[PatentGuy]

Agree that the total tax burden will never be zero, but we are talking about a specific tax – income tax – that is levied on distributions from pre-tax plans, such as 401K plans. Property tax, sales tax, gas tax, etc., do not apply (at least not yet) to these distributions.

CA has high gasoline and sales taxes. It has low property taxes IF you just look at the percentage assessed, but plenty high IF you look at the amount paid. We own homes in California and Hawaii of approximately equal value, but the property taxes on our HI house are much lower than in CA.

[PatentGuy]

Agree that the total tax burden will never be zero, but we are talking about a specific tax – income tax – that is levied on distributions from pre-tax plans, such as 401K plans. Property tax, sales tax, gas tax, etc., do not apply (at least not yet) to these distributions.

CA has high gasoline and sales taxes. It has low property taxes IF you just look at the percentage assessed, but plenty high IF you look at the amount paid. We own homes in California and Hawaii of approximately equal value, but the property taxes on our HI house are much lower than in CA.

[PatentGuy]

Agree that the total tax burden will never be zero, but we are talking about a specific tax – income tax – that is levied on distributions from pre-tax plans, such as 401K plans. Property tax, sales tax, gas tax, etc., do not apply (at least not yet) to these distributions.

CA has high gasoline and sales taxes. It has low property taxes IF you just look at the percentage assessed, but plenty high IF you look at the amount paid. We own homes in California and Hawaii of approximately equal value, but the property taxes on our HI house are much lower than in CA.

[PatentGuy]

Agree that the total tax burden will never be zero, but we are talking about a specific tax – income tax – that is levied on distributions from pre-tax plans, such as 401K plans. Property tax, sales tax, gas tax, etc., do not apply (at least not yet) to these distributions.

CA has high gasoline and sales taxes. It has low property taxes IF you just look at the percentage assessed, but plenty high IF you look at the amount paid. We own homes in California and Hawaii of approximately equal value, but the property taxes on our HI house are much lower than in CA.

[PatentGuy]

Agree that the total tax burden will never be zero, but we are talking about a specific tax – income tax – that is levied on distributions from pre-tax plans, such as 401K plans. Property tax, sales tax, gas tax, etc., do not apply (at least not yet) to these distributions.

CA has high gasoline and sales taxes. It has low property taxes IF you just look at the percentage assessed, but plenty high IF you look at the amount paid. We own homes in California and Hawaii of approximately equal value, but the property taxes on our HI house are much lower than in CA.

[PatentGuy]

There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.

[PatentGuy]

There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.

[PatentGuy]

There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.

[PatentGuy]

There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.

[PatentGuy]

There is also the state tax, which is no small deal in California. We plan to move to a zero or low income tax state prior to taking any distributions from our tax deferred IRA/401K/CB Pension/403(b)/457 plans.

Slightly OT, but I’ve decided against converting a significant (over $500K) pre-tax IRA to a Roth IRA this year, despite the GWB fed rate of 35%, because we would also have to pay 9.55% CA tax, so real rate is around 42% (I can deduct part of the CA tax paid from my fed taxible income). Also, I don’t believe for a minute that 20 years from now the government won’t figure out how to “tax” any gains in the Roth IRA that were supposed to be “tax free”. And, I want to do my small part of starving the government beast. Paying out a big wad of volunary Fed and CA income tax this year will only make Congress and the Unions that much bolder in ramping up base-line spending for the future.

[PatentGuy]

Raybyrnes, I used HELOCs as an example of easy credit, not the reason college prices have skyrocketed.

If the vast majority of students did not have access to easy credit, colleges prices would have to come down. It is no different than housing. However well-intended the student loan laws may have been, the result has been sky-rocketing prices. The moe money the students can somehow come up with, the more that colleges will charge. (Q: How much does it cost? A: How much have you got?)

Having all this new found money has resulted in colleges having much larger budgets and more ways to spend it. So, the more they now “need” in order to fund the beast. (Sound familiar?)

