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(former)FormerSanDiegan
Participant[quote=desmond][quote=FormerSanDiegan][quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said ![/quote]
Without all the government intervention he would have been right now, he will be right later.[/quote]
How would the lack of government intervention have resulted in lower losses for assets deployed to foreign markets ?
(former)FormerSanDiegan
Participant[quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said !
(former)FormerSanDiegan
Participant[quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said !
(former)FormerSanDiegan
Participant[quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said !
(former)FormerSanDiegan
Participant[quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said !
(former)FormerSanDiegan
Participant[quote=temeculaguy]
If I predict that the house you are in will burn down and tell you to run to your neighbors house to be safe, then both your house and the neighbors house burn down, am I genius?[/quote]Well said !
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Not sort of. Yes. Convert the 95K too.[/quote]
My point is that you would pay significant taxes on conversions in many cases.
If you have existing IRAs, there is a big difference between being able to contribute to a Roth and being able to convert to a Roth !
Example:
If you make 151K and use the contribute and convert strategy, it will cost you about ~$2000 in taxes (in addition to the taxes you already paid on the 5K you earned) in my example. But if you made less than 150K, you can contribute directly to a Roth and not pay the conversion tax.If one were to take the suggestion to convert the entire 100K in my example, it would cost about ~ 38 K. (28 % federal, 9.3% CA state tax brackets, unless it bumped you over 208K income, which makes it 33% federal, oh yeah and there is that 1% surtax in CA so that’s an extra $380).
It would also put many people in these brackets further into AMT territory and impact phase out of deductions. The marginal tax hit could be significantly more than 38K.
The contribute/convert to a Roth for people making over 150K is really not the same as removing the income test on Roth contributions, for those with existing IRAs.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Not sort of. Yes. Convert the 95K too.[/quote]
My point is that you would pay significant taxes on conversions in many cases.
If you have existing IRAs, there is a big difference between being able to contribute to a Roth and being able to convert to a Roth !
Example:
If you make 151K and use the contribute and convert strategy, it will cost you about ~$2000 in taxes (in addition to the taxes you already paid on the 5K you earned) in my example. But if you made less than 150K, you can contribute directly to a Roth and not pay the conversion tax.If one were to take the suggestion to convert the entire 100K in my example, it would cost about ~ 38 K. (28 % federal, 9.3% CA state tax brackets, unless it bumped you over 208K income, which makes it 33% federal, oh yeah and there is that 1% surtax in CA so that’s an extra $380).
It would also put many people in these brackets further into AMT territory and impact phase out of deductions. The marginal tax hit could be significantly more than 38K.
The contribute/convert to a Roth for people making over 150K is really not the same as removing the income test on Roth contributions, for those with existing IRAs.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Not sort of. Yes. Convert the 95K too.[/quote]
My point is that you would pay significant taxes on conversions in many cases.
If you have existing IRAs, there is a big difference between being able to contribute to a Roth and being able to convert to a Roth !
Example:
If you make 151K and use the contribute and convert strategy, it will cost you about ~$2000 in taxes (in addition to the taxes you already paid on the 5K you earned) in my example. But if you made less than 150K, you can contribute directly to a Roth and not pay the conversion tax.If one were to take the suggestion to convert the entire 100K in my example, it would cost about ~ 38 K. (28 % federal, 9.3% CA state tax brackets, unless it bumped you over 208K income, which makes it 33% federal, oh yeah and there is that 1% surtax in CA so that’s an extra $380).
It would also put many people in these brackets further into AMT territory and impact phase out of deductions. The marginal tax hit could be significantly more than 38K.
The contribute/convert to a Roth for people making over 150K is really not the same as removing the income test on Roth contributions, for those with existing IRAs.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Not sort of. Yes. Convert the 95K too.[/quote]
My point is that you would pay significant taxes on conversions in many cases.
If you have existing IRAs, there is a big difference between being able to contribute to a Roth and being able to convert to a Roth !
Example:
If you make 151K and use the contribute and convert strategy, it will cost you about ~$2000 in taxes (in addition to the taxes you already paid on the 5K you earned) in my example. But if you made less than 150K, you can contribute directly to a Roth and not pay the conversion tax.If one were to take the suggestion to convert the entire 100K in my example, it would cost about ~ 38 K. (28 % federal, 9.3% CA state tax brackets, unless it bumped you over 208K income, which makes it 33% federal, oh yeah and there is that 1% surtax in CA so that’s an extra $380).
It would also put many people in these brackets further into AMT territory and impact phase out of deductions. The marginal tax hit could be significantly more than 38K.
The contribute/convert to a Roth for people making over 150K is really not the same as removing the income test on Roth contributions, for those with existing IRAs.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Not sort of. Yes. Convert the 95K too.[/quote]
My point is that you would pay significant taxes on conversions in many cases.
If you have existing IRAs, there is a big difference between being able to contribute to a Roth and being able to convert to a Roth !
Example:
If you make 151K and use the contribute and convert strategy, it will cost you about ~$2000 in taxes (in addition to the taxes you already paid on the 5K you earned) in my example. But if you made less than 150K, you can contribute directly to a Roth and not pay the conversion tax.If one were to take the suggestion to convert the entire 100K in my example, it would cost about ~ 38 K. (28 % federal, 9.3% CA state tax brackets, unless it bumped you over 208K income, which makes it 33% federal, oh yeah and there is that 1% surtax in CA so that’s an extra $380).
It would also put many people in these brackets further into AMT territory and impact phase out of deductions. The marginal tax hit could be significantly more than 38K.
The contribute/convert to a Roth for people making over 150K is really not the same as removing the income test on Roth contributions, for those with existing IRAs.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Starting in 2010, everyone is basically eligible for the Roth. You have to contribute to a traditional, but can transfer to Roth at any time.[/quote]
Sort of…
While you can convert traditional IRA contributions to a ROTH with no income limits you will have to pay taxes if you have other existing IRAs. The conversion from a traditional to a Roth requires that you consider ALL of your IRAs in computing any tax that might be due.
So, if you have 95K in a rollover IRA for example and you want to contribute $5K to a traditional IRA in 2010 and convert to a ROTH, you pay tax on 95% of your conversion.
This is not exactly the same as being eligible to contribute to a Roth.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Starting in 2010, everyone is basically eligible for the Roth. You have to contribute to a traditional, but can transfer to Roth at any time.[/quote]
Sort of…
While you can convert traditional IRA contributions to a ROTH with no income limits you will have to pay taxes if you have other existing IRAs. The conversion from a traditional to a Roth requires that you consider ALL of your IRAs in computing any tax that might be due.
So, if you have 95K in a rollover IRA for example and you want to contribute $5K to a traditional IRA in 2010 and convert to a ROTH, you pay tax on 95% of your conversion.
This is not exactly the same as being eligible to contribute to a Roth.
(former)FormerSanDiegan
Participant[quote=waiting for bottom]Starting in 2010, everyone is basically eligible for the Roth. You have to contribute to a traditional, but can transfer to Roth at any time.[/quote]
Sort of…
While you can convert traditional IRA contributions to a ROTH with no income limits you will have to pay taxes if you have other existing IRAs. The conversion from a traditional to a Roth requires that you consider ALL of your IRAs in computing any tax that might be due.
So, if you have 95K in a rollover IRA for example and you want to contribute $5K to a traditional IRA in 2010 and convert to a ROTH, you pay tax on 95% of your conversion.
This is not exactly the same as being eligible to contribute to a Roth.
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