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three posted:Smartypig is 1%, and is FDIC through BBVA Compass. Any reason not to use it? How about because any institution named "smartypig" just doesn't seem serious enough to put my money into their hands? I mean really, smartypig? really? I also wouldn't buy a car from a dealership called "Kitten Kar Klub". Yes, I realize this is superficial and a bit stupid, but I can't help it.
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Jul 9, 2013 18:26
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So I'm a fresh out of college student working my first job ever and know almost nothing about finance except for what I've learned over the past 2 days just reading hours upon hours of early retirement blogs and smart investing/saving. I think I'm on the right track, but I thought I would ask you goons to make sure and guide me. 1. I've already set up my 401k through Fidelity, and my company matches 25% up to $1250. So this means I want to contribute at least $5k every year from my paycheck correct? 2. I just looked up tax brackets and I fall into the 25% range. However, I've heard that money that you put into your 401k doesn't count towards your yearly income? So if I'm making $50k a year and I put enough money into my 401k for the year, I am essentially in the 15% bracket? If this is correct, are there other ways to lower my "usable" income? (I'm not sure what the terminology is) I'm asking because with 401k alone I can't actually fall into the lower bracket, so if there are other savings/investment accounts I can contribute to, I would love to know. 3. Why is putting money into a Roth IRA early a good idea? If I understand correctly, the money is taxed first and then put into the account. If I am currently in the 25% bracket, wouldn't it be better to put that into a regular IRA and convert later to a Roth IRA when I will probably be making less money annually? 4. I have no savings and about $5k in student loans. I want to get the Vanguard Total Stock Market Index Fund, but from what the OP says I should instead just focus on paying off my loans first and start putting money into my savings account (that I still need to open...) Also, I've heard Vanguard is much better than Fidelity. I'm allowed to have an account on both Fidelity and Vanguard right? Do I still get company matching if I move my 401k to Vanguard?
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Jul 9, 2013 19:42
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4. Work on building an emergency fund while simultaneously contributing to maximize your employer's matching. You don't want to be vulnerable should something happen.
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Jul 9, 2013 20:41
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enthe0s posted:So I'm a fresh out of college student working my first job ever and know almost nothing about finance except for what I've learned over the past 2 days just reading hours upon hours of early retirement blogs and smart investing/saving. I think I'm on the right track, but I thought I would ask you goons to make sure and guide me. 1. Yes 2. Correct; your 401k contributions come out of your paycheck before taxes are applied. Therefore your taxable income is lower and you enter a lower bracket. (Note that tax brackets aren't fixed at 15, 20, 25, etc. You can pay 16%, 21%, 26%, and so on depending on exactly how much you make. Therefore you don't need to worry about lowering your income to get in under some cap number to drop 5%). 3. Because you'll be lowering your tax rate through your 401k contributions, and because it is a hedged bet against your future tax situation and whatever tax laws apply in the future. Roth IRAs are also awesome because you have MANY times more choices of funds than a 401k does. 4. Pay off loans for sure, but don't let a 4.5% mortgage or a 5% student loan keep you from starting a retirement account in the next 30 years. 5. Vanguard and Fidelity are options for your IRA. You only have one option with your 401k: Participate or don't. Your employer chooses a 401k plan (a company and several fund options) and you get to choose from those. As an example, I have the option of opening a Roth and/or Traditional IRA at any company and can purchase any available funds I want. My employer has a 401k plan through Charles Schwab with 9 fund options. If I want to have a 401k, my only option is to enroll in the Charles Schwab plan and select from the 90 funds.
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Jul 9, 2013 20:43
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Please have an emergency fund before you decide to invest. 6 months of expenses, to be pretty safe.
