All Forum Posts by: David C.

Do you have the option of taking cash instead?  sometimes that is offered.  Can you refuse delivery and let the dealer keep it and let them buy it from you, they can then still sell it as 'new'.  That's your best bet to get near full price for it.

The real question to me is: can you afford the toy?  If you had won $7k would you go out and buy one?

Also - don't forget, if you sell it for $7k, you will still get a 1099 for $9k and have that tax liability, so your net is closer to $5k.  Don't forget to keep that $2k around for the tax man next spring!

they 1099 you at sticker price.  I won a car and had to pay taxes on an end-of-model year Ford as if it was worth sticker price!

@Walt Payne - I'm with you.  If you are planning a very high-income retirement, then the Roth is the way to go.

I expect much of my income to be from selling investments, which already have a cost basis, so there should be a low income, but a high enough cash flow to pay expenses.

If I sell $70k of stock in a taxable account that cost me $30k, I have 40k in long term gains and no income.  So my $70k RMD from my 401k is my only income that year, and I have $140,000 to spend on a nice lifestyle.

I don't anticipate a high income retirement, so for me, the 401k makes sense.

Do you agree?  You've clearly thought this through and have a plan.

I'd swear my first response did not post!! so I typed it up again, now I have idiot double post.  I hope I did not contradict myself!! haha.

@Walt Payne , clever: 'settle for that $50k'.

Not settling, just pointing out the very favorable tax treatment of the first 50k, but I'll have to admit, what 50k is first is really an exercise in mental accounting.  

I'd say there's a tipping point.  If you are in a low tax bracket today, definitely Roth.  Married under 73k(15%)?  definitely Roth, Married under 148k(25%)?  probably Roth.  Over 148k(28%+)  I'd at least do a mix to avoid some of that 28% tax.  Unless you are at 200k now and expect to be at 500k(39%) when retired.  If that's your plan, I have no opinion, I've spent no time thinking about that.

My goals are modest by comparison.  If I have a retirement income around 120,000, that's more than enough for me.  Today that would put me in a 25% tax bracket on the marginal dollars.  The tax I'm avoiding is 28% some years, 33% in good years.  So for me, taking the tax deduction now makes the most sense.  I don't see the 'eat the rich' 'wealth gap' arguments really pushing up those lower brackets.  If you expect to land in the 35% or 39% brackets when its time to pull from a 401k - then I think you are right on to go for the Roth, those are the rates I could see going up dramatically.  Unless you are in those brackets today.  I think I'd still take a 39% tax savings today over a 'hoped for' 39% or even 55% tax savings later.  39% is a lot of taxes to pay voluntarily.  What if your plans don't work out and you are in the measly 33% bracket later?  and you volunteered to pay 39% today?  that would burn.

@Walt Payne nice twist there Walt!  'settle for 50k of income'  haha.

I said 'first 50k' is essentially never taxed at all - not taxed when I saved it, barely taxed on the way out.  50k/year of my retirement free on both ends.

Have you done the math? I'll be honest, I haven't.  And I do both Roth and 401(k), to bet a little bit against myself being wrong.

If you are close to retirement, you really think that your retirement income will be higher than your current income?  Is that because you see yourself running out of depreciation expense as you age and keep properties? or fewer interest deductions?

Or do you expect a bump in the top tax rates in the next 5 years?  So you think: today I'm in the top bracket, and when I retire, I'll still be in the top bracket, and the top bracket will go up between now and then?  So you see the 39% bracket jumping to what?  and my g-d that only kicks in after 457,000/year for married filers.  We are in a different world if you are suffering that tax rate now, and expect to in the future!

@Walt Payne you are thinking exactly how the government wants you to think.

I think it can be politically difficult to raise income tax rates, but its not as hard to raise fees, sales taxes, gas taxes etc... so they money you volunteered to pay taxes on early, so you had less to invest, will be taxed again when you try to use it.

I firmly believe the first 50,000 of income will be taxed very low for a long time to come.  With no pensions, and minimal(or zero) social security due to means testing, most of my never-taxed 401k contributions will be taxed at near zero when they come back out.

I will never volunteer to pay a tax today that I can avoid or defer.  We can only be 100% certain about what today's tax policy is.

After a long morning of selling $25,000 mentoring programs, dodging emails and phone calls from current mentees and scanning the business news for stories to add to my resume, I'm always faced with the difficult choice of which exotic cars and bikini models to use in the next marketing pamphlet.

I just bought my first 'new car' - I'm 42. We bought 2 minivans new for the wife, but I could never bring myself to do it. Its a leftover 2013 F150 FX4 with all the goodies. I could have paid cash, but one of the rebates required financing with Ford and had no alternate cash back, so I'm taking the leverage at 3.99%.

We have a 2013 Chrysler T&C we bought last Fall when we decided 110k miles on the old van was too much for long trips with the kids.

Also, another mustang here: 2003 GT convertible, wife won that in a slot machine in Atlantic City for 50 cents. Best deal ever, we can never get rid of it. That's still under 50,000 miles, maybe even still under 40,000.

I shopped recently used low-miles F150's but there is such a small discount, I could not bring myself to buy one used. Of course, now cars.com ads come up on every web page with deals on recently used F150's and its driving me a bit nuts.

The pictures look pretty and all, but I'm disappointed, I see you started with a 'house with a bar' and ended up with a 'house with no bar' ?

Better luck next time :)

the 2 new pics were right. all the old ones come up upside down for me.