Opti
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Post by Opti on Jun 11, 2021 12:53:07 GMT -5
I'd be putting some money into taxable accounts right now. You may want or have to retire early and having taxable account access can really help with financial planning. agree with buystoys. either that or allocate ALL future funds to taxable accounts, and let the retirement funds ride.
you could choose a spot where your needed funds going forward equaled your current funds. and then give notice at work.
Have you picked you retirement ex-pat country yet?
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CCL
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Post by CCL on Jun 11, 2021 16:33:36 GMT -5
If y'all want more eye-popping numbers, don't go back four years. Go back to March 23 of last year. I retired early a few years ago so have actually been taking money out of my IRA instead of adding contributions to various accounts. Even with that, I am up almost double in less than fifteen months. Sure, I lost a third in the five weeks previous, but if we are going to cherry-pick dates, do it right! We're more than double in a couple accounts. Of course, they were down ytd prior to that.
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phil5185
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Post by phil5185 on Jun 11, 2021 20:32:02 GMT -5
If y'all want more eye-popping numbers, don't go back four years. Go back to March 23 of last year. I retired early a few years ago so have actually been taking money out of my IRA instead of adding contributions to various accounts. Even with that, I am up almost double in less than fifteen months. Sure, I lost a third in the five weeks previous, but if we are going to cherry-pick dates, do it right! We're more than double in a couple accounts. Of course, they were down ytd prior to that. Look at the SP500 Index - 1981 to 2000, 17.9%/year. Sometimes times referred to as "18 years at 18%/yr". If you had $100k in your 401k in 1981, it grew to about $2 million, plus any new money.
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steph08
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Post by steph08 on Jun 12, 2021 21:47:15 GMT -5
This inspired me to check my accounts.
In October of 2016, I moved to a new job. My old 403b was at $82k and my new 401k was at $0.
Today, my 403b (which I moved to an IRA and has had no contributions) is worth $144,500, and my 401k is at $56,500. Finally surpassed the $200k mark! So almost 2.5 times what it was 4.5 years ago!
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Mrs. Dinero
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Post by Mrs. Dinero on Jun 16, 2021 9:22:24 GMT -5
I guess it’s time to level up:
Twitter find: @ohhaiandy
“Level 1: Spend all your $$$
Level 2: Save in a bank acct
Level 3: Get your 401K match
Level 4: Max out your Roth IRA
Level 5: Invest even more into a brokerage acct.
Level 6: Keep acquiring assets (BTC, Real Estate, etc)
Getting rich is just a game. Know the rules and win.“
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Post by minnesotapaintlady on Jun 16, 2021 11:57:45 GMT -5
I guess it’s time to level up: Twitter find: @ohhaiandy “Level 1: Spend all your $$$ Level 2: Save in a bank acct Level 3: Get your 401K match Level 4: Max out your Roth IRA Level 5: Invest even more into a brokerage acct. Level 6: Keep acquiring assets (BTC, Real Estate, etc) Getting rich is just a game. Know the rules and win.“ I would max out other tax preferred (401K/HSA) before moving on to taxable.
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Ryan
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Post by Ryan on Jun 16, 2021 12:56:32 GMT -5
I just noticed the other day that the balance on a Rollover IRA fund looked really high. Since I only used these accounts for dumping money from old 401ks, it seemed too high to be true. I looked back at the transactions and I had put $37K in during 2009 and then $62K in 2012. The account has grown to $335K now! Literally have not put any funds in close to 10 years, the dividends alone are over $5500/year.
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steph08
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Post by steph08 on Jun 16, 2021 14:06:07 GMT -5
I guess it’s time to level up: Twitter find: @ohhaiandy “Level 1: Spend all your $$$ Level 2: Save in a bank acct Level 3: Get your 401K match Level 4: Max out your Roth IRA Level 5: Invest even more into a brokerage acct. Level 6: Keep acquiring assets (BTC, Real Estate, etc) Getting rich is just a game. Know the rules and win.“ I would max out other tax preferred (401K/HSA) before moving on to taxable. Would you do 401k match, roth IRA, then max 401k?
