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You're a trust fund baby-to-be. So, except for paying off the IRS and the school loan what's to worry? Shouldn't be too difficult. Your retirement starts the day after the wake, after which all will be fine.
I haven't seen you say what interest rate you're paying on your loans or on your IRS debt. That one should be easy to find online, it's probably a standard rate. I suspect that your debts other than the IRS and student loans are the highest so they should be paid off first. Then you need to get started with the IRS once you see if you can negotiate this down.
Do not give up putting the maximum matchable amount into the 401k - as others have said that's free money. Then you need to determine if you can make more money with an IRA (Roth or regular) than you could paying down the debts; why save money at four percent if you can reduce debt you'd be paying 8 percent on? If it gets to the point where you need to decide which IRA is better for you remember that when you're 70 1/2 you'll need to take annual minimum distributions from the total of your 401k's and IRA's. You'll pay tax on the money coming out of the 401k and regular IRA but the Roth will be tax free so you can choose which to use first depending on your tax situation at that time. Generally the Roth would be the last to be drained because it would continue to grow tax free.
hahahahaha, yes a lein for 30k and low credit score... But not for long, i will be debt free in three years if I go aggressively. I spoke to a professional a few hours ago and we ran all the numbers. paying off all my debt can be done in three years or 4 years (not including my bonuses) . I will certainly be laughing with you when i have no DEBT at all. Laugh now, its a motivator. lol
Thanks for the advice and the kick in the ass I earned it. hehehe
Total debt is 120k Thats all and I bring in $4500 a month (not including bonuses) no car note or gas company pays for it. Also my rent is $600....
Also have a house that will be left to me from the family (which is why I am motivated to get this lein taken care of, house is it not in my name) Plus a lot of land in VA that will also be left to me. Pulling trigger very soon as soon as taxes post setting up payment plan.
So you think you owe $65K IRS but you already have a 30K lien with them? And you just filed 2015 and haven't filed 2016 yet.
It could be worse than 65K. It's highly likely.
IF you have a lien, you're already in Phase 2 of collections. That means you have human beings working your case and not just the computer generated stuff. Phase 3 is when the knife drops and a Collections Agent actually does a levy and garnishment. They freeze your bank and take it all - they send you forms to fill out so you can get the bare minimum of future paychecks to live on. They come in your house and do an inventory and decide what they want to auction off (lol).
The good news is that the threshold for that serious collections is $50K but now you've passed that number so.....
Unfortunately all of the "positives" - safety nets - you list are built on thin air. There's no guarantee you'll get that inheritance or that it'll be the safety net you think it'll be. If you're on good terms with your parents (or whoever) why not ask for a loan against that inheritance?
You have no net worth and are one eviction away from the park bench. Ditto potentially losing your job which also means you have NO CAR if that happens.
I would not be running amuck writing random checks to the IRS.
I'd be writing MYSELF checks to at least have 3 months living expenses cash (REAL ONES) and writing a check to a tax defense company to get the IRS to cease all collections actions until they can get you straightened out. But that's no guarantee that the IRS isn't in the middle of a bank levy or pay garnishment RIGHT NOW.
You can go on the IRS website, register, and see their "worksheets" for every year on you. What they actually are using to collect on you. But you're not going to be able to manage this by yourself, it's obvious. Because that's only the beginning of the story and you're kind of disorganized.
That's assuming you don't live in a state with state income tax too, because THEY will garnish you much quicker.
The tax defense companies don't do all that much differently than any taxpayer could do but their knowledge far exceeds most taxpayers and they have teams of people doing the actual work.
Sure, you can fill out the form requesting payment arrangements. But that doesn't solve your problem since you just filed 2015 and 2016 isn't even done yet but you already have a LIEN for prior years! My guess would be probably 2008 - 2011 time period. (since you won't give the information).
So obviously you need someone who knows what they're doing to review the past TEN YEARS. Which is the statute of limitations on what the IRS can collect.
