid can put your assets in Pelosi's hand.

No, all I said was that the PS check is pensionable income as defined in the PWA. So you get 15% more but that 15% is put in the 401k regardless of your 401k election for the PS check. Sorry for the confusion.

Yeah what I REALLY want to do is set up a self directed IRA and buy real estate. Then since it is in a ROTH, ALL the profit and cap gains are tax free. The only bank I can find at the moment to do it is Utah Bank. There are some companies (NuView IRA) that will do it, but the cost seems a little expensive for a mere paperwork shuffler, and there is something else about them that just doesn't seem copacetic . I can do all that myself anyway... (it's just gubbamint paperwork) Any of ya'll know other banks that will do self directed IRAs?

Our completely unrepayable debt and comically unpayable long term unfunded obligations are all the math you need to know. Meanwhile there are trillions of sitting duck dollars in all these affluent middle class retirement vehicles, the vast majority of which belong to the upper 51%.

They are coming for your money, and they will get it. One way or another. They will tax it, and they will take it in ways they don't call a tax. They will inflate it away and they will use what you have left to means test you out of other benefits which is the same as a tax.

Save, diversify and pay down debt. That's all you can do. You won't be getting any "tax free" income in a couple decades. And if you do, it will trigger financial hits every bit as expensive as a retroactive tax on what you thought was going to be tax free. The masses will vote for your money, one way or another.

I certainly understand the sentiment. The way things look today, that seems like a logical outcome. But you have to remember that we're currently under the Obama Malaise and things could change in the future. This country has demonstrated great resilience in the past. I wouldn't give up on it yet.

BHO - Two more years.
HRC - Eight more years.
Doomed = Ten more years.

I'm purchasing property "outside" of the U.S.

GJ

Bay Islands in Honduras are nice, and not overly fond of Barry.

Yeah. Russia demonstrated great resilience after the ruble went to worthless too. The problem is, it went to worthless.

PS our 250 year history isn't enough time to demonstrate "great" resilience. Snowmaggedon ATL, make it last all winter...what's that look like?

.."Like"..

Hey, I'm not going to argue with anyone over what's going to happen in the future. Because I do not know for certain what's going to happen and neither does anyone else. We all make decisions (financial and otherwise) to some degree based on assumptions. DYODD. I just get tired of hearing all the "I know exactly what's going to happen and anybody who disagrees with me is stoopid" arguments (not at all saying that's what you or anyone else is doing here)... "Goldfinger" on the old DALPA Forum pretty much used up all my patience with that. :rolleyes:

Wow! I didn't know you could predict the future! And I didn't realize that our debt was "unrepayable?" That's news to me too. And the rest of the world. So entities, like foreign countries, are buying our government's bonds knowing that we're never going to be able to pay the back or we're going to turn on the printing presses until our money is worth nothing? Hmmm.....

You won't be so optimistic if the most intelligent woman on the planet wins election. The socialist wet dream of single payer health care will be realized, and you and I will be paying for it.

At least pot will be legal in most states by then.....

Do you have any idea how big a number like 17 trillion is?



Obviously not.

Where? pray tell.....

Extenuating circumstances
 

Democrats in charge of the Legislative and Executive branches of the US government will lead to increases in the tax rates for anyone of medium to high net worth (unless you have political pull to get your own tax breaks).
If the tax rate for people with a net worth above zero goes up in the future (in order to support those needy folks whose net worth is below zero, of course) and that increase is such that the tax rate on YOUR taxable IRA distributions (because you have assets, and the government needs them to increase their power base) is, say, 95%, but they can't get their greedy fingers on the Roth part because I already paid on the tax on that, then I win. Not saying this WILL happen, just that I diversify just in case. I don't consider it a "fascination" with Roths, just a tool in the box.
Been drinkin', forgive the syntax. YMMV, etc.

Oh no! You just threw a REALLY BIG NUMBER at me. Should I be scared?

Let me make an analogy.....