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Post by minnesotapaintlady on Jun 16, 2021 14:14:47 GMT -5
My favorite account to look at for growth is my old 401K. It had a little over 20K in it when I rolled it over in 2002. I've never added another dime to it and it's now at over 190K.
Retirement accounts as a whole have gone from 351K in June 2017 to 740K now, but there were a lot in contributions the last 4 years. Probably over 100K.
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Post by minnesotapaintlady on Jun 16, 2021 14:16:12 GMT -5
I would max out other tax preferred (401K/HSA) before moving on to taxable. Would you do 401k match, roth IRA, then max 401k? Yes. Unless there was an HSA. I'd do that before maxing 401K.
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grumpyhermit
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Post by grumpyhermit on Jun 16, 2021 14:20:32 GMT -5
I guess it’s time to level up: Twitter find: @ohhaiandy “Level 1: Spend all your $$$ Level 2: Save in a bank acct Level 3: Get your 401K match Level 4: Max out your Roth IRA Level 5: Invest even more into a brokerage acct. Level 6: Keep acquiring assets (BTC, Real Estate, etc) Getting rich is just a game. Know the rules and win.“ I would max out other tax preferred (401K/HSA) before moving on to taxable. I max my Roth, but will never come close to maxing my 403(b). I do put enough in there to get the match, plus a bit more to get my overall retirement savings % where I want it.
I recently opened a taxable account. I have been putting cash aside for a potential down payment for the last few years. While I could just leave it in checking, it is earning nothing, and while I know there is risk putting it in the market, at least it has the potential to do something. My time horizon on these funds are 3+ years so I am okay with the risk.
Even if I threw everything I am saving toward the down payment toward retirement I still wouldn't be maxing my 403(b).
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Post by minnesotapaintlady on Jun 16, 2021 14:34:00 GMT -5
I would max out other tax preferred (401K/HSA) before moving on to taxable. I max my Roth, but will never come close to maxing my 403(b). I do put enough in there to get the match, plus a bit more to get my overall retirement savings % where I want it.
I recently opened a taxable account. I have been putting cash aside for a potential down payment for the last few years. While I could just leave it in checking, it is earning nothing, and while I know there is risk putting it in the market, at least it has the potential to do something. My time horizon on these funds are 3+ years so I am okay with the risk.
Even if I threw everything I am saving toward the down payment toward retirement I still wouldn't be maxing my 403(b). Saving for house down payments or cars or sinking funds is separate though, I'm talking about retirement savings. Guess I didn't clarify that.
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grumpyhermit
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Post by grumpyhermit on Jun 16, 2021 14:52:51 GMT -5
I max my Roth, but will never come close to maxing my 403(b). I do put enough in there to get the match, plus a bit more to get my overall retirement savings % where I want it.
I recently opened a taxable account. I have been putting cash aside for a potential down payment for the last few years. While I could just leave it in checking, it is earning nothing, and while I know there is risk putting it in the market, at least it has the potential to do something. My time horizon on these funds are 3+ years so I am okay with the risk.
