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I am still convinced they will means test Roth’s some day when they get desperate.
*Investors Blog*
- Thread starter Warstud
- Start date
Even taxing all IRAs as they sit/stand was raised by some (lefty) nutters right when a certain pop President took over, man that was like 16 years (?) ago??. The backlash was furious. Then of course they denied it!!
Yeah, this market is fun, unbelievable. My wife who handles her own 401k without any input from me is doing great.
My 401k the same with just index funds and I rarely check it.
Whenever I post a trade in here the account below is my spec Roth account. Im in rough numbers almost 70% in WMT and 30% in GM.
Even though its my spec account, I only call it that is because I am never in more that 3 (a while back maybe 4) what I call safe conservative stocks. Im just looking for solid returns, not spec in the sense that some of you do in here and make a killing.
The WMT I added to in case and when this all falls apart that none of us know when, I had significant holding in WMT for a while now and I slept easy during covid. I will sleep easy should this economy fall apart too ... and the GM I trade in and out of last year, At times did ok, others just broke even and this year I bought it back just a short while ago and up 13%+
Anyway below is my one year UNREALIZED returns and YTD Unrealized returns. I didnt do as well as the Nasdaq last year, in fact clobbered only because Nasdaq did so well but I have caught up a bit this year. Though I beat the DOW and tied the S&P 500 for a one year period. (unrelated my untouched 401k is in the 3 major index funds)
I look at these returns and think maybe I should just do what I do with my 401k at this point in my life and stick with index funds in my Roth. But, I firmly believe in a market crash my big old stoggy WMT will hold up far better then the 401k's with the index funds, much like WMT did during covid. The 30% in GM doesnt count as much, as I can trade that out anytime, meaning it's for short term gains that I think safe.
FYI- Just talking here, I know others do far better, know FAR more than me and by no means do I think anything great, its easy to make money in an up market but holding onto those unrealized gains is my goal in this account. So far its been working but its no get rich quick scheme. Sometimes I dont even know what some of you are talking about when you get into bonds and stuff. Im kind of simple that way. My major holding is actually a commercial building paid for and pays me rent for the last few decades. If it wasnt for that, I would be scared *LOL* I dont anticipate that my wife and I will have to draw on our retirement accounts until forced to by Uncle Sam. So in that respect we are lucky but I know we are certainly not as wealthy as some of you. One thing I give tanks for so far my wife and I are wealthy in health.
I expect the YTD return to continue to climb as the value in GM is realized but what do I know? WMT I expect to stagnate a while now up and down a couple percent until the next quarter gets closer.
This might be a good example for those younger on why investing in index funds and holding long term beats most or all analysts. Assuming history keeps repeating itself and the national debt doesnt take us down to a multi decade stagnation or worse. Still I guess as I got older I see the index funds in our 401k's performing nicely and carefree. Thing is it is easy to say in an up market, everyone is a hero and though I dont check often it was fun to check today *LOL*
This is my Roth Spec account;
My 401k the same with just index funds and I rarely check it.
Whenever I post a trade in here the account below is my spec Roth account. Im in rough numbers almost 70% in WMT and 30% in GM.
Even though its my spec account, I only call it that is because I am never in more that 3 (a while back maybe 4) what I call safe conservative stocks. Im just looking for solid returns, not spec in the sense that some of you do in here and make a killing.
The WMT I added to in case and when this all falls apart that none of us know when, I had significant holding in WMT for a while now and I slept easy during covid. I will sleep easy should this economy fall apart too ... and the GM I trade in and out of last year, At times did ok, others just broke even and this year I bought it back just a short while ago and up 13%+
Anyway below is my one year UNREALIZED returns and YTD Unrealized returns. I didnt do as well as the Nasdaq last year, in fact clobbered only because Nasdaq did so well but I have caught up a bit this year. Though I beat the DOW and tied the S&P 500 for a one year period. (unrelated my untouched 401k is in the 3 major index funds)
I look at these returns and think maybe I should just do what I do with my 401k at this point in my life and stick with index funds in my Roth. But, I firmly believe in a market crash my big old stoggy WMT will hold up far better then the 401k's with the index funds, much like WMT did during covid. The 30% in GM doesnt count as much, as I can trade that out anytime, meaning it's for short term gains that I think safe.
FYI- Just talking here, I know others do far better, know FAR more than me and by no means do I think anything great, its easy to make money in an up market but holding onto those unrealized gains is my goal in this account. So far its been working but its no get rich quick scheme. Sometimes I dont even know what some of you are talking about when you get into bonds and stuff. Im kind of simple that way. My major holding is actually a commercial building paid for and pays me rent for the last few decades. If it wasnt for that, I would be scared *LOL* I dont anticipate that my wife and I will have to draw on our retirement accounts until forced to by Uncle Sam. So in that respect we are lucky but I know we are certainly not as wealthy as some of you. One thing I give tanks for so far my wife and I are wealthy in health.
I expect the YTD return to continue to climb as the value in GM is realized but what do I know? WMT I expect to stagnate a while now up and down a couple percent until the next quarter gets closer.