The reason I know ALL ABOUT THIS is from a neighbor who got himself in a similar mess but worse. A retired teacher from NYC on a pension LOL. Owed >50K IRS AND got underwater in THREE PROPERTIES during the real estate crash he was trying to be a hot shot speculator in. He paid me to work with his tax company because he couldn't even get his own paperwork together that he needed to defend himself. He used Optima and they did a great job.
So you think you owe $65K IRS but you already have a 30K lien with them? And you just filed 2015 and haven't filed 2016 yet.
It could be worse than 65K. It's highly likely.
IF you have a lien, you're already in Phase 2 of collections. That means you have human beings working your case and not just the computer generated stuff. Phase 3 is when the knife drops and a Collections Agent actually does a levy and garnishment. They freeze your bank and take it all - they send you forms to fill out so you can get the bare minimum of future paychecks to live on. They come in your house and do an inventory and decide what they want to auction off (lol).
The good news is that the threshold for that serious collections is $50K but now you've passed that number so.....
Unfortunately all of the "positives" - safety nets - you list are built on thin air. There's no guarantee you'll get that inheritance or that it'll be the safety net you think it'll be. If you're on good terms with your parents (or whoever) why not ask for a loan against that inheritance?
You have no net worth and are one eviction away from the park bench. Ditto potentially losing your job which also means you have NO CAR if that happens.
I would not be running amuck writing random checks to the IRS.
I'd be writing MYSELF checks to at least have 3 months living expenses cash (REAL ONES) and writing a check to a tax defense company to get the IRS to cease all collections actions until they can get you straightened out. But that's no guarantee that the IRS isn't in the middle of a bank levy or pay garnishment RIGHT NOW.
You can go on the IRS website, register, and see their "worksheets" for every year on you. What they actually are using to collect on you. But you're not going to be able to manage this by yourself, it's obvious. Because that's only the beginning of the story and you're kind of disorganized.
That's assuming you don't live in a state with state income tax too, because THEY will garnish you much quicker.
The tax defense companies don't do all that much differently than any taxpayer could do but their knowledge far exceeds most taxpayers and they have teams of people doing the actual work.
Sure, you can fill out the form requesting payment arrangements. But that doesn't solve your problem since you just filed 2015 and 2016 isn't even done yet but you already have a LIEN for prior years! My guess would be probably 2008 - 2011 time period. (since you won't give the information).
So obviously you need someone who knows what they're doing to review the past TEN YEARS. Which is the statute of limitations on what the IRS can collect.
The reason I know ALL ABOUT THIS is from a neighbor who got himself in a similar mess but worse. A retired teacher from NYC on a pension LOL. Owed >50K IRS AND got underwater in THREE PROPERTIES during the real estate crash he was trying to be a hot shot speculator in. He paid me to work with his tax company because he couldn't even get his own paperwork together that he needed to defend himself. He used Optima and they did a great job.
#FakeNews
wash dishes more.
“To my mind, the idea that doing dishes is unpleasant can occur only when you aren’t doing them. Once you are standing in front of the sink with your sleeves rolled up and your hands in the warm water, it is really quite pleasant. I enjoy taking my time with each dish, being fully aware of the dish, the water, and each movement of my hands. I know that if I hurry in order to eat dessert sooner, the time of washing dishes will be unpleasant and not worth living. That would be a pity,for each minute, each second of life is a miracle. The dishes themselves and that fact that I am here washing them are miracles!”
–Thich Nhat Hanh
Last edited by Treasurebeachguy; 05-13-2017 at 06:16 AM..
Reason: Mistakes
You're a trust fund baby-to-be. So, except for paying off the IRS and the school loan what's to worry? Shouldn't be too difficult. Your retirement starts the day after the wake, after which all will be fine.
Fake news
Wash your dishes Slowly today.
“To my mind, the idea that doing dishes is unpleasant can occur only when you aren’t doing them. Once you are standing in front of the sink with your sleeves rolled up and your hands in the warm water, it is really quite pleasant. I enjoy taking my time with each dish, being fully aware of the dish, the water, and each movement of my hands. I know that if I hurry in order to eat dessert sooner, the time of washing dishes will be unpleasant and not worth living. That would be a pity,for each minute, each second of life is a miracle. The dishes themselves and that fact that I am here washing them are miracles!”