Even if I threw everything I am saving toward the down payment toward retirement I still wouldn't be maxing my 403(b). Saving for house down payments or cars or sinking funds is separate though, I'm talking about retirement savings. Guess I didn't clarify that. Oh, that makes sense. Based on the quoted tweet it seemed more general savings to me. In that case, yes absolutely max the tax deferred accounts first. The only reason I would want taxable retirement accounts is if I was looking at early retirement, and in that case I assume post people are already able to max their other accounts. I make nowhere near enough for that to ever be of personal concern.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Jun 17, 2021 7:26:27 GMT -5
Can you be more specific by what you mean about taxable accounts? Explain it to me like I'm an 8th grader pls. It means an account where you deposit money (that has already been taxed - say from the money deposited into your checking account every payday) and buy investments - maybe the same funds? as are in your tax advantaged accounts (401k, Roth, etc). A 'taxable account' might also be a CD or the Savings account where you keep your Emergency Fund (If you are focusing on building a EF before you move on to investing). I get a 1099 from the bank (I have CDs and a Savings Acct) and pay taxes on the interest accrued. A 'taxable account' might be owning individual shares of stock in a Dividend Reinvestment Plan (back in the day you could buy stock directly from a company (I own shares in Utilities - I was gifted 4 shares when I was 11 after my dad died. The shares aren't held by Fidelity/Vangaurd/etc... I have way more than 4 shares now. I get a 1099-DIV statement every year so I can pay taxes on the dividends. I think more generally when someone says "taxable account' it usually means their account (that's not a retirement tax advantaged account - IRA or Roth for example) that they use to purchase shares in different funds (or sometimes individual stocks). I have accounts at Fidelity. I have a "personal account" or maybe they call it an Investment Account In this account, I have a "money market" fund and then I bought shares in an S&P 500 fund and a couple of other funds. This "personal account" or "investment Account" is my taxable account. I get a 1099 (or some other form) from Fidelity to be used when I do my taxes. I have a "roll over 401K" and a Roth accounts - I can move money around - transfer (sell) from one fund and (buy) another fund with out worrying about being taxed on the gains. these are "tax advantaged" Retirement accounts. Taxable Accounts generally generate Taxable Income (they can loose value, too) - that you have to account for (and pay taxes on the income) every year. How many shares of the utility do you have now? How much divvy per year? Such a great thing to have I think. Nice remembrance too.
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Value Buy
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Post by Value Buy on Aug 4, 2021 20:52:23 GMT -5
A taxable account is a account where you deposit money that has already been taxed (e.g., take home pay from your pay check).Savings account, investment account. A taxable account is simply an account where you pay taxes on all interest and capital gains on a yearly basis.
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Value Buy
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Post by Value Buy on Aug 5, 2021 10:46:48 GMT -5
It is amazing how fast these IRA and 401-k accounts have grown. We retired in 2014 and the deposits stopped at that time. We have been pulling quite a bit of money out (I now have had RMW for two years also) and yet the new share number total and total value of the funds increase over the previous year end totals........the last three years.
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tskeeter
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Post by tskeeter on Aug 5, 2021 23:34:03 GMT -5
Saving for house down payments or cars or sinking funds is separate though, I'm talking about retirement savings. Guess I didn't clarify that. Oh, that makes sense. Based on the quoted tweet it seemed more general savings to me. In that case, yes absolutely max the tax deferred accounts first. The only reason I would want taxable retirement accounts is if I was looking at early retirement, and in that case I assume post people are already able to max their other accounts. I make nowhere near enough for that to ever be of personal concern.
You might want part of your retirement savings in taxable accounts to manage your future tax liability. We are over invested in tax deferred retirement accounts. Prior to retirement, we paid about15% in federal income taxes. Now that we are retired and no longer funding retirement accounts, we’re paying about 25% in federal taxes. By the time I’m 72, and have to take RMD’s, our tax deferred retirement accounts will have grown to the point where RMD ‘s alone will have us at an income level where, according to Biden proposals, the federal government would take nearly 40% of our annual income. Wish I had done some Roth conversions, or shifted some of our retirement funds to taxable accounts back when we were in the 15% tax bracket. Between Medicare surcharges and higher income tax rates, it’s costing us about 75% more in taxes and surcharges to do a Roth conversion now than it would have cost us five years ago.
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trimatty471
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Post by trimatty471 on Sept 4, 2021 7:18:22 GMT -5
"I haven't had enough disposable income to fully fund my tax advantaged accounts (401K, Roth, HSA) AND make meaningful additions to an after tax account (I've got between 3 and 5K per year - compared to the 37K I can put into tax advantaged accounts). And so my "taxable account" was rather light in comparison to my retirement accounts. I realized I would need to be able to access/spend money that wasn't in a tax advantaged account if I wanted to "retire" before 59.5. I also realized if/when I could easily access my "tax advantaged" accounts having a sizeable pool of money already available would be to my advantage (so I could influence my taxable "income" levels once I FIre'd)." Same. I am investing 15% of my income for retirement. Leaning heavily toward my 401 (k). But I am also putting some money toward my taxable which so far has (FU) money.
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