[PatentGuy]

To be clear – what I meant in my first post about staying in equities was that I was less concerned if they drop in value, since the goverment pays 42% of any loss. Yes, I still pay 58% of it …

[PatentGuy]

To be clear – what I meant in my first post about staying in equities was that I was less concerned if they drop in value, since the goverment pays 42% of any loss. Yes, I still pay 58% of it …

[PatentGuy]

To be clear – what I meant in my first post about staying in equities was that I was less concerned if they drop in value, since the goverment pays 42% of any loss. Yes, I still pay 58% of it …

[PatentGuy]

To be clear – what I meant in my first post about staying in equities was that I was less concerned if they drop in value, since the goverment pays 42% of any loss. Yes, I still pay 58% of it …

[PatentGuy]

To be clear – what I meant in my first post about staying in equities was that I was less concerned if they drop in value, since the goverment pays 42% of any loss. Yes, I still pay 58% of it …

[PatentGuy]

Bottom Waiter –

Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.

Regarding equities v. cash, maybe I don’t understand what you mean, but I thought this was account-based. For example, we have an IRA account funded through the years by a couple of rollover 401ks from past employers. The money within the IRA account, for better and worse, is invested in several different equity funds. If we sell the funds and buy T-bills, or the like, the monies are still under the “umbrella” of the same IRA account.

Setting aside my complete lack in trust of government (out of its demonstrated ineptness more than anything else) I’m still not convinced paying the taxes now makes sense. Help me with the math (or the meth, if need be for understanding the numbers).

In addition to the IRA, I have a current 401K (all before tax contributions), plus my wife is a teacher, and we pump the full amount allowed each year into each of her 403b and 457k plans. As far as I know, these are the same as 401ks in the eyes of the IRS.

We are in the max tax bracket (net incremental Fed and Cal is around 42% excluding SEF taxes which are not avoided by these plans). If we “convert” one or more of our existing IRA, 401k, 403b, 457 accounts to after-tax Roth status by paying the taxes in a lumpo sum, can we continue to contribute the same annual amounts to the accounts “after tax” from now on, despite our income being over the traditional Roth limits?

Or, can we just “convert” what we have in the pot as of Jan 1, 2010, and then go back to before-tax contributions (making for an accounting Cluster Shucks situation by the time we retire)?

I’ll take all free advice from anyone who has some insight on this stuff. Thanks.

[PatentGuy]

Bottom Waiter –

Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.

Regarding equities v. cash, maybe I don’t understand what you mean, but I thought this was account-based. For example, we have an IRA account funded through the years by a couple of rollover 401ks from past employers. The money within the IRA account, for better and worse, is invested in several different equity funds. If we sell the funds and buy T-bills, or the like, the monies are still under the “umbrella” of the same IRA account.

Setting aside my complete lack in trust of government (out of its demonstrated ineptness more than anything else) I’m still not convinced paying the taxes now makes sense. Help me with the math (or the meth, if need be for understanding the numbers).

In addition to the IRA, I have a current 401K (all before tax contributions), plus my wife is a teacher, and we pump the full amount allowed each year into each of her 403b and 457k plans. As far as I know, these are the same as 401ks in the eyes of the IRS.

We are in the max tax bracket (net incremental Fed and Cal is around 42% excluding SEF taxes which are not avoided by these plans). If we “convert” one or more of our existing IRA, 401k, 403b, 457 accounts to after-tax Roth status by paying the taxes in a lumpo sum, can we continue to contribute the same annual amounts to the accounts “after tax” from now on, despite our income being over the traditional Roth limits?

Or, can we just “convert” what we have in the pot as of Jan 1, 2010, and then go back to before-tax contributions (making for an accounting Cluster Shucks situation by the time we retire)?

I’ll take all free advice from anyone who has some insight on this stuff. Thanks.

[PatentGuy]

Bottom Waiter –

Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.

Regarding equities v. cash, maybe I don’t understand what you mean, but I thought this was account-based. For example, we have an IRA account funded through the years by a couple of rollover 401ks from past employers. The money within the IRA account, for better and worse, is invested in several different equity funds. If we sell the funds and buy T-bills, or the like, the monies are still under the “umbrella” of the same IRA account.

