Do you really think bonuses are taxed at 8%? Maybe u meant something else.
Retirement Targets
- Thread starter yowza
- Start date
I've been thinking about retirement broadly. I tend to think about financial well being as a family unit; wife, kids, and now grandkids. There are a couple ideas that swirl around in my mind about retirement
1. I make good money as an engineer. Not get rich, generational wealth type of money but good enough to know its not easily attained. As someone who thinks in terms of a family unit, what obligations due I have to continue working to help build wealth for my kids and grandkids who may not have the same opportunities?
2. Work is part of who I am. I know retiring is going to take a major shift in my thought process.
Basically, I know, at 53 years old, I want the ability to retire; understanding my mindset might change as I get older or circumstances may force me to retire. Other than that, I'm not sure what I'm going to do yet.
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I’m not sure why one wouldn’t tax diversify as well. I fund both Roth and Trad accounts. And pay for medical expenses out of pocket to keep my HSA invested.
I should be good at 55 and plan to travel some and run my new granddaughter around to school etc. And keep doing TKD.
That’s good.
I still struggle though. How many hours per day is that? 30 minutes to & from school? 90 minute TKD class? Add in a round of golf or fishing every GD day, and you still have gobs of time available that you didn’t before.
I’d love to ditch the corporate job in my 50s. But I’m going to need to find another job with a large social factor I enjoy. Or develop a marketable skill I can start a business with, selling the product of something, like woodworking, etc.
Per 1, isn’t there a cap on payouts too? Which means if you max out SS tax payments, you also can hit a ceiling on payments to you when you draw.
If your tax bracket happens to stay identical (meaning they don’t put the 12 back to 15%), then short term the traditional would be better since Iowa doesn’t tax retirement funds but the Roth would have paid taxes going in.
One question, are the traditional funds currently with that investment advisor…….?
Those are contributions, and I stated that roth contributions are taxed.
Put $10,000 in a roth when you are 30. Yes, you paid tax on whatever income produced that $10,000 contribution. Now let it sit there and double 4 times to $160,000 when you turn 65. The $150,000 that you earned will never be taxed when you take it out.
Yeah, you paid $2000 or so in taxes on the original $10,000 you put in. Big f'in whoop. Your marginal tax rate at the start is totally irrelevant when discussing the $150,000 in earnings that accrued inside the roth account. And your marginal tax rate at the end doesn't matter because it is a roth.
The true power of a roth is the fact that earnings are not taxed, and earnings require time.
H
So….if a farmer owns 320 acres and had no cash or investments, sold his last crop and equipment to pay off land debt; he doesn’t deserve any SS?
No, I think the investment class is only paying 8% tax overall. Look at people like Warren Buffet and others that have come out and stated they pay very little federal tax under our system. Between buy, borrow and die and shell companies to hide their assets, the investment group at the top of the mountain are not paying taxes at nearly the rate they should be. Bonuses are taxed at a lower rate than general income.
Similar vibes for me. I’m a scientist, making good money to do work that I find deeply gratifying overall.
There are many aspects of my daily work that feel like a frustrating administrative/paperwork grind….
I’m hopeful that, if career progresses as hoped, I’ll have enough political capital (and grant funding) to do less and less of that work from age 60-70, and be able to spend more time focusing on the satisfying parts of my job, while still feeling enough flexibility to spend time with family (by that age, my kids would be hitting ages where they might be starting families too). If I hit 65 and work still feels like an unsustainable grind that takes too much time away from family, I should be able to walk away with no financial concerns
Haha yeah no way. My bonuses are great but taxed so freaking high. You can get around taxes with stock options but not bonuses. That is a salary and taxed, heavily.
You would have to look at a case by case basis, just like you would any other business. I am not suggesting that a small businesses owner or small farmer not get it. But larger farms or business owners, no it should be means tested.
This is the biggest problem we have with taxes, deciding who really needs a program like SS and those that do not. I get the idea that if you pay in you should get money back, then set a limit. Taylor Swift should not be getting a half a million a year from SS when she can start pulling it out, even though she has paid say a million a year for decades. Say 8 grand a month and that is it. Not sure why we have people lining up taking the side of the wealthy at their own expense, but it's common now.
Exactly. The roth vs traditional debate requires that we define and treat contributed dollars separately from earned dollars. Contributed dollars are always taxed at some point. For a roth, that is up front when the money goes in. For traditional, contributed dollars are taxed at the end when you withdraw.
Earned dollars are also taxed at the end in a traditional. But for a roth, they are simply never taxed .... ever.
My nest egg is at a point where it earns more per year than I do when the market is behaving somewhat normalish. If my entire nest egg was roth, imagine how powerful it would be to have a six figure income that is completely free of taxation forever. Alas, most of my nest egg is traditional money.
And for those of you who don't want to think of contribution money separate from earned money, try making a roth withdrawal before you are 59. The IRS will be very interested in whether you withdrew contribution money or earned.
Lastly, for an absurd example of the power of time+earnings in a roth, google "Peter Thiel roth".
H
Why should farmland be valued any different than any other asset when it comes to means testing?
Google suggests that land would be worth around 3.5 million.
If SS means testing rules are passed that strip SS benefits from anyone with a net worth over 3.5 million, do you think farmers are entitled to some special exemption from that rule?
If you don't trust the government with roth earnings, why would you trust them with HSA withdrawals?
H
Wait…….huh??…….where are you getting that? You saying maybe what gets withheld originally?
3.5 million would be low for phasing them out, but set the bar at 10 million in assets, and it would still allow 98% of Americans to get SS.
Before the last drop land in this area was selling for $13-18k per acre. 5MM is hit at 15.625k
They aren’t selling the land because they figured that was their retirement base. 300 rent minus 40 acre prop tax leaves them right at 80k on 310 tillable.
