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Old 07-13-2014, 02:39 PM
Status: "Is that all there is?" (set 22 days ago)
 
Location: Southeastern Pennsylvania
996 posts, read 864,667 times
Reputation: 2298

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Quote:
Originally Posted by Jkgourmet View Post
Your first paragraph reflected my thoughts. I totally agree. (Though I do appreciate StealthRiders sentiments.)

However, you second paragraph is not entirely legitimate due to the limitations of the amounts that can be contributed to a Roth IRA. Here they are, since 1998 when Roth IRA's were first established:


Age 49 and Below Age 50 and Above 19982001 $2,000 $2,000 20022004 $3,000 $3,500 2005 $4,000 $4,500 20062007 $4,000 $5,000 20082012* $5,000 $6,000 20132014 $5,500 $6,500
Compare that to the maximum allowed 401k on this chart. Even noting that you can't contribute more than 25% of your salary, the amounts far exceed what you could contribute to a Roth.

I'd agree with the premise that the 'best' plan is to max out the employer match into the 401k, then max out your own contribution to a Roth, but then I would (and did) max out the 401k contribution including the catch up amounts.

Gosh, I completely forgot about Roth IRAs. We both have them, but we retired so soon after they became available, they're barely on my radar. I actually meant I wish we had just put more in our regular investment accounts and less in the 401(k). Our tax bill will soar in a couple years when RMDs kick in. For now, we're paying capital gains tax on what we cash out from "non-retirement" investment accounts (which, of course, were set up to provide retirement income before age 70.5). Yes, we'd have paid more in dividend taxes, but that has not been a significant factor compared to appreciation.
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Old 07-13-2014, 03:36 PM
 
2,980 posts, read 2,709,789 times
Reputation: 5631
Quote:
Originally Posted by Gandalara View Post
If you could change one tax law to benefit yourself in retirement, what would it be?
One, and one only.

Myself, I would like to be able to contribute to an IRA or RothIRA without earned (working) income.
I don't want to go work at a part-time job just to be able to put money away into a retirement account.
Anything that counts as Taxable Income should count.

I can dream, right?


I don't want to change a law to benefit myself only; I would like the change to benefit everyone. The most unfair tax by far is the property tax because you have pay it to stay in the property, regardless of your circumstances. At least with a high income tax if you don't make the money, you don't pay it. The federal government needs to pass a law that overrides all the states property tax laws and states that the amount of property tax (not the assessment) cannot increase more than one percent or a fraction of one percent per year. This would be for everyone of all ages, and if the property owner is over 62, the property tax cannot increase, period. The federal government squanders taxpayer's money in every way that they can to get people into homes of their own (keeping interest rates artificially low, insuring mortgages for people who should never have been given financing in the first place, providing grants to low income buyers, providing grants to teachers and policemen to purchase in certain economically depressed areas, providing grants to purchase in cities that are losing population, corporate welfare for homebuilders, even providing government grants to repair homes, etc., etc.) yet they do nothing to keep people in their homes, particularly the elderly. Keeping the elderly in the homes would allow them to "age in place" in familiar, friendly surroundings.

Let the thieving local politicians find other ways to get money for the greedy children and teachers.

Last edited by james777; 07-13-2014 at 04:10 PM..
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Old 07-13-2014, 04:11 PM
 
Location: SoCal desert
8,093 posts, read 13,244,051 times
Reputation: 14870
To the above who are zeroing in on the words "benefit yourself" ...
This is a Wish thread. A Fun thread. A Dream thread. Enjoy it please.