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Jul 10, 2013 01:57
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enthe0s posted:2. I just looked up tax brackets and I fall into the 25% range. However, I've heard that money that you put into your 401k doesn't count towards your yearly income? So if I'm making $50k a year and I put enough money into my 401k for the year, I am essentially in the 15% bracket? If this is correct, are there other ways to lower my "usable" income? (I'm not sure what the terminology is) I'm asking because with 401k alone I can't actually fall into the lower bracket, so if there are other savings/investment accounts I can contribute to, I would love to know. Just to add to what the others said, this sort of reads a bit like you don't understand how marginal tax rates work (which is very common, unfortunately). Maybe you do, in which case, I apologize for making the assumption. The only part of your income taxed at your top marginal rate, is that part that is above the amount taxed at the next lower rate. And the only part taxed at that rate is the portion above the next rate below, etc. etc., right the way down to the portion of your income which is taxed at 0%. So, contributing pre-tax money to a tax-advantaged account is great because it "comes off the top", reducing the amount of income taxed at the top marginal rate. This is especially good if you earn enough that your top marginal rate is quite high. Your 401(k) is this type of account. In your scenario, some of your money is taxed at 15% and then some more at 25%. If you are single, and your taxable income is $50k, you'll be able to contribute up to the maximum of $17,500, which will leave you paying federal income tax on $32,500. You'll pay 15% on the amount from $8,925 to $32,500, and 10% on the amount from $0 to $8924. This is ignoring other pre-tax deductions, etc. so it is an oversimplification and your actual tax will likely be different, but it gives you the general idea. Contributing post-tax money to a tax-advantaged account (where you then get to withdraw from it on retirement tax-free) is great if you expect your top marginal rate when you retire to be quite high, because then you'll pay less money in taxes at that time. Additionally, any growth of your account (e.g., the returns on your investments, if they are positive) are also tax-free, which adds to the advantage. A Roth IRA is this type of account. An added benefit is that while your 401(k) investment options are determined by the plan offered by your employer, Roth IRAs are self-directed things you can invest in more or less whatever the hell you want. This often means you can shop for better deals than you can get via your employer's plan. If you are not sure whether your current marginal tax rate, or the marginal tax rate you'll pay on retirement, will be higher, it might be wise to split retirement funding between these two types of accounts. However, taking advantage of employer matching is the top priority; that's free money at a higher rate than you'll likely get from any other retirement investment, even after accounting for tax differences.
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Jul 10, 2013 02:34
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I'm 26, single and have a job with a pension with somewhere around a 65% payout. I'll gross around $65-70k this year and will retire from this job at 50 (after starting the DROP at 45). I'm also contributing to a 457b plan, currently 100% roth. Is there any advantage to splitting my contributions between roth and pre-tax, or should I roth it all?
b0bx13 fucked around with this message at 03:11 on Jul 10, 2013 |
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Jul 10, 2013 03:04
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Tenderloin posted:So I'm working for a company that has offered me the rights to a certain number of "Non-Qualified Stock Options" when I was hired (vested 25% after my first year there, and then regularly at a rate of 25% per year each year thereafter until four years have passed when I would be fully vested). This depends on a few things. I assume you work at a PE owned (or generally private) company? The answer to this actually matters quite a bit - if it's public, you'll have much more visibility into the calculation. Practically, the NQSOs will have a strike price, which means they're only worth anything if the value of the company grows in the period between you receiving them and you exercising them (or the company being sold / any other liquidity event). At that time, each vested NQSO is (effectively) converted into an underlying share at a rate of ([Price at time of conversion or sale] - [Strike price])/[Price at time of conversion or sale]. RSUs on the other hand I assume won't have strike prices, and will instead simply convert into underlying shares as they vest (and are thus each more valuable, converting at a 1-to-1 rate). Unfortunately, the specific numbers AND the specific situation really matter here, as the original strike price, the current share price, and the current valuation methodology (the numbers) and the ability for the company to increase in equity value before you need to exercise or a liquidity event (the situation) drive the ultimate value of the options. The other thing to consider is personal taxes, which matters less if it's a public company, but could be significant if it's private. RSUs are auto-converted to shares as they vest, so the capital gains clock starts ticking as soon as you vest (making it more likely you'll get LT capital gains rates on an