Setting aside my complete lack in trust of government (out of its demonstrated ineptness more than anything else) I’m still not convinced paying the taxes now makes sense. Help me with the math (or the meth, if need be for understanding the numbers).

In addition to the IRA, I have a current 401K (all before tax contributions), plus my wife is a teacher, and we pump the full amount allowed each year into each of her 403b and 457k plans. As far as I know, these are the same as 401ks in the eyes of the IRS.

We are in the max tax bracket (net incremental Fed and Cal is around 42% excluding SEF taxes which are not avoided by these plans). If we “convert” one or more of our existing IRA, 401k, 403b, 457 accounts to after-tax Roth status by paying the taxes in a lumpo sum, can we continue to contribute the same annual amounts to the accounts “after tax” from now on, despite our income being over the traditional Roth limits?

Or, can we just “convert” what we have in the pot as of Jan 1, 2010, and then go back to before-tax contributions (making for an accounting Cluster Shucks situation by the time we retire)?

I’ll take all free advice from anyone who has some insight on this stuff. Thanks.

[PatentGuy]

Bottom Waiter –

Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.

Regarding equities v. cash, maybe I don’t understand what you mean, but I thought this was account-based. For example, we have an IRA account funded through the years by a couple of rollover 401ks from past employers. The money within the IRA account, for better and worse, is invested in several different equity funds. If we sell the funds and buy T-bills, or the like, the monies are still under the “umbrella” of the same IRA account.

Setting aside my complete lack in trust of government (out of its demonstrated ineptness more than anything else) I’m still not convinced paying the taxes now makes sense. Help me with the math (or the meth, if need be for understanding the numbers).

In addition to the IRA, I have a current 401K (all before tax contributions), plus my wife is a teacher, and we pump the full amount allowed each year into each of her 403b and 457k plans. As far as I know, these are the same as 401ks in the eyes of the IRS.

We are in the max tax bracket (net incremental Fed and Cal is around 42% excluding SEF taxes which are not avoided by these plans). If we “convert” one or more of our existing IRA, 401k, 403b, 457 accounts to after-tax Roth status by paying the taxes in a lumpo sum, can we continue to contribute the same annual amounts to the accounts “after tax” from now on, despite our income being over the traditional Roth limits?

Or, can we just “convert” what we have in the pot as of Jan 1, 2010, and then go back to before-tax contributions (making for an accounting Cluster Shucks situation by the time we retire)?

I’ll take all free advice from anyone who has some insight on this stuff. Thanks.

[PatentGuy]

Bottom Waiter –

Thanks for your response(s). I agree regarding the non-use of the funds to pay the taxes, but regarding splitting the tax bill with 2011, that will likely be a loser for us since the GWB tax rates expire and the Obama et al tax rates (and surcharges) will kick in. Probably makes more sense just to pay the bill in 2010.

Regarding equities v. cash, maybe I don’t understand what you mean, but I thought this was account-based. For example, we have an IRA account funded through the years by a couple of rollover 401ks from past employers. The money within the IRA account, for better and worse, is invested in several different equity funds. If we sell the funds and buy T-bills, or the like, the monies are still under the “umbrella” of the same IRA account.

Setting aside my complete lack in trust of government (out of its demonstrated ineptness more than anything else) I’m still not convinced paying the taxes now makes sense. Help me with the math (or the meth, if need be for understanding the numbers).

In addition to the IRA, I have a current 401K (all before tax contributions), plus my wife is a teacher, and we pump the full amount allowed each year into each of her 403b and 457k plans. As far as I know, these are the same as 401ks in the eyes of the IRS.

We are in the max tax bracket (net incremental Fed and Cal is around 42% excluding SEF taxes which are not avoided by these plans). If we “convert” one or more of our existing IRA, 401k, 403b, 457 accounts to after-tax Roth status by paying the taxes in a lumpo sum, can we continue to contribute the same annual amounts to the accounts “after tax” from now on, despite our income being over the traditional Roth limits?