And to monkeywrenching who said "repeal the 16th Amendment" - Bravo.You did it one fell swoop
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Old 07-13-2014, 04:26 PM
 
Location: Texas
1,972 posts, read 1,377,839 times
Reputation: 6755
Quote:
Originally Posted by james777 View Post
I don't want to change a law to benefit myself only; I would like the change to benefit everyone. The most unfair tax by far is the property tax because you have pay it to stay in the property, regardless of your circumstances. At least with a high income tax if you don't make the money, you don't pay it. The federal government needs to pass a law that overrides all the states property tax laws and states that the amount of property tax (not the assessment) cannot increase more than one percent or a fraction of one percent per year. This would be for everyone of all ages, and if the property owner is over 62, the property tax cannot increase, period. The federal government squanders taxpayer's money in every way that they can to get people into homes of their own (keeping interest rates artificially low, insuring mortgages for people who should never have been given financing in the first place, providing grants to low income buyers, providing grants to teachers and policemen to purchase in certain economically depressed areas, providing grants to purchase in cities that are losing population, corporate welfare for homebuilders, even providing government grants to repair homes, etc., etc.) yet they do nothing to keep people in their homes, particularly the elderly. Keeping the elderly in the homes would allow them to "age in place" in familiar, friendly surroundings.

Let the thieving local politicians find other ways to get money for the greedy children and teachers.
You may want to move to California where taxes can only increase by 1%, because here in Texas property tax can increase up to 10% annually. This has happened to me for two consecutive years. However, at age 65 my tax was lowered to $5500 from around $7000.
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Old 07-13-2014, 04:35 PM
 
Location: Los Angeles area
14,018 posts, read 17,756,785 times
Reputation: 32309
Quote:
Originally Posted by james777 View Post
I don't want to change a law to benefit myself only; I would like the change to benefit everyone. The most unfair tax by far is the property tax because you have pay it to stay in the property, regardless of your circumstances. At least with a high income tax if you don't make the money, you don't pay it. The federal government needs to pass a law that overrides all the states property tax laws and states that the amount of property tax (not the assessment) cannot increase more than one percent or a fraction of one percent per year. This would be for everyone of all ages, and if the property owner is over 62, the property tax cannot increase, period. The federal government squanders taxpayer's money in every way that they can to get people into homes of their own (keeping interest rates artificially low, insuring mortgages for people who should never have been given financing in the first place, providing grants to low income buyers, providing grants to teachers and policemen to purchase in certain economically depressed areas, providing grants to purchase in cities that are losing population, corporate welfare for homebuilders, even providing government grants to repair homes, etc., etc.) yet they do nothing to keep people in their homes, particularly the elderly. Keeping the elderly in the homes would allow them to "age in place" in familiar, friendly surroundings.

Let the thieving local politicians find other ways to get money for the greedy children and teachers.
Yes, property taxes are out of control in some states. But here we go again with this entitled "over 62" business. What is it about being over 62 that should entitle us to all that special treatment? I am 70 and I don't think anyone owes me special treatment. If we look at national statistics the over 62 demographic is doing quite well as a whole. No wonder a lot of younger people in other forums, such as Economics, are irritated with our age group and its "give me, give me" mentality. I am on their side.
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Old 07-13-2014, 04:45 PM
 
Location: Whereever we have our RV parked
8,814 posts, read 7,722,693 times
Reputation: 15118
If I could chose one, it would be the federal govt. taxation on your Gross income. That is to say, first they tax you on the gross with FICA. So they have subtracted that money from your check. So now, you should only have to pay tax on what's left. NO. Instead, you still pay tax on the gross. Its not fair to anyone, high income or low income tax earners.
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Old 07-13-2014, 05:43 PM
 
Location: Forests of Maine
30,693 posts, read 49,488,800 times
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Quote:
Originally Posted by LookingatFL View Post
I think that the total amount of Social Security that was withheld from your income (and which you already paid income tax on) should not be counted as income or taxed. The income tax should begin when your benefit exceeds what was deducted from your wages or paid as self-employment tax over your working life-time.
That makes sense to me.



Quote:
Originally Posted by Escort Rider View Post
I wouldn't want to change a single tax law to "benefit myself". That is one of the big problems with out society; we have become selfish and self-entitled. Any change in tax law should be for the purpose of making the whole system better and benefitting society. And there is plenty of room for such changes, although it is a fiendishly complex subject, and not the subject of this thread anyway.
That would be much more ethical.



Quote:
Originally Posted by monkeywrenching View Post
1 tax law?

repeal the 16th Amendment.

if that would have already happened, I could have retired 5 years ago.
I have been in favor of that for a long time.