ultimate liquidity event). Option gains, however, will only be treated as capital gains starting from the date you exercise them, and people typically don't exercise until the liquidity event actually occurs. The reason for this is that the actual exercise itself costs cash (both as a taxable event if you didn't file an 83b election, and if your employer doesn't let you "net exercise," or forces you to actually pay cash for the strike prices instead of simply accepting fewer shares at the rate I gave above)... so if there's no liquid market for the shares once exercised, you could face a huge cash charge when you exercise, but before you've gotten any of the value for the options. So like I said, in a private company context, people often don't exercise until there's a liquidity event, meaning option proceeds (unlike RSU proceeds) are taxed at the ST capital gains rate. Sorry if this is confusing, but the answer is we have no idea and really can't help without knowing a lot more details. I'd recommend you talk to someone in management/HR about it, as they can typically walk you through the theoretical math (and what you have to believe in terms of the company growing/generating cash) that would cause you to prefer options. edit: oh, and I'm not a lawyer, so talk to your own lawyer/accountant/blah/blah
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Jul 10, 2013 09:23
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Awesome, thanks for all the clarification and advice everyone. Leperflesh - I definitely did not know all that about taxes, so thanks a bunch for your explanation! So a few new questions: 1. I was putting 10% of my income into my 401k, and as of this morning I've also added another 10% to my Roth IRA. Since the max is $5500 for Roth, I'm actually putting a little bit over that amount. Is Fidelity smart enough to just stop contributing money once I hit the max amount, or is this something I will have to take care of manually? (possibly when I do my first taxes next year?) 2. Should I bother with a traditional IRA if I have a Roth IRA? Going by what Leperflesh said, it's good to have a mix if I'm unsure about my future marginal tax rate. Should I also contribute maybe $2500 to a regular IRA? I plan on "retiring" early (maybe around 35) but still plan on working, probably just not full time. 3. Since I'm matching company vestment on my 401k and maxing out Roth IRA, my next step is to just jack my 401k contribution up to the max of $17500 right? So whatever is left of my poor paycheck after doing this, I'll just throw into a savings account to start building my emergency fund.
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Jul 10, 2013 16:09
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b0bx13 posted:I'm 26, single and have a job with a pension with somewhere around a 65% payout. I'll gross around $65-70k this year and will retire from this job at 50 (after starting the DROP at 45). I'm also contributing to a 457b plan, currently 100% roth. Is there any advantage to splitting my contributions between roth and pre-tax, or should I roth it all? I will give you a million dollars if you stay at that company for 24 more years.
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Jul 10, 2013 16:12
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enthe0s posted:1. I was putting 10% of my income into my 401k, and as of this morning I've also added another 10% to my Roth IRA. Since the max is $5500 for Roth, I'm actually putting a little bit over that amount. Is Fidelity smart enough to just stop contributing money once I hit the max amount, or is this something I will have to take care of manually? (possibly when I do my first taxes next year?) I know that Vanguard stops you if you try to do transfers above the annual limit. Could be different if you're doing direct deposit. I would call them and ask. quote:2. Should I bother with a traditional IRA if I have a Roth IRA? Going by what Leperflesh said, it's good to have a mix if I'm unsure about my future marginal tax rate. Should I also contribute maybe $2500 to a regular IRA? I plan on "retiring" early (maybe around 35) but still plan on working, probably just not full time. Contribution to IRA's of any type is limited to $5500 per year. So $5500 in the IRA or $5500 in the ROTH or $2750 in both, or some other breakdown, but not a penny more. On the tax diversification question, an IRA's tax treatment is the same as your 401k (more or less), so by contributing to a ROTH IRA and your 401k you are already hedged against different tax rates in the future. quote:3. Since I'm matching company vestment on my 401k and maxing out Roth IRA, my next step is to just jack my 401k contribution up to the max of $17500 right? Yes. Unless the fund selection in the 401k is so abysmal that it's not worth the tax advantage. This is almost never the case. Some people, depending on their plans, may also choose other tax-advantaged investments in lieu of maxing out the 401k, like a 529 education savings plan if they know they'll have tuition/school needs for themselves or a dependent. quote:So whatever is left of my poor paycheck after doing this, I'll just throw into a savings account to start building my emergency fund. I would say prioritize the emergency fund over the ROTH. You can contribute for 2013 at any time between now and tax day 2014, so you can catch up later in exchange for security now. In the grand scheme of things, having a secure emergency fund when you're getting on your feet is more important than missing out on 6 months of stock market exposure decades before retirement.
