Posted on 04/17/2021 10:30:11 AM PDT by DIRTYSECRET
Ok my friends. How many of us are there out there? I'm talking about those of us that started out when IRA inputs were $2k/yr. How many of us now have $1 million in our nest eggs doing nothing but making them bigger? No touching it until age 70+.
Next, how is it gonna hurt anything if congress allowed us to take out $100k tax free? You already know who's gonna squeal. Tax cut for the rich?-who cares? Does a guy with a million dollar nest egg really feel rich? Not if they've been prudent all those decades. Take it out early and uncle Sam doesn't lose as time will replenish what was taken. The left won't acknowledge the economic benefits.
I know a Publix cashier that is retiring soon w/ over $1M in her retirement account. She has that money waiting for her because she worked her ass off and saved her money.
I’m 70 and I wish I had your problems.
I always thought a good tax law would be to allow people to withdraw 401K money to pay off home mortgages tax free, or at the very minimum, penalty free for the under 59.5 cohort.
That would be a social good that would promote family stability and be wildly popular for the party that did it.
Predictably, the Republican losers never thought of it and would pee in their pants in fear if someone actually proposed it.
Put it on the ballot like Prop 13 in Calif.(1978). Watch all the people register to vote for the first time. Put the left on the instant defensive.
There’s more for those that don’t have a million. It’s taxes on SSI. Eliminate them. It’s like a $3-5k raise every year. Our argument is simple: you paid into it with taxes. Tax them again?
Last remind the millennials(under 40 y/o) how SSI won’t be there for them and another way (for them) will be promised.
I’d be happy to have a thousand in the bank.
Just became eligible for penalty free withdrawals last year. Took out as much as i could while remaining in the 12% tax bracket.
Who is OASDI and why do they receive so much of my earnings?
BTW my friends the main line here is how to win. Reagan won with it and so did Howard Jarvis. Took some real fighting because the left didn’t know what to make of it. We’d have them by the short hairs.
I say if you are over 62 and have at least 500K liquid and little to no debt, take your SS early and enjoy yourself. Seen way to many hold outs die before they draw out even 10%. Their children are living the dream however.
Hit 7 digit net worth last year at 38 for the first time! Thanks to a good year with work, housing prices rising and the stock market rising, pushing up at a very rapid pace at the moment! I have no plans to withdraw any from retirement accounts even tax free since I have plenty of non-retirement assets as well, including more cash than I’d care to sit on making 0.15% at the moment. I max out 401k at work as well as a similar amount in our NQDC plan, each of which with half match, and also set aside most of my annual bonus and stock grant for savings/investments. Still hoping/expecting to retire between the ages of 45-48.
Some or all of your RMD can be rolled over to your favorite charity tax free. I did that a bit in 2019. I’m going to do more this year. I’ll calculate how much we give and then do it through our IRAs. I think I can roll over stock as well as cash so I would roll over some of the stock I’m not real fond of. I know that my church will have it in a managed account and they’re just liquidate it and put it in boring mutual funds.
There would have to be limits on how often, how old of a loan and how much, or you could simply buy a home with a mortgage even if you had paid off your prior home, then withdraw your 401k or IRA entirely tax free to pay off the new “loan.”
That’s what I told my parents and they didn’t even have that much liquid. My mom took hers at 62 and my dad at 66.
RMDs really aren’t that bad for most people - it starts off at only around 4% of your portfolio, which is below the expected market return of 7-8%. I just roll my parents RMD into their regular trading account. Their effective tax rate is sub 10% so very little leakage.
This one-time concept would plant the seed for future repeats by observing the results short-time.
Back to millennials. Target $500k. Let those living with their parents to stash up to 100% of their earnings(tax free) until they hit that $500k target.
Once you clear 59 1/2 yrs. the IRS considers any distribution as ordinary income.
...that’s great and a very good bracket and savings. EVERYONE with >$100k should be converting 401k/IRA assets to Roth, starting NOW at ANY age and pay current taxes, UNLESS you actually think income taxes will be lower in the future.
At least “fill up the bracket” ie convert enough at the highest dollar bracket you are paying this tax year (or even the next bracket if only 2% more) to get the rest of your lifetime gains Roth TAX FREE!! ONE of the last great tax legal tax breaks, the Roth conversion and the Roth backdoor contribution... ymmv
The after tax portion of the RMD can be used pay the taxes on a Roth Conversion for that year.
Then, likely, less RMD next year.
Once you clear 59 1/2 yrs. the IRS considers any distribution as ordinary income.
That’s the reason for this post. Those that have taken care of their own business can help out those that are still working and can do it without government help. Watch the economic growth and people will learn. Do it every 10 years, or at least offer it.
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