–Thich Nhat Hanh
Last edited by Treasurebeachguy; 05-13-2017 at 06:16 AM..
Reason: error
Thanks. Just having trouble trying to figure out how much i want to set aside for an emergency then throw the rest into 401k after IRS/Student land debt.
Retirement Catch-Up: How To Start In Your 50s
OK, you’re in your 50s and still have a job–maybe even a decent one–but the amount of savings you’ve put away for retirement is squat. Zippo. Nada. Is there any way you can avoid an impoverished old age or working until you drop?
The answer, fortunately, is yes. Even those getting a tardy start in thinking about retirement can take advantage of tax breaks and other moves to make up significant ground. This may require substantial changes in one’s lifestyle now, but they’re almost certain to be less painful than what might be required in 10 or 20 years if you don’t start now.
“It’s not too late unless you think it is,” says Andrew Hudick, a financial planner in Roanoke, Va., who regularly sees clients needing to play retirement catch-up.
In Pictures: Retirement Planning For Late-Starters
The most important first step to take is to start saving. Now. Even if you haven’t yet worked out any kind of a plan; that can come later. But you’re still going to need the money.
We’re not talking about the kind of piddling savings that comes from giving up your twice-a-week Starbucks Venti Latte. Instead, you need to start saving a good 10% of gross income or even more. There essentially are two ways to save. One is to pay down high-interest-rate debt that isn’t already tax-deductible–especially credit cards. If you’re paying 20% on credit card debt, in effect you get an immediate 20% return for every dollar you pay off.
The other way, of course, is to put funds away. This is where the tax code comes in. Take full advantage of your company’s 401(k) plan in which contributions are excluded from your current year’s income. It’s nice but not crucial if the employer matches part of the contributions. In a 25% bracket, a $10,000 contribution by you reduces your taxes by $2,500. Federal law allows workers who will be 50 by the end of the year to salt away up to $22,000 of their own contributions, pre-tax, for 2010. Investments in such retirement funds grow tax-deferred until they are withdrawn, at which time they are taxed at ordinary rates. While tax rates may go up overall, your own rate is likely to be lower in retirement, particularly given the late start you’re getting on savings.
If your employer doesn’t have a 401(k), open an individual retirement account at a mutual fund company or brokerage. Those who don’t have any employer pension plan can put away up to $6,000 pre-tax a year. If you do have a current employer pension plan, no matter how crummy, then you can only deduct the full contribution if your modified adjusted gross income is $89,000 or less for a couple, or $55,000 or less for a single. But you can make a $6,000 per person nondeductible contribution to a Roth IRA with modified adjusted gross income of up to $166,000 per couple and up to $105,000 for a single. (A Roth grows tax free, and all withdrawals in retirement are tax free.)
You can also fund tax-advantaged retirement savings with income from a second job or side business–a good thing to build up now, since you’ll want to continue earning something in retirement. Say you’re making $5,000 a year selling hand-made jewelry on eBay. You may be able to put it all away pretax in a Simple IRA or other special savings plan for the self-employer. For details, click here.
How should you invest your retirement funds? Most 401(k) plans have a number of mutual-fund options, and money in an IRA can be invested almost anywhere. Due to the continued volatility of stock markets, Hudick recommends for starters low-cost bond funds, in which the chance of a loss of principal is minimal. The last thing you want is to see the disappearance of 20% of your portfolio in the next stock market bust. As your nest egg grows larger, you’ll want to look more closely at what percent you want to invest in equities–preferably low-cost index mutual funds.
Perhaps the biggest problem in starting a retirement plan later in life is the loss of a prior significant period of time over which earlier investments could have compounded and grown. At a 5% rate, an investment doubles in 15 years; at 4%, in 18 years. But even if you’re in your 50s, you can still take advantage of the magic of compounded returns. That’s because–actuarially, anyway–your retirement is likely to run upwards of 20 years. That’s a long-enough period for investments you put away today to bear fruit.