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Jul 10, 2013 17:16
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bam thwok posted:Contribution to IRA's of any type is limited to $5500 per year. So $5500 in the IRA or $5500 in the ROTH or $2750 in both, or some other breakdown, but not a penny more. Wait so does the $5500 to my Roth IRA also count towards the $17500 to my 401k? I'm a little confused by your wording here, sorry.
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Jul 10, 2013 18:29
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enthe0s posted:Wait so does the $5500 to my Roth IRA also count towards the $17500 to my 401k? I'm a little confused by your wording here, sorry. No, they have separate caps. He's just saying that a 401k has similar tax treatment as a traditional IRA so it makes sense to go with a Roth IRA if you are already contributing to a 401k if your goal is diversification for future tax rates.
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Jul 10, 2013 18:38
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evilalien posted:No, they have separate caps. He's just saying that a 401k has similar tax treatment as a traditional IRA so it makes sense to go with a Roth IRA if you are already contributing to a 401k if your goal is diversification for future tax rates. This. To be completely clear: You can contribute no more than $17500 total to workplace retirement accounts (401K). You can contribute no more than $5500 total to individual retirement accounts (ROTH or Traditional IRAs) So the most you can put into any combination of these accounts is $23000, with $17500 in the 401k and $5500 divided however you like between IRAs.
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Jul 10, 2013 19:09
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Ah ok, thanks for clearing that up. Yeah, I will do that then. So there's goes over a third of my paycheck... Oh well, greater glory awaits me down the line I suppose.
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Jul 10, 2013 20:04
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enthe0s posted:Ah ok, thanks for clearing that up. Yeah, I will do that then. So there's goes over a third of my paycheck... Oh well, greater glory awaits me down the line I suppose. I think we would all like to reiterate that your emergency fund should be established as soon as possible.
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Jul 10, 2013 20:16
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ETB posted:I think we would all like to reiterate that your emergency fund should be established as soon as possible. To be honest, I'm not terribly worried about it because I know my parents can cover me if I asked them to. I just don't want to ask for their help unless I absolutely have to. Would it still be better to not max my 401k and instead just put that money away for emergency first and foremost, even though I'm in a low risk situation such as this?
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Jul 10, 2013 20:35
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enthe0s posted:To be honest, I'm not terribly worried about it because I know my parents can cover me if I asked them to. I just don't want to ask for their help unless I absolutely have to. Would it still be better to not max my 401k and instead just put that money away for emergency first and foremost, even though I'm in a low risk situation such as this? I'd say max the 401k but forget about the ROTH for now. Again, you have until April to contribute the full amount (you don't have to be putting something in with every paycheck). So once you have your emergency fund, you can very aggressively start putting any savings you have each month, or a Christmas bonus into the ROTH.
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Jul 10, 2013 20:44
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bam thwok posted:I'd say max the 401k but forget about the ROTH for now. Again, you have until April to contribute the full amount (you don't have to be putting something in with every paycheck). So once you have your emergency fund, you can very aggressively start putting any savings you have each month, or a Christmas bonus into the ROTH. Oh right, I forget that I don't have to put it away right now, so this seems like a safer option. I also just called Fidelity and found out that my 401k is split between pre-tax and Roth, which made it really confusing as I tried to figure out what that meant exactly. Because it's structured this way, I guess I actually have the option to contribute all of my 401k money as Roth, so they'll be taxed before they get put into my fund. It also sounds like this has all the benefits of a regular Roth IRA too, where any earnings I get will also be tax-free. I currently have my contribution split 50/50 between pre-tax and Roth. Should I favor one over the other?
