Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,079 posts, read 7,551,109 times
Reputation: 9819
Advertisements
Quote:
Originally Posted by Suburban_Guy
Whatever it takes for these financial 'gurus' to get publicity.
Sure, some of the things he says about 401K's may be true, but that depends on how diligent people are to avoid these things. And his false security of employee match concept makes absolutely no sense. I have no idea what he's talking about when he mentions that if you didn't have a 401K, your employer would still be expected to pay you the equivalent of the match.
Bottom line, despite its detractors, the 401K plan has been a godsend to so many employees like myself. It's designed to automatically help people invest by taking money out of your paycheck. That money taken out is something you don't spend, and it compounds in the account. Out of sight, out of mind, so simple.
I read some efficient frontier articles when I was first learning about investing. At the time the portfolios on the frontier had large allocations to international stocks, which turned out to be not such a good move. Unfortunately, even graduate-level math cannot predict the future. For writing papers, yes that math comes in handy. For investing I tend to side with Peter Lynch...
Quote:
Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.
the problem is most americans can not afford to delay and retire earlier .
even fewer with such low incomes and little taxable income would have tax planned with a mix of roths , over funded life policies and had enough cash to lay out to live on in advance for years as well as use the zero capital gains bracket for income .
Likely not much space then to fill up Ira money with the standard deduction
So same applies If pensions are that low and they are living on that low amount then they are not likely to be the ones to tax plan around larger income and large IRAs
It takes the resources behind you. , which usually involves a lot of planning to have near no taxable income
Even my wife’s small 22k pension would eat that up by itself
Last edited by mathjak107; 12-06-2023 at 11:49 AM..
OR -- stay with me here -- your plan administrator provides superior funds with expenses below those available at retail, outstanding administrative performance, and whose administration fees are de minimis.
You'll be surprised how many people put their 401k in a money market fund. While it is tax deferred it isn't doing anything more than inflation.
the lost decade had bonds beating stocks for many years
so specific time frames are what counts . most specifically, yours.
you also would be hard pressed to find time frames the last two decades a balanced portfolio of 50/50 stocks and bonds beat equities gold .
almost all time frames equities and gold won
Robert doesn't own stocks, he's a real estate and gold person. He's also a debt person so most of his analysis and preferences are against owning tax structured plans like 401k when using debt to buy income generating assets are much more tax advantageous.
Most people who are forced to withdraw down their 401k at some point will pay a tax exiting their position. The 10% early penalty is nothing, it's the tax bracket penalty that hurts the most. So it pays to move to less taxed state during those withdrawl years.
Likely not much space then to fill up Ira money with the standard deduction
So same applies If pensions are that low and they are living on that low amount then they are not likely to be the ones to tax plan around larger income and large IRAs
It takes the resources behind you. , which usually involves a lot of planning to have near no taxable income
Even my wife’s small 22k pension would eat that up by itself
Every kind of investment is a bet on a particular future scenario.
The 401k and conventional IRA is a bet that when you retire, your income will be so much lower that paying taxes on principal and earnings at your future marginal rate will be cheaper than it would be to pay those taxes at your present marginal rate.
The Roth IRA is a bet that in the future your marginal tax rate will be high enough that you'll have done better to pay tax on the principal and never pay tax on the earnings.
The stock market is a bet that the prices of stocks will go up enough that when you sell them and pay capital gains tax, you'll be ahead of where you'd be had you invested that money in something else.
And so on.
The smart thing to do, in my opinion, is to hedge your bets, i.e., bet some of your money on each of the scenarios. I believe any intelligent person with some money to invest should have some in tax-deferred retirement accounts, some in Roths, some in the stock market (principal is after-tax money, earnings are taxed at your marginal rate when realized), some in regular fixed income (principal is after-tax, and earnings are taxed as you go), some in tax-free munis (principal is after-tax, earnings aren't federally taxes, but the interest rate is lower), some in physical precious metals, some in real estate, and so on.
Obviously if you've got an employer that provides a 401k match, it'd be exceptionally silly not to max out that employer match. If Kiyosaki is correctly quoted that an employer is somehow obligated to pay the match even if you don't contribute to the 401k, he's got a fundamental misunderstanding of 401ks. If he's trying to say "in a world without 401ks, employers would end up paying that amount in wages", well, you could make that theoretical argument, but we don't live in that world, so it's silly to even say that.
If they have a pension great but most can’t afford to delay and retire early
No, but, if you can do it delaying can be used as a tax strategy.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
