On the ground in Dentown. Now to find my chauffeur and get the hell back to the prairie where I belong.
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On the ground in Dentown. Now to find my chauffeur and get the hell back to the prairie where I belong.
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I was very brave during landing, no gasping, crying or whimpering.
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1. That was a good read and it completely solidified why a Roth is right for me. I absolutely plan to have an income higher than my current income later in my life. Also, what if you're 65 and you want to buy your dream house for $500k? If you take money from a traditional IRA to pay for that, you actually need to withdraw $755k because you're going to pay $255k in taxes that year. From a Roth, you withdraw $500k and admire your beautiful new home. The taxes you originally paid on that $500k are significantly less than $255k - somewhere between $30-50k, depending on how much and how long you were contributing to the account.Quote:
Originally Posted by Irving
1.1 This article seems to have completely left out the most significant reason why a Roth IRA is advantageous: Tax Free Growth. If you contribute 330k (max for married couple x 30 years) and it grows to $1.15M over 30 years (only earning 7%, the market average), in a traditional IRA, you pay taxes on all $1.15M as you withdraw it. In a Roth, you only pay taxes on the contributions, and NONE of the growth. Remember, the growth is the real reason we have IRAs to begin with! Unless my income is more than $200k/yr (which would change the fundamental argument here), I would much rather contribute $330k of taxed income over 30 years than get taxed on $1.15M - or significantly more than $1.15M because it will continue to grow as long as the account is funded - for the rest of my life.
1.2 I plan to pass a good chunk of my wealth on to future generations of HoneyBadgers and Roth IRAs offer several advantages when it comes to estate planning.
2. As someone who formerly contributed to a TSP account.... It was terrible. Terrible returns. Turrible. My mutual funds over the past 5 years have averaged 10.2% (I'd like to be somewhere between 12-14%) and my TSP accounts (which I set up to mirror my mutual funds as closely as possible) ran a 5-year average of 6.7%. Yes TSP has a few tax advantages, but it doesn't make up for the lost earnings.
That sounds like something my 3 year old niece would say... ;)Quote:
Originally Posted by buffalobo
See post above, irrational fear of flying, your nice would probably be braver.Quote:
Originally Posted by HoneyBadger
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I'm glad your over it. Or at the very least, done with it. [Flower]Quote:
Originally Posted by buffalobo
And I'm glad you didn't die while surfing the internet on your phone and driving over 100mph in the middle of the night in the middle of Alabama.
Don't forget listening to loud rock music from the 80's.Quote:
Originally Posted by HoneyBadger
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After a week of intense, stressful(condensed 3 week course into 1 week) training, I had to twist off and alcohol was not an option.
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HB, did you read where he does the math showing the difference in earnings compared to the taxes paid? I particularly liked the part about funding a traditional IRA, then transferring it to a Roth later, but I don't know if those specific circumstances would ever come up in my life. I like the idea of funding both, and as he initially points out, the most important part is funding at all, and much less w which path you chose.
Interesting that you didn't have a great experience with the TSP's. Nice to bounce ideas off of someone who is active in real markets. There is a link to some management tool on there as well, but I didn't post it.