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Jul 10, 2013 21:20
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I'm considering converting a traditional IRA to a Roth. For tax purposes, will the full amount be added to this year's income? Does it matter if I was in a different marginal tax rate when I contributed to the traditional IRA compared to when I convert to a Roth?
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Jul 10, 2013 21:27
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enthe0s posted:Oh right, I forget that I don't have to put it away right now, so this seems like a safer option. I grapple with this question too. It's unusual that a 50/50 split between ROTH and standard 401K is the default setting. But to add a little complexity to the simple explanation I gave before: You can contribute no more than $17500 total to workplace retirement accounts (401K or ROTH 401K). You can contribute no more than $5500 total to individual retirement accounts (IRA or ROTH IRA). ROTHs and non-ROTHs differ on whether they are taxed on contribution or taxed on withdrawal. The key considerations here is anticipating your tax bracket at retirement. A lower tax rate now means you should want to pay the taxes and get it over with, whereas a higher tax rate now means you should want to defer paying taxes until later. If you don't know what the case will be, contribute to both in some amount as a hedge. What, exactly, that split is? I have no idea, and I've yet to find anyone who can offer guidance on that.
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Jul 10, 2013 22:26
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e: misread the post
SmuglyDismissed fucked around with this message at 22:45 on Jul 10, 2013 |
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Jul 10, 2013 22:41
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thethreeman posted:This depends on a few things. I assume you work at a PE owned (or generally private) company? The answer to this actually matters quite a bit - if it's public, you'll have much more visibility into the calculation. Just to expand on this, PE firms will make every attempt to screw you on options. Chances are they have the voting rights to put affiliate debt and restricted stock ahead of employee grants, as well as dilute any shares employees have rights to. Don't take this the wrong way, if the EV of the firm tenderloin works for blows up, he will make a bunch and this is often enough reason to take the risk, especially if he's getting a discount or grant on the equity buy-in. But he shouldn't be surprised if the company sees solid growth and he ends up sitting on a bunch of worthless shares because the next change of ownership ends up paying out mostly to a bunch of subordinated PIK debt and restricted stock that have been accruing at rates near 20%.
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Jul 10, 2013 22:58
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So the thread title is gently caress eTrade? What's the story behind that?
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Jul 10, 2013 23:17
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bam thwok posted:This. To be completely clear: This might be a dumb question, however, does the $5,500 limit only count from my own contributions? I am putting 12% away and I get a 100%, 6% match to my Roth IRA from my company. I am also eligible for a profit sharing bonus to my retirement, which range from 0-10%, so I'm going to go over the $5,500, but my own contributions will be at $5,500. Also with the 12% I'm putting in, I'll be going over the limit near the end of the year. I guess I will have to manually switch over to a 401K or pocket the money? I'm using retireonline.com through JPMorgan
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Jul 11, 2013 01:08
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Are you sure the company isn't contributing to a Roth 401k?
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Jul 11, 2013 01:14
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The Sock posted:This might be a dumb question, however, does the $5,500 limit only count from my own contributions? I am putting 12% away and I get a 100%, 6% match to my Roth IRA from my company. I am also eligible for a profit sharing bonus to my retirement, which range from 0-10%, so I'm going to go over the $5,500, but my own contributions will be at $5,500. You're confusing 401k and IRAs. A 401k is your employer retirement plan, and IRAs are individial retirement accounts. Employer contributions do not count against your 401k limit so you can contribute up to $17.5K on your own, and your employers contributions will just add to that.
