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samjones
Bay Ridge Socialite
Joined: Sep 18, 2005
Posts: 233
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 Posted: Tue Nov 22, 2005 11:48 pm Post subject: Re: Social Security & Medicare |
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| DaveTheRave wrote:
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| samjones wrote:
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The possibility that a T-Bond could suddenly lose its value seems preposterous to any sane person.
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Bond prices are inversely related to interest rates. If rates go up, then the market value of your bonds will fall. But there would be no threat of the US not paying off the bond when it matures. I'm sure that's what you meant.
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Yes, I wasn't referring to the secondary bond market. |
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samjones
Bay Ridge Socialite
Joined: Sep 18, 2005
Posts: 233
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| Posted: Wed Nov 23, 2005 10:09 am Post subject: Re: Social Security & Medicare |
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| DaveTheRave wrote:
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My unsolicited advice: be proactive about securing your own retirment. If you're eligible for a 401(k) plan at work, then enroll in it now and contribute as much as you can afford. The company match is free money. If you can, open up a Roth-IRA and contribute the annual maximum, if you can afford it. Get informed about how these other plans work and make saving a priority, even if its not a lot of money at first. If you're young and delay 10 years to do it you'll never make up for the loss of what you could have made by the compounding of returns.
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It's a good start of advice.
1. Contribute to your 403b Thrift to the extent that your employer will match your contributions <period>.
2. Beyond that, a Roth IRA is probably a better option for any one under 30. $2000 per year, iirc.
3. If you don't own a home, take what's left over and get together a down payment. A primary residence is an excellent investment.
4. If you have children, check on the New York Saves college investment program. That's tax free money right there. |
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CaptainAwesome
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Joined: Aug 30, 2004
Posts: 605
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| Posted: Wed Nov 23, 2005 11:21 am Post subject: Re: Social Security & Medicare |
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| samjones wrote:
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It's a good start of advice.
1. Contribute to your 403b Thrift to the extent that your employer will match your contributions <period>.
2. Beyond that, a Roth IRA is probably a better option for any one under 30. $2000 per year, iirc.
3. If you don't own a home, take what's left over and get together a down payment. A primary residence is an excellent investment.
4. If you have children, check on the New York Saves college investment program. That's tax free money right there.
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403b if you work for a public or non-profit institution. you want to get all the free money you can and then stop putting money in it unless you have no self control.
the roth ira should be maxed out as long as you can still contribute to it.
and know that without FICA you would have 12% of your gross income to save which could be enough for your retirement. so you wouldnt have to put 12% of your money to FICA plus save 10 or so percent of your net earnings. its criminal as far as im concerned. |
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samjones
Bay Ridge Socialite
Joined: Sep 18, 2005
Posts: 233
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| Posted: Wed Nov 23, 2005 12:32 pm Post subject: Re: Social Security & Medicare |
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| CaptainAwesome wrote:
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the roth ira should be maxed out as long as you can still contribute to it.
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Just curious why you say this. Do you feel that the Roth IRA is better than a conventional IRA for older people? Or are you simply saying that you should save as much as you can for retirement?
There is such a thing as having too much money in your 401K. The money that you set aside for retirement income should be used for exactly that - retirement income. The advantages of drawing money from your 401K are greatly reduced or eliminated if you're using that money to pay your mortgage, put your grandchildren through college, buy a boat, etc.
If you feel that you'll have enough money in your 401K (and related retirement income sources) to live on in the style that you desire then you should start putting your extra money somewhere else. |
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CaptainAwesome
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Posts: 605
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| Posted: Wed Nov 23, 2005 3:57 pm Post subject: Re: Social Security & Medicare |
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| samjones wrote:
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Just curious why you say this. Do you feel that the Roth IRA is better than a conventional IRA for older people? Or are you simply saying that you should save as much as you can for retirement?
There is such a thing as having too much money in your 401K. The money that you set aside for retirement income should be used for exactly that - retirement income. The advantages of drawing money from your 401K are greatly reduced or eliminated if you're using that money to pay your mortgage, put your grandchildren through college, buy a boat, etc.
If you feel that you'll have enough money in your 401K (and related retirement income sources) to live on in the style that you desire then you should start putting your extra money somewhere else.
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Im not a fan of the 401k or IRA except if you can get an employer to match your contributions. much like i dont think social security will be there for me when i retire, i also dont think my tax bracket will be any lower when taxes are collected from my tax deferred retirement accounts. i would rather just pay my taxes now and then not have to pay taxes on the gains later on.
its not hard to find information on why the roth is generally better than the regular IRA (which is why democrats dont like it) but im a little rusty on the details so your best bet is to search. not only are there tax advantages but i believe you can take money from the roth without penalty so long as it isnt interest. |
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samjones
Bay Ridge Socialite
Joined: Sep 18, 2005
Posts: 233
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| Posted: Wed Nov 23, 2005 4:14 pm Post subject: Re: Social Security & Medicare |
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| CaptainAwesome wrote:
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its not hard to find information on why the roth is generally better than the regular IRA (which is why democrats dont like it) but im a little rusty on the details so your best bet is to search. not only are there tax advantages but i believe you can take money from the roth without penalty so long as it isnt interest.
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I don't think that the details of the Roth IRA have changed since I last looked into it, and then neither earnings nor appreciation would be taxed. Contributions to the fund were post-tax dollars. Conventional IRA's are pre-tax dollars, but withdrawals (including earnings and appreciation) will be taxed.
It's a subtle difference that can have significant financial implications. Roth IRA's fared better for the under 30 crowd, conventional IRA's were favored by the above 35 crowd.
I'm not a fan of trying to accumulate wealth by having a big retirement income account either. The amount of money you end up withdrawing from your retirement account should keep you in a low tax bracket. There's nothing wrong with having a big chunk of money sitting in non-tax-sheltered accounts. |
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CaptainAwesome
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Posts: 605
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| Posted: Wed Nov 23, 2005 5:17 pm Post subject: Re: Social Security & Medicare |
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| samjones wrote:
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The amount of money you end up withdrawing from your retirement account should keep you in a low tax bracket.
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If things go in the wrong direction the low tax bracket could be higher than the highest current tax bracket. |
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DaveTheRave
Bay Ridge Lover
Joined: Dec 16, 2002
Posts: 53
Location: USA
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| Posted: Wed Jun 03, 2009 10:29 pm Post subject: Re: Social Security & Medicare |
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| Anonymous wrote:
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Who wants to bet when GM will file for bankruptcy?
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Well you saw it here first! |
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