What if I told you that my neighbor has a ONE MILLION DOLLAR mortgage on his home. Holy crap! A one million dollar mortgage? That's a huge number for a mortgage, isn't it? That's pretty scary. Well, maybe, sort of.

What if I told you that my neighbor is a union janitor and his wife is a stay at home mom? Their household income is $35,000/year. That one million dollar mortgage is pretty scary. In fact, it just got a lot scarier.

But what if I told you my neighbor is an executive at a Fortune 500 Company and he makes $500,000 per year? Now that $5,000-ish/month mortgage payment on that one million dollar mortgage note doesn't seem like such a big deal, does it?

The point is that you can't look at the raw debt of the US government in isolation. 17T, actually, 17.3T is a big number, but we also have a huge economy that can afford to pay this debt (so far). Yes, we're running deficits. Yes, those deficits can't last forever. But that doesn't mean this problem won't be fixed in the future. And, believe it or not, as a % of GDP, we've been in deeper debt than we are now- about 60 years ago. I wonder if your grandfather was pinning messages of gloom and doom on the bulletin boards of yesteryear?

GLEX

I would submit there is a huge difference between today's debt and deficits than the ones from WW II and post-WW II era. The debt incurred during the war "bought" us, and the world, 60 years of peace and stability that produced the economy you credit. The current situation is just subsidizing some good and a lot of bad behavior. It is mostly transfer payments. The actual government projects that benefit the "general welfare"--infrastructure, defense, ATC, judiciary, etc are actually being slowly starved of financing as transfer payments like Medicare, Medicaid, Social Security take ever larger shares of the government budget.

GF

I don't know if there's a difference between today's debts and yesterday's. The point is that we have had big debts in the past compared to the size of our economy, yet we're still here today. We don't have to go out and buy bullets and bomb shelters because the US is about to collapse due to its debt.

However, I do believe that running continuous deficits (all else being equal) can't go on. I don't care if they're a R or a D, they're going to have to come up with some sort of solution to fix the problem before interest payments start crowding out EVERYTHING.

Winston Churchill once said of America, "The Americans will always do the right thing… after they’ve exhausted all the alternatives." I think we're still in the process of exhausting all the alternatives, politically. Hopefully after this process is done, we'll do the right thing. Maybe I'm naïve. We'll see. For now, I'm not scared yet.

No argument from me on any of that, including the sarcasm. But would it be the end of our country? I don't know. Certainly won't help but, again, I think our country and its structure have shown great resilience over hundreds of years. We may bend but I doubt we'll break. In any case, I agree with you on "the most intelligent woman on the planet" and truly hope we don't as a country have to suffer further setback.

My grandfather paid his bills when they came in. The rest of your analogy is typical "progressive" spin. If only "rich" people would pay just a little more... we would get out of this. Of course anybody with a JOB will be considered rich before long....

I have no kids and no debt, so why should I care about your kids' future? Obviously you don't.......

Actually, there is nothing to keep them from changing the rules on ROTH to tax any income earned above the monies contributed to the fund. The power of Owebama's pen and phone ya know.....

If you consider transferring wealth from those of us that have any to those that don't 'the right thing' then you will be happy and satisfied.

You are.You should be.

Not that I disagree with your point, but you should really get your facts correct...there is no such thing as an "Obama Phone". In fact, if you want to tie this to a specific president we should call it the "Reagan Phone".

snopes.com: Free 'ObamaPhones' for Welfare Recipients

Unless, of course, Snopes, The Atlantic, Businessweek, and WSMV-TV can not be trusted and are all biased liberal media.

There are a few angles in this argument.

First, the .gov can print itself out of the debt. This makes the Dollar worth nothing, but solves the "debt." equation.

Second, the debt is around $200K per working person (including those working at minimum wage jobs). Manageable for some, untenable for others.

Third, the workers and producers have already been outwitted and whatever wealth they accrue can be removed easily by targeted taxation (or some other form of wealth extraction program).

The reward is to the irresponsible.

Does anybody have any info on jetblue's 401k- I know that it is 8% but is that a direct contribution or a company match?