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Jul 11, 2013 01:17
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evilalien posted:You're confusing 401k and IRAs. A 401k is your employer retirement plan, and IRAs are individial retirement accounts. Employer contributions do not count against your 401k limit so you can contribute up to $17.5K on your own, and your employers contributions will just add to that. Oops. I have a ROTH 401K then. It is drawing from my after-tax money. That is good to know, thank you for clarifying this.
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Jul 11, 2013 01:24
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enthe0s posted:I also just called Fidelity and found out that my 401k is split between pre-tax and Roth, which made it really confusing as I tried to figure out what that meant exactly. Because it's structured this way, I guess I actually have the option to contribute all of my 401k money as Roth, so they'll be taxed before they get put into my fund. It also sounds like this has all the benefits of a regular Roth IRA too, where any earnings I get will also be tax-free. This is a nifty matrix comparing the options: http://en.wikipedia.org/wiki/Comparison_of_401%28k%29_and_IRA_accounts.
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Jul 11, 2013 01:33
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QuarkJets posted:So the thread title is gently caress eTrade? What's the story behind that? They spam you with emails, have fees for basically everything, and don't have good expense ratios. Their support is also terrible too.
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Jul 11, 2013 01:33
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enthe0s posted:Oh right, I forget that I don't have to put it away right now, so this seems like a safer option. I am a fan of Roth all the way. What really matters in the end are post tax dollars as these are the ones you spend. A Roth (either IRA or 401k) lets you save more post tax dollars than a traditional account. There was a post around here somewhere with a model showing the impact of roth vs. non-roth. Its not a slam dunk but generally the roth wins out. The following things have the largest impact on the outcome of which is better: Current tax rate (i.e. current income and location): The higher your current tax rate is the better the traditional account is. Example if you are earning $200k+ in California you probably don't want to pay taxes up front where as if you're earning $50k in Texas you want to pay your minimal taxes today so you don't in the future. Future tax rate (i.e. income and retirement location): The higher your future tax rate the better the roth is for the opposite reason as above. Capital gains tax rate: In theory the tax benefit you get today should be reinvested in a taxable account to maintain an apples to apples comparison. The higher long term capital gains rate the better the Roth because the incremental benefit of a tax-free earnings is greater. 'Forced Savings': This isn't any mathematical benefits, but if you save into a Roth you are saving more money than with a traditional. Image two people have a million dollars each in the 401ks. They both withdraw it, the guy with the Roth gets just that, a million dollars. However the guy with the traditional pays income taxes on his withdrawl so he only ends up with $700,000. By contribution to a Roth you are effectively forcing yourself to save more.
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Jul 11, 2013 08:09
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So from what it sounds like, I need to have a good prediction of what my future income will be to make a good decision on whether or not to stick to the standard 401k or the Roth 401k. Which brings me to the realization that I don't actually know what is considered taxable income. Is there a list I can consult? Obviously whatever I actually work for and take home is taxable, but how do bonds and stocks play into this? That 401k/IRA matrix was really awesome btw, highly helpful 
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Jul 11, 2013 15:09
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enthe0s posted:So from what it sounds like, I need to have a good prediction of what my future income will be to make a good decision on whether or not to stick to the standard 401k or the Roth 401k. Which brings me to the realization that I don't actually know what is considered taxable income. Is there a list I can consult? Obviously whatever I actually work for and take home is taxable, but how do bonds and stocks play into this? Right, and the bottom line is that it's impossible to predict what your future income, federal tax rate, or any of those other variables will be, so you should diversify. All income is taxable income, minus of course anything that can be deducted pre-tax (like a standard 401k contribution). That dollar of interest you made last year on your savings account? It's taxable income. The $5 your neighbor paid you to mow his lawn? Taxable income. Sold something on eBay? Taxable income.