As you get the savings going, you should figure out where you stand financially and what you’ll need. Even if you aren’t the sort to track every nickel spent on Intuit’s Quicken, it’s not hard to draw up a family net worth statement listing all assets and liabilities, and an income statement showing income and expenses over the last year. Data on your latest tax return can help.
There are all kinds of rules of thumb about what level of your current net income you’ll need to sustain yourself in retirement, generally ranging from 60% to 80% to even more. But if you’re new to retirement savings, don’t be paralyzed because you won’t reach those goals. Simply do the best you can and keep in mind that you’re not starting from zero.
For example, even if your current employer doesn’t offer a traditional defined benefit pension plan–one that pays a set amount each month–you may well have earned a monthly stipend from a previous job. This is a good time to paw through your old files and find records of any pensions from ex-employers you may be entitled to.
Even more significant is Social Security, which replaces 42% of the salary of a median wage earner who retires at the “full” or “normal” retirement age–66 for those who were born between 1943 and 1954. Replacement rates are higher than that for low-wage workers and lower for high earners. Plus, the replacement rate is higher for one earner couples, when spousal benefits are factored in.
Every dollar that comes from Social Security is one less dollar you otherwise have to provide for. You can get online an official estimate of your benefits from Social Security. Given the federal deficit, younger folks might rightly worry they won’t get what they’re promised from Social Security. But those 55 and over are unlikely to be nicked too much by any Social Security changes, unless they have a fairly high income.
You can start drawing early retirement benefits from Social Security at age 62, but it pays to wait, especially if you continue working past that age, and is crucial if you’ve begun saving late. Delaying the start of Social Security benefits until age 70 can boost the monthly payout by as much as 80%. For more on how to get the biggest Social Security payout, click here.
Here comes the tough-love part. If you seem to have no money left over at the end of the month to put away one way or the other and you don’t want to get a second job or work longer, you’re going to have to reduce your style of living. It’s as simple as that. Sure, there’s a lot of nickel-and-dime stuff many people can do–eat out less, buy used cars and so on. But you’ll have to tackle the big stuff. Consider downsizing to a smaller, cheaper and less-expensive-to-operate house or even renting an apartment. (The first $500,000 of any gains on a principal residence sold by a couple is tax free, meaning more to invest now.) Even more dramatically, ponder relocating in retirement to an area with a significantly lower cost of living. Tell the grown children still living at home they’re going to have to start fending for themselves.
It doesn’t take a lot to start building that nest egg. In a tax-deferred account and figuring a 4% annual return (compounded monthly), putting away just $500 a month would produce $74,000 in 10 years. That may not seem like much. But at current rates, for a couple that would be 68 years old then, that sum would buy an immediate annuity paying out $433 a month until both spouses are dead.
Folks like you with that yuppie high income...are up-bidding the price of boomchickawowow...far beyond the price range of the rest of us poor working-class schmucks.
Makes dating in the U.S.A. a sucky experience.
And stop throwing your money at 10s.
Find you an upgradeable 6-7 who got their career going for themselves and can put money in the pot.
Folks like you with that yuppie high income...are up-bidding the price of boomchickawowow...far beyond the price range of the rest of us poor working-class schmucks.
Makes dating in the U.S.A. a sucky experience.
And stop throwing your money at 10s.
Find you an upgradeable 6-7 who got their career going for themselves and can put money in the pot.
Smart comment indeed.
anyone can develop an alter ego online and be whoever they want to BE.
The days of cheap dates are over, online men and women are now sales professional looking for what they can get.
Some go on match.com just to get free meals..
Yuppie, nope not me at all.
I am a fake hippe....
The past creates shame and guilt, and the future anxiety.
Drinking can help one self medicate and not face reality..
I am facing reality and will be debt free in my old age with SS income and a dribble of 401k income...
Plus I will just transition into inside medical sales, as I get older. I like working, I lived my retirement already.
I'm bored of seeking pleasure..
My job is basically to be someones friend.
I got news for you, it can be worse outside of the USA. THEY ALL WANT MONEY. LOL
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