Jump to content

Investing


Recommended Posts

1 hour ago, Leathernecks said:

That was somebody else who said they're 35.

One thing I like about a Roth is I know exactly what I have.  I don't have to plan for an unknown tax rate in the future, what my tax bracket will be, or anything else.  What I have in there is what I have. If I'm shooting to retire with $1 million, I know exactly what I need to get to.

Let's be real. Roth accounts are our best option for us younger people.  Tax rates in the future are going to be much higher and Roth accounts will save us money. 

I know its speculation but somebody has to pay for these ridiculous stimulus bills. 

  • Like 1
Link to comment
Share on other sites

8 hours ago, mrflynn03 said:

Let's be real. Roth accounts are our best option for us younger people.  Tax rates in the future are going to be much higher and Roth accounts will save us money. 

I know its speculation but somebody has to pay for these ridiculous stimulus bills. 

One would certainly think that would be the case.  Here's what I then start thinking about.  

If I'm deferring tax now I'm lowering my tax bill this year.  Hopefully I'll be debt free and able to live off less in retirement, therefore withdrawing less money.  Maybe even putting me in a lower tax bracket then?  Who knows.  

  • Like 1
Link to comment
Share on other sites

2 hours ago, NotIThatLives said:

One would certainly think that would be the case.  Here's what I then start thinking about.  

If I'm deferring tax now I'm lowering my tax bill this year.  Hopefully I'll be debt free and able to live off less in retirement, therefore withdrawing less money.  Maybe even putting me in a lower tax bracket then?  Who knows.  

I’ve always understood that you will be withdrawing less in retirement than your income in your prime earning years, which would put you in a lower tax bracket in retirement. 

Edited to add: I’m not an expert at all. Know just enough to be dangerous. 

Edited by Lostin76
Addition
  • Like 1
Link to comment
Share on other sites

21 minutes ago, mrflynn03 said:

I'm operating on the assumption that marginal tax rates will be higher in the future. I guess we'll find out if I'm an ass or not. 

Also, I like the feature that roth allows you to withdraw contributions without penalty.  Not ideal but it's good to know its available if needed. 

That’s certainly possible, but let’s hope not too much higher! 

Also, my wife is 11 years younger than me, so she will most likely keep working for the first five years or so after I retire. 

  • Like 1
Link to comment
Share on other sites

35 minutes ago, Leathernecks said:

Looking forward to those 5 years already?  Haha.

So, so much, my friend. My job is great and pays well, but lots of responsibility and worries. I’m about five years away from retiring I think. Could do it comfortably in three, but those two extra years will help. 

Then I can focus on photography (going to build a darkroom for printing), gardening, and relaxing!

  • Like 2
Link to comment
Share on other sites

These posts above point out the problems with standard generalizations. There are so many assumptions to make and no one has a crystal ball. I have many clients earning more in retirement than they did working- think of people with pensions. Deferring taxes at at a lower rate only to pay a higher rate doesn't work too well. That doesn't even factor in higher future taxes. @Seeking6 wisely pointed out the need for tax bucket diversification. It's important to know about investing, but it's even more important to realize what you don't know and seek professional advice as decisions become more complicated.

  • Like 2
Link to comment
Share on other sites

26 minutes ago, Reacher said:

These posts above point out the problems with standard generalizations. There are so many assumptions to make and no one has a crystal ball. I have many clients earning more in retirement than they did working- think of people with pensions. Deferring taxes at at a lower rate only to pay a higher rate doesn't work too well. That doesn't even factor in higher future taxes. @Seeking6 wisely pointed out the need for tax bucket diversification. It's important to know about investing, but it's even more important to realize what you don't know and seek professional advice as decisions become more complicated.

Taxes always grab headlines and who knows what will happen during the next 4-8 years....but I diversify my taxes as much as I do my actual portfolio. Shoot..I even have an overfunded life insurance policy (up to non mec limits) that I keep putting into. It's technically been paid off for 3 years or so but once  you get past the intial 7-8 years of insurance charges....variable life policies are an awesome tool. 

Many companies use variable life policies to fund their deferred comp plans. It's not sexy but it works...especially when it's time to withdrawal.  

 

  • Like 1
Link to comment
Share on other sites

28 minutes ago, Seeking6 said:

Taxes always grab headlines and who knows what will happen during the next 4-8 years....but I diversify my taxes as much as I do my actual portfolio. Shoot..I even have an overfunded life insurance policy (up to non mec limits) that I keep putting into. It's technically been paid off for 3 years or so but once  you get past the intial 7-8 years of insurance charges....variable life policies are an awesome tool. 

Many companies use variable life policies to fund their deferred comp plans. It's not sexy but it works...especially when it's time to withdrawal.  

 

Good point about the next 4-8 years, everything could definitely go pear-shaped. 

I have run the numbers though and unless we hit the lottery (that we have never played) then there is absolutely no possibility of us earning/withdrawing more in retirement than we make together now. It’s just not going to happen.

That said, I will most likely toss some dollars at an IRA in my last years working. Will be nice to have a tax free pot to withdraw funds from with less rules. 

  • Like 1
Link to comment
Share on other sites

1 hour ago, mrflynn03 said:

@Reacher correct me if I'm wrong. 

I do believe there is an IRA loophole based on the 5 year rule. 

If you do a traditional IRA and convert to Roth and WAIT 5 years and dont start withdrawing until 59 1/2 its tax free. 

But you have to wait or you will get slammed with taxes and penalties.