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Jul 11, 2013 15:45
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ntan1 posted:They spam you with emails, have fees for basically everything, and don't have good expense ratios. Their support is also terrible too. I don't get too many emails from them - couple a month, maybe. The two times I've called CS they've been great. BUT, they just hit me with a hugh fee and I'm a bit pissed about it. Dukket fucked around with this message at 16:28 on Jul 11, 2013 |
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Jul 11, 2013 16:13
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SlightlyMadman posted:Right, and the bottom line is that it's impossible to predict what your future income, federal tax rate, or any of those other variables will be, so you should diversify. Fair point. I think I will do something like a 65/35 split on traditional 401k/Roth 401k. With the Roth IRA I'll have later, that splits my savings up fairly evenly among before tax and post tax savings.
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Jul 11, 2013 17:38
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Don't know if people are interested in this but Schwab is launching a program where current clients can refer their friends and family. There is no bonus for the person referring but new customers can get $100 if they deposit $10,000 in cash or securities. Its not a true referral program since anyone can use it. There are no special codes to get from a friend. Just go to https://www.schwab.com/referral and use the code "REFER" when you open an account. Usually cash bonuses at brokerages require huge deposits but this one is pretty do-able for anyone who has maxed out Ira contributions for 2 years.
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Jul 11, 2013 18:00
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I just talked on the phone with a really cool and knowledgeable dude from Vanguard for a while. I'm a self-employed individual and, unless I'm really mistaking things, it seems like having a solo 401(k) and a Roth IRA is the best way to handle this - this will allow me to maximize employee/employer contribution, and then also contribute to the Roth (which is the bone-obvious move if you're already maxing out your tax-deferred contributions for the year - I think, I just got started on this). I am young, so I am interested in contributing the absolute maximum tax-deferred possible. I already have some money in a separate, non-IRA non-401(k) fund that I can cap out the IRA and 401(k) with if I have to (though I shouldn't have to unless I'm a loving moron who can't hold onto 40% of his earnings as a young healthy single guy with no car, no dependents, and very little rent). When did you guys feel "satisfied" that your plan was right? It seems like there's always more to read, but I feel pretty solid on this now. Thanks! No Wave fucked around with this message at 20:24 on Jul 11, 2013 |
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Jul 11, 2013 20:21
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No Wave posted:When did you guys feel "satisfied" that your plan was right? It seems like there's always more to read, but I feel pretty solid on this now. When I realized the basic plan of low-complexity allocation-based indexing, combined with maxing out your tax-protected vehicles, was what all the actually-rich people I talked to did (at least those who didn't simply inherit some sort of windfall too big to practically spend), and all the other stuff was almost uniformly done/promoted by people who either aspired or acted rich, but weren't. It's not particularly obvious when you start, since many, many of the actually-rich people often act very low key, whereas the aspiring are very talkative, but when you really dig deep, that's the reality. Unormal fucked around with this message at 20:47 on Jul 11, 2013 |
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Jul 11, 2013 20:43
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The part that's been weird for me - especially as a self-employed individual - is how low your tax rates can actually become. I mean, with self-employed 401k you can put away $17,500 PLUS 20% of your income, tax-free. I mean, as far as I can tell by maximizing all my 401k contributions I can get my federal tax burden down to 5.8%. I mean what the gently caress? I can't believe this is legal. This isn't even including the bonus I get from the Roth IRA down the line. Maybe I'm off on this - I'm just looking for a sanity check here.
No Wave fucked around with this message at 21:04 on Jul 11, 2013 |
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Jul 11, 2013 21:00
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| # ? May 28, 2024 00:34 |
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No Wave posted:The part that's been weird for me - especially as a self-employed individual - is how low your tax rates can actually become. I mean, with self-employed 401k you can put away $17,500 PLUS 20% of your income, tax-free. I mean, as far as I can tell by maximizing all my 401k contributions I can get my federal tax burden down to 5.8%. I mean what the gently caress? I can't believe this is legal. This isn't even including the bonus I get from the Roth IRA down the line. Maybe I'm off on this - I'm just looking for a sanity check here. You're deferring taxes, not avoiding them.
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Jul 11, 2013 21:10
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