It would not have any effect on me though, I have not paid into Income Taxes since 1983.
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Old 07-14-2014, 01:00 PM
 
Location: Phoenix, AZ > Raleigh, NC
15,092 posts, read 19,047,678 times
Reputation: 24212
Quote:
Originally Posted by Pocopsonite View Post
Gosh, I completely forgot about Roth IRAs. We both have them, but we retired so soon after they became available, they're barely on my radar. I actually meant I wish we had just put more in our regular investment accounts and less in the 401(k). Our tax bill will soar in a couple years when RMDs kick in. For now, we're paying capital gains tax on what we cash out from "non-retirement" investment accounts (which, of course, were set up to provide retirement income before age 70.5). Yes, we'd have paid more in dividend taxes, but that has not been a significant factor compared to appreciation.
You can consider converting SOME of the assets in a Traditional or Rollover IRA to a Roth. It's not an all or nothing proposition. And remember, if you do the conversion, that amount has to be included in as income that year. So you're going to pay taxes on it now instead of later.

If you have children and/or grandchildren, please get some estate planning done before you do any conversions. If you make someone a designated beneficiary of a Traditional IRA, they can reset the RMD clock and take out the RMD over THEIR lifetime - not yours. It's a wonderful way to leave your money to younger beneficiaries. If you have significant assets in those IRA's, that may outweigh the possible benefit of reducing the taxes if you convert the Traditional IRA to a Roth IRA.

Also consider this: Doing the conversion is a gamble. If you croak a year or three after the conversion, you lost money on that deal. If you leave them alone and live another twenty years, then, yes, maybe you would have saved some money with the conversion. Most "experts" would say that if you are under 50, conversion is a good gamble. Under 60, maybe. Over 60, don't do it. That's a generalization, but one that is used frequently and is a reference point.
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Old 07-14-2014, 02:12 PM
Status: "Is that all there is?" (set 22 days ago)
 
Location: Southeastern Pennsylvania
996 posts, read 864,667 times
Reputation: 2298
Quote:
Originally Posted by Jkgourmet View Post
You can consider converting SOME of the assets in a Traditional or Rollover IRA to a Roth. It's not an all or nothing proposition. And remember, if you do the conversion, that amount has to be included in as income that year. So you're going to pay taxes on it now instead of later.

If you have children and/or grandchildren, please get some estate planning done before you do any conversions. If you make someone a designated beneficiary of a Traditional IRA, they can reset the RMD clock and take out the RMD over THEIR lifetime - not yours. It's a wonderful way to leave your money to younger beneficiaries. If you have significant assets in those IRA's, that may outweigh the possible benefit of reducing the taxes if you convert the Traditional IRA to a Roth IRA.

Also consider this: Doing the conversion is a gamble. If you croak a year or three after the conversion, you lost money on that deal. If you leave them alone and live another twenty years, then, yes, maybe you would have saved some money with the conversion. Most "experts" would say that if you are under 50, conversion is a good gamble. Under 60, maybe. Over 60, don't do it. That's a generalization, but one that is used frequently and is a reference point.

We're 68. Looked into the conversion awhile back (with the help of our accountant) and decided against it. Mostly because of the taxes. But partly because we're not convinced Roth IRAs will always be tax-free at withdrawal time. Social Security payments weren't taxable when they first started . . .

No kids, no GKs, just some charities that will remember us fondly and some younger sibs and their kids who will be amazed. (We live well below our means.)
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Old 07-14-2014, 03:10 PM
 
Location: Florida -
8,767 posts, read 10,859,665 times
Reputation: 16640
Quote:
Originally Posted by CSRSJim View Post
I wanted this changed for decades, and still do.

Treat all tax payers the same.
If you earn the income, you pay the tax.
It shouldn't matter if you have 10 children or no children.
It shouldn't matter if you have a spouse or not (no matter what gender the spouse is).
Just treat all people the same.
Yes indeedy! -- But, then we are talking about votes, not taxes; which somewhat precludes this.
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