Author Topic: New To Investing Thread  (Read 327330 times)

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Offline IPA4Me

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Re: New To Investing Thread
« Reply #3725 on: April 01, 2021, 10:53:06 AM »
Why TF would you want to eliminate tax advantaged retirement?

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Offline michigancat

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Re: New To Investing Thread
« Reply #3726 on: April 01, 2021, 10:54:24 AM »
Why TF would you want to eliminate tax advantaged retirement?

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I don't, I'm questioning why they were invented

Offline steve dave

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Re: New To Investing Thread
« Reply #3727 on: April 01, 2021, 10:57:19 AM »
Roth seems good for young people. You're paying taxes in a lower bracket than you likely will in your 40s and 50s. Doesn't make much sense for me. Highly unlikely that I'll be in a higher tax bracket after retirement. My income will be 50-75% what it is now.

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Yeah, but the discussion isn’t over Roth v traditional. If you don’t qualify for a Roth or traditional tax advantaged ira you can still back door a Roth.


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Offline IPA4Me

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Re: New To Investing Thread
« Reply #3728 on: April 01, 2021, 10:58:34 AM »
Roth seems good for young people. You're paying taxes in a lower bracket than you likely will in your 40s and 50s. Doesn't make much sense for me. Highly unlikely that I'll be in a higher tax bracket after retirement. My income will be 50-75% what it is now.

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Yeah, but the discussion isn’t over Roth v traditional. If you don’t qualify for a Roth or traditional tax advantaged ira you can still back door a Roth.


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If I backdoor the Roth, don't I pay taxes at my current bracket on the money I rolled?

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Offline steve dave

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Re: New To Investing Thread
« Reply #3729 on: April 01, 2021, 10:58:56 AM »
you already did my man

Offline 'taterblast

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Re: New To Investing Thread
« Reply #3730 on: April 01, 2021, 11:13:43 AM »
yeah google "form 8606"

Offline Justwin

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Re: New To Investing Thread
« Reply #3731 on: April 01, 2021, 11:17:12 AM »
i just did my first "backdoor" Roth IRA transfer and it wow what a stupid thing, why don't they just open up Roth to everyone.
Why have Roth's at all if you want to talk about things that don't make sense

I don't follow, it's just betting on which direction is more tax advantageous based on current earnings/long term market expectations. I can also see why a gov't may want to push people towards give me the tax dollars now rather than later.

why should you have to gamble your retirement on possible tax advantageous scenarios. Like as a general principle.

I don't know how the math works out but there could be a shitload of revenue generated for social security if you eliminated tax-advantaged retirement funds altogether.

How are you gambling your retirement when tax-advantaged accounts only help your retirement?

Can you explain how eliminating tax-advantaged accounts would boost revenue for Social Security?  You still pay FICA taxes on contributions made to tax-advantaged retirement accounts.  The only taxes you avoid are individual income taxes.

Offline IPA4Me

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Re: New To Investing Thread
« Reply #3732 on: April 01, 2021, 11:35:40 AM »
i just did my first "backdoor" Roth IRA transfer and it wow what a stupid thing, why don't they just open up Roth to everyone.
Why have Roth's at all if you want to talk about things that don't make sense

I don't follow, it's just betting on which direction is more tax advantageous based on current earnings/long term market expectations. I can also see why a gov't may want to push people towards give me the tax dollars now rather than later.

why should you have to gamble your retirement on possible tax advantageous scenarios. Like as a general principle.

I don't know how the math works out but there could be a shitload of revenue generated for social security if you eliminated tax-advantaged retirement funds altogether.

How are you gambling your retirement when tax-advantaged accounts only help your retirement?

Can you explain how eliminating tax-advantaged accounts would boost revenue for Social Security?  You still pay FICA taxes on contributions made to tax-advantaged retirement accounts.  The only taxes you avoid are individual income taxes.
Thank you for bringing common sense back to this discussion.

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Offline Spracne

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Re: New To Investing Thread
« Reply #3733 on: April 01, 2021, 11:37:03 AM »
Roth seems good for young people. You're paying taxes in a lower bracket than you likely will in your 40s and 50s. Doesn't make much sense for me. Highly unlikely that I'll be in a higher tax bracket after retirement. My income will be 50-75% what it is now.

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Yeah, but the discussion isn’t over Roth v traditional. If you don’t qualify for a Roth or traditional tax advantaged ira you can still back door a Roth.


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If I backdoor the Roth, don't I pay taxes at my current bracket on the money I rolled?

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I believe you have to pay taxes on any untaxed profit at the time of conversion. But if you do it right, that should be almost nothing.

Offline steve dave

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Re: New To Investing Thread
« Reply #3734 on: April 01, 2021, 11:42:02 AM »
Roth seems good for young people. You're paying taxes in a lower bracket than you likely will in your 40s and 50s. Doesn't make much sense for me. Highly unlikely that I'll be in a higher tax bracket after retirement. My income will be 50-75% what it is now.

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Yeah, but the discussion isn’t over Roth v traditional. If you don’t qualify for a Roth or traditional tax advantaged ira you can still back door a Roth.


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If I backdoor the Roth, don't I pay taxes at my current bracket on the money I rolled?

Sent from my moto g power using Tapatalk

I believe you have to pay taxes on any untaxed profit at the time of conversion. But if you do it right, that should be almost nothing.
Yes, should be zero. Deposit and immediately convert.