Or, can we just “convert” what we have in the pot as of Jan 1, 2010, and then go back to before-tax contributions (making for an accounting Cluster Shucks situation by the time we retire)?

I’ll take all free advice from anyone who has some insight on this stuff. Thanks.

[PatentGuy]

An admittedly goofball reason we are keeping our pre-tax retirement accounts in equities for the time being is that we’re considering converting to Roth next year. Our current retirement accounts are all pre-tax because of the income limits on Roth contributions until now. But, Harry, Nancy and Barry need my money NOW, not later when they are gone, and the “opportunity” to pay a butt load of tax now to convert the whole wad to “after tax” status in 2010, with (allegedly) tax free accumulation thereafter (yes, assumes we can “accumulate” rather than depreciate) is intriguing. If equities dip, drop, plummet, etc., by the time we hit Jan 1, 2010 (I believe the date that matters for tax liability purposes), then we pay less tax in 2010 (and 2001) for doing the conversion.

Am I being stupid because it’s better to pay a higher tax and have higher principal to grow thereafter tax free if I convert to cash? Or am I being stupid for even considering converting to Roth to begin with? Or both? (they are not mutually exclusive stupidities).

Are any of you Piggs or Pigglets considering converting pre-tax to after-tax next year? There is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources. Government changes the rules all the time and has no memory.

If I convert to cash to “fix” the amount, I pay tax on the current levels even though I do not intend to make any withdrawals for least another 20 years (I am 48 this year).

Have any of you Piggs (or Pigglets) been pondering this same dilema? Am I being stupid because better to pay higher tax and still have the principal to grow thereafter tax free if I convert to cash? Or am I even dumber for even considering converting to Roth to begin with?

Is anyone else considering the conversaion of pre-tax to Roth and paying the taxes now? there is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources.

[PatentGuy]

An admittedly goofball reason we are keeping our pre-tax retirement accounts in equities for the time being is that we’re considering converting to Roth next year. Our current retirement accounts are all pre-tax because of the income limits on Roth contributions until now. But, Harry, Nancy and Barry need my money NOW, not later when they are gone, and the “opportunity” to pay a butt load of tax now to convert the whole wad to “after tax” status in 2010, with (allegedly) tax free accumulation thereafter (yes, assumes we can “accumulate” rather than depreciate) is intriguing. If equities dip, drop, plummet, etc., by the time we hit Jan 1, 2010 (I believe the date that matters for tax liability purposes), then we pay less tax in 2010 (and 2001) for doing the conversion.

Am I being stupid because it’s better to pay a higher tax and have higher principal to grow thereafter tax free if I convert to cash? Or am I being stupid for even considering converting to Roth to begin with? Or both? (they are not mutually exclusive stupidities).

Are any of you Piggs or Pigglets considering converting pre-tax to after-tax next year? There is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources. Government changes the rules all the time and has no memory.

If I convert to cash to “fix” the amount, I pay tax on the current levels even though I do not intend to make any withdrawals for least another 20 years (I am 48 this year).

Have any of you Piggs (or Pigglets) been pondering this same dilema? Am I being stupid because better to pay higher tax and still have the principal to grow thereafter tax free if I convert to cash? Or am I even dumber for even considering converting to Roth to begin with?

Is anyone else considering the conversaion of pre-tax to Roth and paying the taxes now? there is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources.

[PatentGuy]

An admittedly goofball reason we are keeping our pre-tax retirement accounts in equities for the time being is that we’re considering converting to Roth next year. Our current retirement accounts are all pre-tax because of the income limits on Roth contributions until now. But, Harry, Nancy and Barry need my money NOW, not later when they are gone, and the “opportunity” to pay a butt load of tax now to convert the whole wad to “after tax” status in 2010, with (allegedly) tax free accumulation thereafter (yes, assumes we can “accumulate” rather than depreciate) is intriguing. If equities dip, drop, plummet, etc., by the time we hit Jan 1, 2010 (I believe the date that matters for tax liability purposes), then we pay less tax in 2010 (and 2001) for doing the conversion.

