Are you in the 9.9%?

[old goat]

BUILD THE WALL!!!

In the ocean?

[El Chupacabra]

When I was younger I thought I needed millions and when I had it I was fucking miserable riding the stock mkt. if I had taken my bosses advice and just bought Munis I’d have never worked again after 30, staying single would have helped too.So for various reasons I am now very risk adverse.

I never want to stare at a large brokerage acct and worry about that shit in my 60’s.

Sounds like there's a pretty good story in there... What happened?

If you can’t retire on fixed income then you still need to work.

Are you buying individual municipal bonds? Trying to understand this strategy, which is very very different from my own.

[El Chupacabra]

Anyone doing this mega backdoor roth? Never heard of it before but investigating it now.

Read up on the five year rules for Roth conversions too, which is a big part of that strategy.

We didn't do this because of tax issues and a pre-existing rollover IRA. We are probably going to do a series of annual Roth conversions up to the limit of the lowest tax bracket (12%), whenever possible.

[4matic]

I’ve seen it mentioned a few times, so I’d just like to point out that if you have a 401k, you’re not maxing out your tax advantaged accounts unless you’re putting away 55k a year into it. You would think its 18500 (+ matching), but look up the mega backdoor roth.

There is no mega back door Roth. The only way you get to the $55k limit is higher company match.you can’t do both afaik

Everyone with some money to gift should learn the lifetime exemption of $5 million. The $10k a year is in addition to that. It’s a great tool to convert real estate to tax exempt.

[Meadow Skipper]

This whole thread reminds me of the parable of the Mexican fisherman.

Sí, yo también.

[St. Jerry]

There is no mega back door Roth. The only way you get to the $55k limit is higher company match.you can’t do both afaik

Everyone with some money to gift should learn the lifetime exemption of $5 million. The $10k a year is in addition to that. It’s a great tool to convert real estate to tax exempt.

Also gifting to 529 plans. Boarding school + Ivy League don't come cheap.

[El Chupacabra]

There is no mega back door Roth. The only way you get to the $55k limit is higher company match.you can’t do both afaik

Everyone with some money to gift should learn the lifetime exemption of $5 million. The $10k a year is in addition to that. It’s a great tool to convert real estate to tax exempt.

https://www.madfientist.com/after-tax-contributions/

You can't funnel $55K into a Roth through your 401k. You can roll a large amount into a Roth every year by first converting to a tIRA. There are tax implications.

2017 tax free gift is $14K, increases to $15K for 2018.

[4matic]

Right, but you can't shelter more new money than the limit. If you have a long time frame Roth is better for sure. If time frame is 10 years or less I really don't see a big advantage.

[klauss]

When I was a single owner LLC the limit on my Roth contributions was around $52k set up through TD Ameritrade. There were/are some limitations company earnings that can apply to get to the limit so the LLC has to be doing quite well to get there. You aren't going to get that deal as a W2 employee though.

found a link
https://www.irs.gov/retirement-plans...ant-401k-plans

[Art Shirk]

I’d say 25k a month in secure income makes you financially independent and rich anywhere. You can live in a $750 a night hotel yr round, breakfast included.


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Kids man. You forgot those bloodsuckers. That and ass cancer. 300k with two kids in a high cost city where the public schools blow plus student loan debt and you are still always one diagnosis from banko. Independence to me doesnt mean the freedom to do what I want, it means the freedom to not have other things do what they want to me, and that takes some real decent peso flow.

[4matic]

IRA tax deferral is affected by your 401k contribution. There is a combined limit to tax deferred contributions

[GoldMember]

I would suggest to everyone that net worth does not matter as much as what will your income be after retirement. Ours will be about 75% of our present incomes, maybe more, so not bad. People that go from 6 figures to cat food, didn't plan very well.

Your net worth, excluding your primary residence, probably has a lot to do with your income after retirement. That's why net worth can be important.

[CountryFunk]

Question, oh Wolves of Wallstreet - How is a govt. pension evaluated in a net worth calculation? Say it's from a fiscally sound (currently, I know, I know) State pension fund and has a annual cost-of-living increase of 3% that has withstood a legislative attack via a State supreme court ruling.

Net present worth for a uniform series of payments using the initial annual benefit and assuming a net interest rate of (3% minus an assumption for inflation), and an assumed number of years that the benefit will be drawn?

Not a hard number I know - it assumes the pension fund will remain viable and meet it's current contractual obligations and an assumption about inflation, but let's just say that, my friend and his wife, are in that boat and think it's a decent bet the fund will remain viable, and my friend, really wants to pull the plug while his body still, mostly, works ...

[GoldMember]

^^ Well, it doesn't count toward net worth but it certainly counts toward retirement income, much like SS does.

[Mazderati]

@country: Sounds like you're asking about present value in a time value of money equation.

http://www.fncalculator.com/financia...=tvmCalculator

[Sirshredalot]

There is no mega back door Roth. The only way you get to the $55k limit is higher company match.you can’t do both afaik

Everyone with some money to gift should learn the lifetime exemption of $5 million. The $10k a year is in addition to that. It’s a great tool to convert real estate to tax exempt.

The lifetime exemption is more than $5 million and is continuing to go up. It's also portable without using a credit shelter trust.

Realistically, you shouldn't pay a nickel of estate and gift tax under current law unless your real-world wealth exceeds $20 million.

[El Chupacabra]

I would look at pensions or Soc Sec as income that does not need to come from other savings or investments, so I would calculate "your friend's" retirement-readiness based on:

- annual budget needed to live on (note: not a "% of current income" number, but an actual spend number)
- source(s) from which you will meet that annual budget

[GoldMember]

I would look at pensions or Soc Sec as income that does not need to come from other savings or investments, so I would calculate "your friend's" retirement-readiness based on:

- annual budget needed to live on (note: not a "% of current income" number, but an actual spend number)
- source(s) from which you will meet that annual budget

Nicely said. It's not that complicated but inflation impacts need to be accounted for, too, even though inflation has been nearly non-existent the past several years. That likely won't always be the case and there should be a buffer that allows for it.

[CountryFunk]

Yeah, plug will be pulled sooner than later, I am a fisherman.

[CountryFunk]

Nicely said. It's not that complicated but inflation impacts need to be accounted for, too, even though inflation has been nearly non-existent the past several years. That likely won't always be the case and there should be a buffer that allows for it.

Buffering with maxed every year Roth IRA's, 457(b)'s, a rental house, and primary house paid-off in 5 years. Fucking healthcare ...

[MTT]

I would look at pensions or Soc Sec as income that does not need to come from other savings or investments, so I would calculate "your friend's" retirement-readiness based on:

- annual budget needed to live on (note: not a "% of current income" number, but an actual spend number)
- source(s) from which you will meet that annual budget

My planner shows me "On track" but my expectations are very low.
And yes I will depend on getting max SSN, taking it @ 70.

[GoldMember]

My planner shows me "On track" but my expectations are very low.
And yes I will depend on getting max SSN, taking it @ 70.

It was always my expectation that SS would be gone by the time I was able to draw from it so never planned for it in my retirement. Now it's looking like I may still get some of it so, that's just a bonus.

[Ted Striker]

max SSN

999-99-9999

[4matic]

My planner shows me "On track" but my expectations are very low.
And yes I will depend on getting max SSN, taking it @ 70.

Single with no dependents doesn’t pay that much to wait unless you continue to work.

[4matic]

Question, oh Wolves of Wallstreet - How is a govt. pension evaluated
...

Social Security too? While not net worth I value them like annuities for simplicity.