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Offline michigancat

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Re: New To Investing Thread
« Reply #3735 on: April 01, 2021, 11:46:46 AM »
How are you gambling your retirement when tax-advantaged accounts only help your retirement?

you are gambling on future tax rates and earnings when you choose between traditional and roth (not to mention putting your retirement in the stock market)


Can you explain how eliminating tax-advantaged accounts would boost revenue for Social Security?  You still pay FICA taxes on contributions made to tax-advantaged retirement accounts.  The only taxes you avoid are individual income taxes.

yeah you'd have to change how SS is funded, that's why I said it "could" and not "would"

Offline ben ji

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Re: New To Investing Thread
« Reply #3736 on: April 01, 2021, 11:51:07 AM »
It's not gambling when you put money in the stock market, stonks only go up.

Offline catastrophe

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Re: New To Investing Thread
« Reply #3737 on: April 01, 2021, 12:05:38 PM »
How are you gambling your retirement when tax-advantaged accounts only help your retirement?

you are gambling on future tax rates and earnings when you choose between traditional and roth (not to mention putting your retirement in the stock market)


Not gambling if you don’t meet the income threshold for a Roth. Almost by definition it means you cannot contribute to an IRA pre-tax.

And yes to Benji’s point, if you got a 20+ year retirement horizon, it’s practically a certainty you’ll come out ahead. And if you don’t, the rest of the country will be hurting in a big way and you’ll have other problems to worry about.

Offline catastrophe

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New To Investing Thread
« Reply #3738 on: April 01, 2021, 12:07:52 PM »
Which, on that point, is actually how I finally got talked into buying bitcoin. Friend pitched it to me as a hedge against a shift away from traditional markets. I’m not banking on it for my retirement like I am ETFs, but it does feel nice to own a totally different valuable asset which (unlike real estate) also takes zero effort to take advantage of financially.

Offline steve dave

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Re: New To Investing Thread
« Reply #3739 on: April 01, 2021, 01:43:46 PM »
Which, on that point, is actually how I finally got talked into buying bitcoin. Friend pitched it to me as a hedge against a shift away from traditional markets. I’m not banking on it for my retirement like I am ETFs, but it does feel nice to own a totally different valuable asset which (unlike real estate) also takes zero effort to take advantage of financially.

yeah, I've got a set amount I put into coin every month.

Offline Fedor

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Re: New To Investing Thread
« Reply #3740 on: April 01, 2021, 04:26:54 PM »
also irl you'd have to pay cap gains on the profits and that on top of the interest on the HELOC means you'd have to have a damn sure insider trady thing to make it make sense. also PM me that thing so I can get rich with you.
Those returns could be found on the efficient frontier without an undue amount of risk, is something that I feel like someone is smart about these things would say but I have no idea.
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Offline steve dave

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Re: New To Investing Thread
« Reply #3741 on: April 01, 2021, 04:54:31 PM »
here's the thing about banks, they wouldn't loan it to you at that rate if there was guaranteed money at a greater rate. mostly.

Offline catastrophe

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Re: New To Investing Thread
« Reply #3742 on: April 01, 2021, 05:12:04 PM »
Constitution says congress can basically tax whatever they want. So just keep that in mind if you own literally anything at all.

Offline Kat Kid

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Re: New To Investing Thread
« Reply #3743 on: April 01, 2021, 05:18:23 PM »
dumb question, what is the legality of un-Rothing a Roth like 30 years from now, as in law changes to allow taxation on my earnings?
Would basically take a socialist Revolution, WHICH I WOULD WELCOME, but isn’t likely.

Offline ben ji

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Re: New To Investing Thread
« Reply #3744 on: April 01, 2021, 05:21:29 PM »
dumb question, what is the legality of un-Rothing a Roth like 30 years from now, as in law changes to allow taxation on my earnings?

That is a possibility.... But in the highly unlikely situation where that were to happen I'm sure there would be some loophole for you to exploit in the 5 year window etc before it goes into effect. 

Roth IRA's weren't even a thing 30 years ago, who knows what taxes/retirement accounts will look like in 30 years. Just keep throwing money in whatever is best right now and when that changes figure out what the new best thing is and shove all your money in that.

Offline KITNfury

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Re: New To Investing Thread
« Reply #3745 on: April 01, 2021, 06:19:58 PM »
dumb question, what is the legality of un-Rothing a Roth like 30 years from now, as in law changes to allow taxation on my earnings?

That is a possibility.... But in the highly unlikely situation where that were to happen I'm sure there would be some loophole for you to exploit in the 5 year window etc before it goes into effect. 

Roth IRA's weren't even a thing 30 years ago, who knows what taxes/retirement accounts will look like in 30 years. Just keep throwing money in whatever is best right now and when that changes figure out what the new best thing is and shove all your money in that.
Right. I always figure the rich make the rules so do what they do. They will likely resist screwing themselves over.
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Offline catastrophe

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Re: New To Investing Thread
« Reply #3746 on: April 01, 2021, 08:39:23 PM »
Backdoor Roths existing is a great example of this in action^

Offline steve dave

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Re: New To Investing Thread
« Reply #3747 on: April 01, 2021, 08:46:33 PM »
I don't think the actual rich GAF about anyone backdoor'ing a roth. it's strictly the domain of the upper middle class/high earner non wealthy.

Offline Spracne

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Re: New To Investing Thread
« Reply #3748 on: April 01, 2021, 08:58:44 PM »
I don't think the actual rich GAF about anyone backdoor'ing a roth. it's strictly the domain of the upper middle class/high earner non wealthy.

This reads autobiographically. stevedave, let's start a business and get actual wealthy.

Offline ben ji

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Re: New To Investing Thread
« Reply #3749 on: April 01, 2021, 08:59:37 PM »
Yeah, actual rich people crap is how Mitt Romney ended up with 100 million in his IRA.

And that was back in 2012 when he was running for president.