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...

 

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!

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?

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.

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?