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Old 02-10-2015, 02:43 AM
 
71,561 posts, read 71,730,589 times
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the reality is none of us really care if he is a good trader or a poor trader , that is his problem. if there is nothing to be learned from the thread it really doesn't matter does it.
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Old 02-10-2015, 02:54 AM
 
1,212 posts, read 1,862,725 times
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Maybe it is not too late for him
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Old 02-10-2015, 03:01 AM
 
71,561 posts, read 71,730,589 times
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not our job to save someone from themselves and their logic.

i state the facts and it is up to them to evaluate , think it through and change course but if they belive their own bull-sh*t to be true there is no convincing them.

many folks are their own worst financial enemy because they run on mis-information ,myth and what they think they know that aint so.
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Old 02-10-2015, 08:57 AM
 
189 posts, read 262,877 times
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Quote:
Originally Posted by mathjak107 View Post
not our job to save someone from themselves and their logic.

i state the facts and it is up to them to evaluate , think it through and change course but if they belive their own bull-sh*t to be true there is no convincing them.

many folks are their own worst financial enemy because they run on mis-information ,myth and what they think they know that aint so.
I always liked your POV and advise when you. Always logical and straight forward
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Old 02-10-2015, 12:48 PM
 
2,294 posts, read 1,561,151 times
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Quote:
Originally Posted by mathjak107 View Post
the reality is none of us really care if he is a good trader or a poor trader , that is his problem. if there is nothing to be learned from the thread it really doesn't matter does it.
You guys crack me up. First, I bet that I'm financially better off than almost all of you who are making the wisecracks. We can all puff out our chests, but I've read many of your posts and unless you have a whole lof of money in deferred comp and your personal account, plus a huge pension (which I will have shortly) , plus farmland, you aren't close to my net worth.

Second, only Brad, the professonal finance guy, understands why one might sell in the Roth instead of another account. Third, I WORK in the finance industry for a large company. I wasn't asking for your amateur financial advice. I was asking a specific question.

You've asked me to explain why and I pointed to Brad's answer as to why one might want to sell in a Roth instead of another account (even while still investing, trading in the Roth and even adding to it over a period of time).

So have fun criticizing. I can't help it you don't have a full grasp of the issues. You might want to study up a bit...I can't hold your hand.
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Old 02-10-2015, 01:05 PM
 
71,561 posts, read 71,730,589 times
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actually yes, I have been quite successful as an investor and do have a multi 7 figure portfolio.

not sure what your point is,.
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Old 02-10-2015, 01:32 PM
 
Location: Portal to the Pacific
5,151 posts, read 5,098,450 times
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Quote:
Originally Posted by Burkmere View Post
You guys crack me up. First, I bet that I'm financially better off than almost all of you who are making the wisecracks. We can all puff out our chests, but I've read many of your posts and unless you have a whole lof of money in deferred comp and your personal account, plus a huge pension (which I will have shortly) , plus farmland, you aren't close to my net worth.

Second, only Brad, the professonal finance guy, understands why one might sell in the Roth instead of another account. Third, I WORK in the finance industry for a large company. I wasn't asking for your amateur financial advice. I was asking a specific question.

You've asked me to explain why and I pointed to Brad's answer as to why one might want to sell in a Roth instead of another account (even while still investing, trading in the Roth and even adding to it over a period of time).

So have fun criticizing. I can't help it you don't have a full grasp of the issues. You might want to study up a bit...I can't hold your hand.
Ah, yes.. it's the classic "mine is better than yours!" statement all packaged up nicely and hand delivered in a wrapper of immodest arrogance.... how sweet...

And if that was not your intention, then can you adequately explain to us mortal plebeians of the financial world why you, who works in the finance industry for a large company, would come to City-Data of all places to ask your financial question?

Maybe you got confused.... you also seem to be confused about the following:

Nobody here is asking for your advice.
Nobody here is asking you to hold their hand.
Nobody here is asking you about your net worth.
Nobody here cares about your net worth.