I realize this is not helpful for the original poster, who is asking about whether to hire a financial planner (IMO “no”). As for how much to save for college? One other thing to keep in mind is that you will be penalized in any effort to obtain need-based financial aid (other than loans), since they look at family assets in addition to income. Savers are once again penalized, and spenders are rewarded, when it comes to financial aid.

If you do not hold out any hope for meaningful need-based scholarships, save whatever you can …

[PatentGuy]

Raybyrnes, I used HELOCs as an example of easy credit, not the reason college prices have skyrocketed.

If the vast majority of students did not have access to easy credit, colleges prices would have to come down. It is no different than housing. However well-intended the student loan laws may have been, the result has been sky-rocketing prices. The moe money the students can somehow come up with, the more that colleges will charge. (Q: How much does it cost? A: How much have you got?)

Having all this new found money has resulted in colleges having much larger budgets and more ways to spend it. So, the more they now “need” in order to fund the beast. (Sound familiar?)

I realize this is not helpful for the original poster, who is asking about whether to hire a financial planner (IMO “no”). As for how much to save for college? One other thing to keep in mind is that you will be penalized in any effort to obtain need-based financial aid (other than loans), since they look at family assets in addition to income. Savers are once again penalized, and spenders are rewarded, when it comes to financial aid.

If you do not hold out any hope for meaningful need-based scholarships, save whatever you can …

[PatentGuy]

Raybyrnes, I used HELOCs as an example of easy credit, not the reason college prices have skyrocketed.

If the vast majority of students did not have access to easy credit, colleges prices would have to come down. It is no different than housing. However well-intended the student loan laws may have been, the result has been sky-rocketing prices. The moe money the students can somehow come up with, the more that colleges will charge. (Q: How much does it cost? A: How much have you got?)

Having all this new found money has resulted in colleges having much larger budgets and more ways to spend it. So, the more they now “need” in order to fund the beast. (Sound familiar?)

I realize this is not helpful for the original poster, who is asking about whether to hire a financial planner (IMO “no”). As for how much to save for college? One other thing to keep in mind is that you will be penalized in any effort to obtain need-based financial aid (other than loans), since they look at family assets in addition to income. Savers are once again penalized, and spenders are rewarded, when it comes to financial aid.

If you do not hold out any hope for meaningful need-based scholarships, save whatever you can …

[PatentGuy]

Raybyrnes, I used HELOCs as an example of easy credit, not the reason college prices have skyrocketed.

If the vast majority of students did not have access to easy credit, colleges prices would have to come down. It is no different than housing. However well-intended the student loan laws may have been, the result has been sky-rocketing prices. The moe money the students can somehow come up with, the more that colleges will charge. (Q: How much does it cost? A: How much have you got?)

Having all this new found money has resulted in colleges having much larger budgets and more ways to spend it. So, the more they now “need” in order to fund the beast. (Sound familiar?)

I realize this is not helpful for the original poster, who is asking about whether to hire a financial planner (IMO “no”). As for how much to save for college? One other thing to keep in mind is that you will be penalized in any effort to obtain need-based financial aid (other than loans), since they look at family assets in addition to income. Savers are once again penalized, and spenders are rewarded, when it comes to financial aid.

If you do not hold out any hope for meaningful need-based scholarships, save whatever you can …

[PatentGuy]

Raybyrnes, I used HELOCs as an example of easy credit, not the reason college prices have skyrocketed.

If the vast majority of students did not have access to easy credit, colleges prices would have to come down. It is no different than housing. However well-intended the student loan laws may have been, the result has been sky-rocketing prices. The moe money the students can somehow come up with, the more that colleges will charge. (Q: How much does it cost? A: How much have you got?)

Having all this new found money has resulted in colleges having much larger budgets and more ways to spend it. So, the more they now “need” in order to fund the beast. (Sound familiar?)

I realize this is not helpful for the original poster, who is asking about whether to hire a financial planner (IMO “no”). As for how much to save for college? One other thing to keep in mind is that you will be penalized in any effort to obtain need-based financial aid (other than loans), since they look at family assets in addition to income. Savers are once again penalized, and spenders are rewarded, when it comes to financial aid.

If you do not hold out any hope for meaningful need-based scholarships, save whatever you can …

[Author]

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