Am I being stupid because it’s better to pay a higher tax and have higher principal to grow thereafter tax free if I convert to cash? Or am I being stupid for even considering converting to Roth to begin with? Or both? (they are not mutually exclusive stupidities).

Are any of you Piggs or Pigglets considering converting pre-tax to after-tax next year? There is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources. Government changes the rules all the time and has no memory.

If I convert to cash to “fix” the amount, I pay tax on the current levels even though I do not intend to make any withdrawals for least another 20 years (I am 48 this year).

Have any of you Piggs (or Pigglets) been pondering this same dilema? Am I being stupid because better to pay higher tax and still have the principal to grow thereafter tax free if I convert to cash? Or am I even dumber for even considering converting to Roth to begin with?

Is anyone else considering the conversaion of pre-tax to Roth and paying the taxes now? there is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources.

[PatentGuy]

An admittedly goofball reason we are keeping our pre-tax retirement accounts in equities for the time being is that we’re considering converting to Roth next year. Our current retirement accounts are all pre-tax because of the income limits on Roth contributions until now. But, Harry, Nancy and Barry need my money NOW, not later when they are gone, and the “opportunity” to pay a butt load of tax now to convert the whole wad to “after tax” status in 2010, with (allegedly) tax free accumulation thereafter (yes, assumes we can “accumulate” rather than depreciate) is intriguing. If equities dip, drop, plummet, etc., by the time we hit Jan 1, 2010 (I believe the date that matters for tax liability purposes), then we pay less tax in 2010 (and 2001) for doing the conversion.

Am I being stupid because it’s better to pay a higher tax and have higher principal to grow thereafter tax free if I convert to cash? Or am I being stupid for even considering converting to Roth to begin with? Or both? (they are not mutually exclusive stupidities).

Are any of you Piggs or Pigglets considering converting pre-tax to after-tax next year? There is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources. Government changes the rules all the time and has no memory.

If I convert to cash to “fix” the amount, I pay tax on the current levels even though I do not intend to make any withdrawals for least another 20 years (I am 48 this year).

Have any of you Piggs (or Pigglets) been pondering this same dilema? Am I being stupid because better to pay higher tax and still have the principal to grow thereafter tax free if I convert to cash? Or am I even dumber for even considering converting to Roth to begin with?

Is anyone else considering the conversaion of pre-tax to Roth and paying the taxes now? there is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources.

[PatentGuy]

An admittedly goofball reason we are keeping our pre-tax retirement accounts in equities for the time being is that we’re considering converting to Roth next year. Our current retirement accounts are all pre-tax because of the income limits on Roth contributions until now. But, Harry, Nancy and Barry need my money NOW, not later when they are gone, and the “opportunity” to pay a butt load of tax now to convert the whole wad to “after tax” status in 2010, with (allegedly) tax free accumulation thereafter (yes, assumes we can “accumulate” rather than depreciate) is intriguing. If equities dip, drop, plummet, etc., by the time we hit Jan 1, 2010 (I believe the date that matters for tax liability purposes), then we pay less tax in 2010 (and 2001) for doing the conversion.

Am I being stupid because it’s better to pay a higher tax and have higher principal to grow thereafter tax free if I convert to cash? Or am I being stupid for even considering converting to Roth to begin with? Or both? (they are not mutually exclusive stupidities).

Are any of you Piggs or Pigglets considering converting pre-tax to after-tax next year? There is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources. Government changes the rules all the time and has no memory.

If I convert to cash to “fix” the amount, I pay tax on the current levels even though I do not intend to make any withdrawals for least another 20 years (I am 48 this year).

Have any of you Piggs (or Pigglets) been pondering this same dilema? Am I being stupid because better to pay higher tax and still have the principal to grow thereafter tax free if I convert to cash? Or am I even dumber for even considering converting to Roth to begin with?

Is anyone else considering the conversaion of pre-tax to Roth and paying the taxes now? there is part of me suspicious that a broke and destitute government 20 years from now will change the rules and tax us on the gains anyway, or count the Roth account distributions against us in determining how much tax on pay on other income sources.

[Author]

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