This might be a good example for those younger on why investing in index funds and holding long term beats most or all analysts. Assuming history keeps repeating itself and the national debt doesnt take us down to a multi decade stagnation or worse. Still I guess as I got older I see the index funds in our 401k's performing nicely and carefree. Thing is it is easy to say in an up market, everyone is a hero and though I dont check often it was fun to check today *LOL*
This is my Roth Spec account;
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Bless you, sir! I'd love to say while working I was making more than $178,150 to get to the 24% rate bracket (married filing joint, 2022 tax tables), but that would be telling a wopper.
i am at the same tax rate in retirement as when working, but i do have some real estate I'd like to sell in the next year or two where recaptured depreciation will throw me up at least a level. Regardless, when the Trump tax cuts expire in a couple of years, all of our tax rates go back up another 3%. Hence the desire to get into Roth now as much as possible.
Before 1984, Social Security benefits were exempt from federal income taxes. In 1983, Congress passed a set of amendments that authorized the taxation of Social Security benefits. The amendments took effect in 1984. The new revenue was necessary to partially offset the corporate and upper bracket income tax reductions.
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Take from the poor who really need the SS money to live on to instead pay for what the rich should be paying for their fair share ... sounds like normal operations on the hill.
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If the SS deposits - both the person and company portions - were not taxed, then why should the payments not be taxed.
Not that I am saying your wrong on the other side of the equation.
I won’t say it keeps me up at night but I do wonder when the rules will change/what that will look like. I look at the savings potential on a Roth and wonder when someone will try something for over X million saved.
Treasury's underlying rationale for not taxing Social Security benefits was that the benefits under the Act could be considered as "gratuities," and since gifts or gratuities were not generally taxable, Social Security benefits were not taxable.
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Excellent. I will ask the company owner to stop paying me an income, and instead just send me gratuity payments. No tax liability. Problem solved!
The idea was, and is, current payments go to prior generations of tax payers. My benefits are someone else's payments. Hence, a gratuity. Just like the original beneficiaries.
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Hey, I am not going to argue with tax free, but still makes no sense. Your not paying in by free will - its garnished. Then your entitled to a benefit per the current law. No one gives it to you, you have to apply.
By the same logic a private pension should also be tax free, no? People pay in before you. Some people die before there even eligible. You get money out at retirement?
Not to mention the fund was put "on budget" in the 60's so at that point its not quite the general fund, but close.
Here is where your argument, as I think I understand it, breaks down. As a teacher, I paid pre tax into my retirement fund, just like into a regular 401k. And, just like distributions from a 401k, retirement payments from that retirement fund are taxable. I pay into Social Security post tax, just like into a Roth 401k or IRA so Social Security distributions should also not be taxable.
Now I did like the mention above that the employer matches your Social Security payments. That would justify having to pay taxes on 50% of your SS distributions, regardless of your total income. There can be no logic whatsoever on setting a threshold at an arbitrary amount, and taxing 85% as ordinary income if you exceed that threshold, other than the fact the government can make arbitrary laws and get away with it.
Biden budget proposal | Tax hikes | Fidelity Investments
The Biden Administration's latest budget proposes changes to the top tax rate.
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JHZR2
Staff member
Huh?
At least how it looks to the layperson, those deposits are very much a tax.
I suspect given the progressive tax code, if all you get is a small ss payment, there’s no real tax. If you make too much, what you earn or distribute above the SS payout is taxable according to its type.
It would be stupid for ss to be paid, just to be returned. I suspect that’s a scheme to make the optic that ss is paying more, but net payout less.
It would be reasonable that an ss elligibke person would just subtract ss income received from total income received, so agi wouldn’t include it. But that doesn’t seem to be how it works…
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Well its not a "tax" in a pure sense of the word. Its a sort of pension. You pay, and also our employer pays on your behalf - and that money goes into the social security trust fund, not the general fund.
You have no option not to pay, so from that standpoint you can call it a tax, however given the financial expertise on this thread, I would say we can agree its at least not a direct tax.
The fund Must only invest in US treasuries - so that part is sort of an extortion. Its a way for the government to fund their debt. From time to time the government has stolen from it - such as payroll tax holidays, or in some cases a direct withdrawal / IOU. Some would call the artificially low ZIRP theft - but that could be said well beyond SS.
When you take SS they look back at your payment history and actuarily come up with a payout amount. That part is not much different than a private pension.
However here is one that is very different than a private pension - its progressive - meaning the more you pay in, which is linear, the less you get back. The ones that pay the least get the most, as a percentage of what they put in.
JHZR2
Staff member
Agree it’s not a tax, but since it’s compelled payments and then payback, I see no reason why they couldn’t just reduce the payout, retain solvency a few seconds longer, and make things more straightforward.
Yeah, right…
Good point. But my option isn’t looking that good.
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They will. They will lop off or cap the ones that paid in the most - because their "rich".
Then they will means test and tax your Roth.
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