You are referring to the "Backdoor Roth IRA" used for people with an income to high to contribute to a Roth. Here is some further info-
https://www.investopedia.com/roth-ira-conversion-rules-4770480#:~:text=The Tax Implications When you convert a traditional,built up in the account over the years.

  • Thanks 1
Link to comment
Share on other sites

  • 3 months later...
1 hour ago, Seeking6 said:

Those who bought and held AMC are being rewarded this week. Opened at $12 on Monday and just went over $22 this morning. Nice little pop.

I got out of the GameStop I should have held onto all my AMC.  I did buy a little over $200 worth at $9 or so last week so it looks like I need to go sell.

Link to comment
Share on other sites

1 hour ago, NotIThatLives said:

Just sold half my shares at $24.13

Hold the line! Popping over $29 now. What started as a short squeeze play a couple months has turned into another one....and honestly as the world continues to open up movie theatres will do well. I'm holding mine until the fall....unless something gets really stupid.

Last Spring I bought Penn National at $5...sold a chunk at $30 and the rest of it at $50+....missed out on $50+ more per share. Oh well. Turbulent and fun times in the market!

Link to comment
Share on other sites

Just now, HoosierFaithful said:

I never sold!  311 shares at $16, thinking about putting a stop limit at $18 or so to make sure if it all falls out I can get out but we'll see.

I have 500 at $5 and another 100 at $16.50....trying to pick a number as I type but honestly I still feel selling before the fall would be a mistake. Even if reopening is being priced in over coming weeks it just makes sense to ride it out until football season.

Link to comment
Share on other sites

I'd just make sure I diversify all my investments. Roth, Traditional, Gold/Precious metals, Real Estate...it isn't just tax rate to worry about...I'm actually more worried about inflation more than anything. Will the money I've made be worth enough by the time I need it. Will I exhaust my retirement early because the cost of goods grows so much. Not worried so much about things that I won't need in retirement even so much like housing/cars etc but simply the cost of food/energy that living on a limited budget would effect even more so. You may have to take out more than you think and could live off now because the cost of those necessities could go up so much....and possibly still put you in a higher tax bracket causing a double whammy if you will. Also if this year tells you anything having a Roth is a good idea because if worse case scenario happens it is already taxed and you can draw on it in an emergency (and a greater chance govt won't penalize for doing so) or can be withdrawn without penalty for medical/educational purposes etc. Anyways...the future is hard to predict..so preparing for multiple outcomes is probably the safest way to go. my 2 cents lol

  • Like 2
Link to comment
Share on other sites

2 minutes ago, dgambill said:

I'd just make sure I diversify all my investments. Roth, Traditional, Gold/Precious metals, Real Estate...it isn't just tax rate to worry about...I'm actually more worried about inflation more than anything. Will the money I've made be worth enough by the time I need it. Will I exhaust my retirement early because the cost of goods grows so much. Not worried so much about things that I won't need in retirement even so much like housing/cars etc but simply the cost of food/energy that living on a limited budget would effect even more so. You may have to take out more than you think and could live off now because the cost of those necessities could go up so much....and possibly still put you in a higher tax bracket causing a double whammy if you will. Also if this year tells you anything having a Roth is a good idea because if worse case scenario happens it is already taxed and you can draw on it in an emergency (and a greater chance govt won't penalize for doing so) or can be withdrawn without penalty for medical/educational purposes etc. Anyways...the future is hard to predict..so preparing for multiple outcomes is probably the safest way to go. my 2 cents lol

Always. The same way you diversify your investments/portfolios....always diversify your tax treatments too. 

  • Like 1
Link to comment
Share on other sites

1 hour ago, Seeking6 said:

Hold the line! Popping over $29 now. What started as a short squeeze play a couple months has turned into another one....and honestly as the world continues to open up movie theatres will do well. I'm holding mine until the fall....unless something gets really stupid.

Last Spring I bought Penn National at $5...sold a chunk at $30 and the rest of it at $50+....missed out on $50+ more per share. Oh well. Turbulent and fun times in the market!

I wish I would have gotten into this game earlier.  I am happy with my small positions of United and International consolidated airline group(British, Air Lingus are in there).  They still both have a ton of room just to get back to where they were Feb 2020.  

  • Like 1
Link to comment
Share on other sites

5 minutes ago, NotIThatLives said:

I wish I would have gotten into this game earlier.  I am happy with my small positions of United and International consolidated airline group(British, Air Lingus are in there).  They still both have a ton of room just to get back to where they were Feb 2020.  

I do this just with fun money. 90% of our house is mutual funds. Hire great fund managers and sit back. Picking stocks here and there is more to have fun with buying opportunities and other trends. Mostly I let the pros do their thing. 

  • Like 1
Link to comment
Share on other sites

2 hours ago, Seeking6 said:

I have 500 at $5 and another 100 at $16.50....trying to pick a number as I type but honestly I still feel selling before the fall would be a mistake. Even if reopening is being priced in over coming weeks it just makes sense to ride it out until football season.

holy hell, good for you!  

  • Like 1
Link to comment
Share on other sites

2 hours ago, Seeking6 said:

I have 500 at $5 and another 100 at $16.50....trying to pick a number as I type but honestly I still feel selling before the fall would be a mistake. Even if reopening is being priced in over coming weeks it just makes sense to ride it out until football season.

I don't think reopening is going to move the needle very much. The regal is already open here in Carmel and last Friday there were about 12 cars at 7:00 p.m.

If anything they're losing money by having the doors open with staffing and that small of crowd. 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...