Investing, Stock Market and Retirement Planning Thread

[Troy Loney]

While it's true that there are folks who are trying their best to make digital assets/currencies into an actual commodity.

The vast, vast majority of activity in the arena is speculative. There are only so few winners in that game, and they are generally goblins like Thiel.

[skullman80]

In the green for January..up 7ish %. I'll take it haha.

[mac5155]

I need the S&P to add about another 6-8% and the NASDAQ another 8-10% and I'll be happy.

[Willie Kool]

I've been all in on various bitcoin miners for over a year in my RH account. 2022 was absolutely brutal, but I'm up 163% YTD.

[mac5155]

Good day to check the portfolio. Mines a few hundred bucks away from beginning with a 2. I'm pretty stoked about that.

[mikey]

Congrats on only being down a hundred bucks!

[NTP66]

I checked the market in the morning, saw all red, left. Nice to see that things ended up the complete opposite, lol.

[NTP66]

Updated Quicken this morning to see that we hit a major milestone... 3 years early.

[MrKennethTKangaroo]

Just imagine if the government would let you contribute more than 21k per year per person into a 401k. Then you might actually have a chance of a comfortable retirement

[willeyeam]

lol

[Beveridge]

Just imagine if the government would let you contribute more than 21k per year per person into a 401k. Then you might actually have a chance of a comfortable retirement

It's not just about a comfortable retirement. It's about a comfortable retirement for the kids and grandkids, so it makes a big difference.

[NTP66]

Just imagine if the government would let you contribute more than 21k per year per person into a 401k. Then you might actually have a chance of a comfortable retirement

It's not just about a comfortable retirement. It's about a comfortable retirement for the kids and grandkids, so it makes a big difference.

Precisely. I'm trying to make it as easy as possible for not only my wife and I, but also my daughter. Anything I can take advantage of in order to get there - like more reasonable retirement account contribution limits - I'm going to do so in a heartbeat.

[MrKennethTKangaroo]

Just imagine if the government would let you contribute more than 21k per year per person into a 401k. Then you might actually have a chance of a comfortable retirement

It's not just about a comfortable retirement. It's about a comfortable retirement for the kids and grandkids, so it makes a big difference.

Yes the intent of tax deferred accounts was to make sure we could shield wealth from taxes for generations.

[mac5155]

New this year, my company 401k plan allows for some Roth IRA conversions. Can someone ELI5 how I should take advantage of this?

[mac5155]

Also a Gr8 week to be a $FDX shareholder, I guess

[NTP66]

Management died for this.

[Beveridge]

New this year, my company 401k plan allows for some Roth IRA conversions. Can someone ELI5 how I should take advantage of this?

Any money rolled over will become taxable because as of right now that money was put in tax deferred, while earnings also grow tax deferred. You would have to be careful because it would be taxed at ordinary income. You might want to consult with an advisor of the 401k plan if they have that available to see how to best take advantage.

I would consider it because of the tax free earnings growth. The up front savings, even when you consider higher tax bracket now vs lower tax bracket later, will be trounced by the growth in the account over a couple decades. As long as Uncle Sam doesn't change the rules midgame, I think it's a no brainer.

I'm biased because I'm a huge fan of Roth401k.

ELI5: Money converted will be taxed, but will then grow tax free and withdrawn tax free in retirement.

[mac5155]

Seems I can both convert, and start contributing to the plan.

Is the limit $6500 annually then?

[Beveridge]

An IRA is 6,500. If it's a 401k Roth through work, then the same limit applies as a regular 401k - $22,500

The only catch on a Roth IRA is there is a limit to how much you can earn to contribute. However, there is a backdoor Roth conversion that allows you to still contribute without any tax implication. @NTP66 can provide more as I one day hope to make enough to have to do backdoor (twss).

[NTP66]

Source of the post have to do backdoor (twss).

[NTP66]

Also, mac and I had this same conversation not too long ago:

Can you ELI5 what this is. I can't find a good explanation online..

It's to get around the ridiculous regulations surrounding Roth IRA contributions, where higher salary = lower limits. In a nutshell, you contribute to your Traditional IRA (balance on any Traditional, SEP, or SIMPLE IRA that you have must be $0 on 12/31 or you'll have to deal with taxes). Since there's no income limit there, you can contribute $6k for tax year 2022 ($6500 for tax year 2023). Once that completes, you go into your account and convert it to a Roth IRA. This bypasses the MAGI restrictions of contributing directly to a Roth IRA. This is the site I've used for years on guidance, and I've been doing this for a long time without issue.

[mac5155]

I just looked up the MAGI limits and ya boy is not close. Lol

[NTP66]

I just looked up the MAGI limits and ya boy is not close. Lol

Are you just using your salary and not calculating deductions, etc.? Also, it's your combined income if filing married/jointly.

[mac5155]

Under $214k? Yeah we're under that lol

[MrKennethTKangaroo]

Just remember that when you make a Roth conversion...you have to pay tax on that conversion, and the dollars that you convert aren't going to be available to pay that tax.

So if you have a 25% tax rate and make a 10k conversion, ur gonna need to come up with 2.5k of cash. Not everyone has the luxury of 2.5k of cash available to spend on taxes.