401(k) isnt really a good deal unless you earn $1mm+ (Julia)
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Date: January 20th, 2018 2:33 PM Author: French Brunch
You’re really fucking dumb. No. You do not avoid the income tax - you are just paying it later when you claim the distribution. Theres no telling what your income bracket will beat retirement - if you’re a working professional who saves regularly, it may well be higher. Just do some basic reading and educate yourself:
https://www.google.com/amp/s/www.fool.com/amp/retirement/general/2015/01/25/which-retirement-account-should-you-tap-first.aspx
In most cases, you want to draw on taxable accounts first. In a few cases, you’ll need to draw more from 401ks to manage the RMD issue.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197427) |
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Date: January 20th, 2018 2:44 PM Author: tan cerebral church gaming laptop
1. Millenials aren't going to get rich af starting in middle age. There is not "no telling." I know this is the conventional wisdom but just think about it for a second. You can pretty much tell where you'll end up based on OCI and phenotype.
2. 401k money is still money that no one can get to i.e. if you get sued and shit. If you randomly get rich in your 50s - good for you! Now you have other accounts to draw from that are more advantageous! Hooray! So you draw the 401k money last - so what? Something has to come last.
3. Income is generally low af in retirement and when it's not, that is generally apparent relatively early in one's life.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197490)
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Date: January 20th, 2018 2:38 PM Author: Insecure Maroon Fortuitous Meteor Sandwich
On non 401k gains you pay capital gains on your earnings.
yes you is income tax on your earnings in 401k but the earnings are much higher than if you had paid income tax originally (non 401k).
I'm not doing the math for you but if you do it you'll see
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197463) |
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Date: January 20th, 2018 2:43 PM Author: Insecure Maroon Fortuitous Meteor Sandwich
You've proven to be a retard time and time again on here. I'm not arguing with an idiot any longer.
If you want to do the math to show I'm wrong go for it.
Wtf do you think the advantage of a Roth is?
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197487) |
Date: January 20th, 2018 3:04 PM Author: Insecure Maroon Fortuitous Meteor Sandwich
Example for Julia:
Suppose you invest $10k in 401k 20 years before retirement with a 30% marginal rate (that you avoid). 10% yearly growth gives you about $25,937 in 20 years. Say your income is still taxed at 30%, that leaves you with $18,156 when withdrawn.
If you instead put the $10k in normal account and pay the 30% tax now, in 20 years at 10% growth that comes out to $18,156, but you are done paying taxes. So equal to 401k.
But wait! In the second scenario you are paying capital gains taxes on the interest and dividends every year and when you sell you are paying it on the gains.
So it comes out to much less than the 401k amount of $18,156 even if there is no income tax rate advantage.
Julia?!?!
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197648) |
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Date: January 20th, 2018 3:48 PM Author: French Brunch
This is, again, stupid:
1) Long-term capital gains rates are zero for most middle-income filers, so there's no advantage vs. a 401K - especially if they want to withdraw before full-retirement age and avoid penalties.
2) What in fuck are you talking about interest? A typical equity portfolio carries no interest.
3) You can engage in tax-loss harvesting, etc, to offset a portfolio that includes other types of assets.
4) 401K fees and offerings are often less advantageous than a taxable account.
5) Funds in a brokerage account can be converted into IRAs, or you can pool many account types, making you a preferred customer and qualifying you for preferential treatment/rates.You can't convert a 401K into anything except a rollover account.
6) Opportunity cost of keeping money tied in a 401K and not invested more lucratively elsewhere.
Again, the advantages of a 401K are limited to 1) Employer match 2) bankruptcy protection, 3) lowering current taxable income ( for IBR or PAYE, for example), and 4) encouraging undisciplined savers to keep heir hands out of the cookie jar.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35197984)
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Date: January 20th, 2018 3:54 PM Author: Insecure Maroon Fortuitous Meteor Sandwich
Ljl. So basically you listed a bunch of exceptions to refute the capital gains tax savings (which you denied existed earlier); most of which don't even make sense.
Just do never have dividends or bonds! You really are the worst combination of arrogant and dumb.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35198031)
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Date: January 20th, 2018 4:59 PM Author: rusted organic girlfriend
The real answer here is “diversify on tax”, just as you diversify on the underlying securities.
I have about 3x more in my Roth than in 401K accounts (and I also have about the same amount as is in the 401K in normal accounts), but I have no problem at all putting eggs in both (or all three) baskets, though I avoid holding bonds in my normal, taxable account. Who knows what tax rates are going to be 40 years from now? I tend to think Roth accounts are likely to be a better deal overall, but those, too, depend upon the government not deciding just to double-tax the money after all. If there are low-ish income years in retirement where it’s advantageous to do so, I’ll pull extra from the 401K and come out ahead. If not, well, I favored the Roth anyway.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35198394) |
Date: January 21st, 2018 11:25 AM Author: self-centered goal in life menage
Dividends, bonds, or any other interest bearing instrument are never taxed while held in a tax-sheltered account. In other words, you can enjoy 30+ years of growth without the government taking it's yearly cut.
I'm not reading through sub-thread wastelands, but there are many people that do not make a million dollars per year, and would have a good reason to hold dividend paying stocks or bonds in their investment portfolio. If they do so, it is more advantageous to hold them in tax sheltered accounts. I don't see how this is open for serious debate.
Edit: this point is separate and independent from issues such as fund/administrative fees, and the ROTH vs Trad issue. Those things vary from person to person.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35202368) |
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Date: January 21st, 2018 7:00 PM Author: out-of-control ape
Julia spends a few dozen hours every month scanning clickbait 'personal finance hack' listicles to rip off for her own 'freelance finance writing' career. career should probably be taken in the loosest sense possible, given the individual being discussed.
anyway, she has lost touch with ordinary financial reality because she only understands personal finance as some kind of 'identify hacks/tricks/loopholes' scheme where decades-long sound planning for security and growth is reduced to a few binary points targeted at middle class neckbeards and Carmella Soprano-style hausfraus who can't really grasp how investment works.
Julia is moste definitely the type of dilettante who is too dumb and lacks the background to overcome her own posturing, so she inevitably grows to think that the bullshit she sells to the gullible/indifferent is actually great advice.
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35205019) |
Date: January 21st, 2018 5:21 PM Author: Curious National
:_(
I max out 401k every year, get a 1/2 match, borrow against my 401k and invest those proceeds into stocks. Shrewd?
(http://www.autoadmit.com/thread.php?thread_id=3865563&forum_id=2#35204324) |
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