If we didn't answer your question or clarify to your satisfaction then simply move on. No need for comparative judgements here... it's just City-Data....
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Old 02-10-2015, 01:36 PM
 
Location: New York
1,096 posts, read 963,059 times
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Old 02-10-2015, 02:28 PM
 
2,409 posts, read 2,640,099 times
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This is an interesting thread. Given the number of smart people in here and given the fact that the original question has already been answered to the satisfaction of the original poster, I am amazed that this thread is still continuing, and that the issue in discussion, while seemingly simple, causes such a disagreement.



To add to the discussion, I actually believe that the OP would be better off withdrawing from his taxable account.

To settle this, let’s use a hypothetical example. Say the OP has 100k in his Roth IRA and 100k in his taxable brokerage account; both accounts are identical except for the tax advantages. Let’s assume that half the value in each account, 50k, is in contributions, and the other 50k is profits. Let’s also assume that he has an expense of 10k, but later this year will have a 5k ready to invest. Let’s further assume that the profits withdrawn from the taxable account are subject to 40% tax.



So as of this moment, before any withdrawal, the real value of the Roth IRA is 100k, but the real value of the taxable account is 80k because withdrawing all the money from there will incur 40% tax on 50k profits, or 20k.


Getting 10k out of his Roth IRA, the OP will not owe any taxes because Roth IRA withdrawals are not subject to income tax or capital gains tax. So he will end up with 90k in his Roth IRA and 100k in his taxable account. Later on, he makes the 5k contribution into his Roth IRA and now has 95k in his Roth IRA and 100k in his taxable account. In nominal value, he has 195k. In real value, after 40% tax, that’s 195k-20k = 175k.


Getting 10k out of his taxable account, the OP will be liable for 2k in income taxes to be paid at the end of the year. Later on, he contributes 5k to his Roth IRA, so his Roth IRA has 105k in it and the taxable account has 90k in it, of which 45k is contribution and 45k is profits. And since he has to pay the taxes, the money he has is 105k+90k-2k = 193k. This is smaller than 195k in the other scenario. However, in real value, he has 193k-18k = 175k which is the same.


This omits one important consideration, however, and that’s the investment return on the money in the accounts. Let’s say the OP is a killer investor/trader and makes 100% return. And let’s assume that he withdraws money at the beginning of the year and contributes and pay taxes at the end of the year.


In the first scenario, he will end up with 180k in his Roth IRA and 200k in his taxable account. The profits in the Roth IRA are 180k-45k=135k, and the profits in the taxable account are 200k-50k=150k. The real value of these accounts is 180k+200k-60k=320k. Putting the 5k contribution in, he now has 325k.


In the second scenario, he will end up with 200k in his Roth IRA and 180k in his taxable account. The profits in the Roth IRA are 150k, and the profits in the taxable account are 135k. The real value of these accounts is 200k+180k-54k=326k. Taking 2k taxes out and putting the 5k contribution in, he has 329k.


In conclusion, if the OP is really good with making investment returns, he actually should withdraw from his taxable account. The difference can be explained by the fact that the money in the Roth IRA grows without taxes; therefore, the more money he withdraws from his Roth IRA, the less money he will have growing tax-free.


The reason the OP thought withdrawing from the Roth IRA might be better is because the nominal value of his money is larger: 180k in Roth IRA + 200k in taxable = 380k; while 200k in Roth IRA + 180k in taxable – 2k tax = 378k. He probably forgot that his larger taxable account is subject to more tax, and this more than offsets the 2k tax he’d have to pay to withdraw from the taxable account.

Last edited by AmFest; 02-10-2015 at 03:49 PM..
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Old 02-10-2015, 02:42 PM
 
2,719 posts, read 4,402,616 times
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It is so interesting to see that people are arguing on a point that the OP DID NOT ask at all. It seems some people are itching to answer a question that is not asked?
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