Bob Brinker Free Discussion Site 59,820+

Top 921. Jan 14, 2006 4:56 PM

» allancoleman - Re: Converting Reg IRAs to Roths

In response to Re: Converting Reg IRAs to Roths posted by Kirk:

glad you agree with my retirement plannng . i feel that retirement / tax plannng is TOO important to entrust to any single individual or tax / or planning preparer . i feel that no one is going to spend the time necessary to fully understand the full implications of the tax code and planning as it relates to every facet and age of your retirement . i'm willing to spend that time as it's my smile money .

i , too , have taken market corrections to do Roth conversions and feel those who complain about Q's dropping from $80+ dollars a share to less than $20 a share would have been better served to ' make lemonade out of lemons ' and converted those Q's in deferred accounts to a Roth and enjoyed a " double " of their taxfree Roth from the less than $20 Q share price to it's present value . and , of course , a further taxfree gain when Q's move up further in price . ? ? but i generally find that those who are quick to blame others for there own investment decisions ( who in the heck held a gun to their head and told them to buy Q's and hold them to the levels they fell ? smile ? ) are usually clueless as to other prudent and wise investment ideas . or maybe it's just my attitude . smile .

you are wise to be concerned about future tax levels . especially for those of us with the amount of money most of us who subscribe to these threads have in our total accounts . just as AMT is hitting more and more of us , the tax code will shallow up more and more of the income from us " haves " as opposed to the " have nots " . and i still don't fully understand why the government hasn't outlawed Roth conversions as they've limited Roth contributions . ? ?

as a ' general ' rule , those who have more than a million dollars at age 60 are best served by studing Roth conversions cause the required distributions at age 70 1/2 and beyond could place them in the highest tax bracket FOREVER . and every year you miss a Roth conversion is one year less you have before reaching 70 1/2 . cause after age 70 1/2 , attempting to be required minmum distributions AND Roth conversions is really difficult , if not impossible .

-- posted by allancoleman

Top 922. Jan 15, 2006 10:04 AM

» allancoleman - Re: allancoleman Congrats & MAGI

In response to Re: allancoleman Congrats & MAGI posted by smile_1:

hello again smile1 ,

for purposes of Roth conversions , MAGI is calculated by taking your normal AGI and adding to that figure :

1) any student loan interest deduction

2) any tution & fees deduction

3) any foreign earned interest

4) any foreign housng deduction

5) any excluded qualified savings bond interest

6) any exclusion of employer - provided adoption benefits

the total of the above is your " Modified AGI for IRA purposes "

this is from the retirees bible " IRS publication 590 " . hope this helps you and others on figuring their Roth conversions .

and as a reminder , your conversion amount is not included in your $ 100k MAGI limit . in other words , your conversion dollar amount is above and beyond that $100k limit .

-- posted by allancoleman

Top 923. Jan 15, 2006 10:28 AM

» AL_W - Re: Re: Converting Reg IRAs to Roths

In response to Re: Converting Reg IRAs to Roths posted by allancoleman:

Allan,

What tax rate do you pay when you make the conversion? I thought it was the same rate as if you did a normal IRA withdrawal? You've given me a inkling in your posts that the converstions are saving NOW tax $. Yes, I understand that it saves you the tax of the Cap Gains after the conversion. It also transfers to your heirs without the withdrawal requirements of a std IRA. Both are big pluses.

Although my current IRA's are fairly modest, when I retire in 5 years, I'll rollover the 401K and my retirement lump sum to an IRA. Additionally, I can withdraw "my $" out of the 401K at any time, if it makes sense to do so. So I'm curious to understand more.

-- posted by AL_W

Top 924. Jan 15, 2006 12:09 PM

» jamesj24 - Another Free Day

I heard Terry Savage and shut off the radio. That frees me up for another weekend of not listening to the radio.

I heard Bob mention a few weeks ago that a person could buy another $60,000 of I-bonds now that we are in a new calendar year. I checked o on the Treasury Direct web site and confirmed that the limit is indeed based upon a calendar year.

What do you all think of the risk/reward of committing a significant amount of money to the I-bonds at the somewhat deflated base rate of 1%, nothwithstanding the generous 6.7% that they will pay for 6 months? We're looking at an inflation component of about 5.7%, which is probably 2.7% higher than the 3% Bob said to use going forward. It seems worth it to me.

-- posted by jamesj24

Top 925. Jan 15, 2006 12:23 PM

» jamesj24 - By the way....

6-month T-bills are now paying over 4.4% state tax free. I'm putting some free cash in those. The yield curve is certainly close to inverting, if it hasn't already. yet, the stock market seems to want to celebrate something, and it will take a while for it to catch up with reality, notwithstanding Bob's denial about the significance of an inverted yield curve. As I recall, he said the Fed would stop tightening and the yield curve would be back to normal.

-- posted by jamesj24

Top 926. Jan 16, 2006 1:37 PM

» jamesj24 - December core PPI rose a less than expected 0.

"December core PPI rose a less than expected 0.1%, revealing no sign of increasing inflationary pressures. The total rate rose 0.9% (consensus 0.4%)."

The restrained core rate was received as good news, and the bond market rallied. However, the actual increase annualizes to 10.8%! How can that be perceived as anything other than just hyperinflation?

BB seems to be ignoring all these danger signals. He's painting a rosey colored picture to support his bullish stance.

Hold on folks, I believe that you will see a very decent correction within the coming weeks.

-- posted by jamesj24

Top 927. Jan 16, 2006 2:38 PM

» SteveT - Re: Re: Re: Brinker gives the secular bull at least a few more m

In response to Re: Re: Brinker gives the secular bull at least a few more month posted by bbaddict:

bbaddict, I know you addressed this to allan but I would like to give my two cents worth when you asked.
As you reverse engineer Bob's model, what components changed for him to call the bottom at S&P 800? He was monitoring something that made him say, "Wait....Waaaiiit....Waaaaiiittt...... NOW! Buy!"

Brinker normally evaluates his model every Monday after the markets close. March 10, 2003 was a heck of a day. War was looming with Iraq. When the bullets started flying in 1990 the markets took off. Will L. had been predicting brinker would go back to fully invested around the time the war started for several days. The markets closed very near the October 2002 lows. I am sure at that point bob was licking his chops. He had a second chance to get back in near the lows. He no doubt took a look at the P/E and saw it was under 15 for the S&P 500. Monetary policy was neutral and the ten-year Treasury was nearing 3.5%! Not much money to be made in bonds unless you have some to sell. The economy was not exactly humming along, bob often was using the word “Malaise” describing the economy. Nowhere to go but up. War as ugly as it can be is simulative to the economy.

I think the stars were aligned for bob to go back into the market with the cash he had left, he was looking for Technical confirmation to pull the trigger. As I recall the advance/decline line was atrocious March 10, 2003. Also the major market indices closed near the October 2002 lows and the volume was significantly lower on both the NYSE and NASDAQ than it was October 9, 2002.

One other item I don’t think we talked about at the time. The day before David Korn published his newsletter which covers bob’s radio show. In that issue David announced he would be taking off the following weekend and wouldn’t be publishing. Being a secretive guy I think everything fell into place and it was irresistible for bob to stay out of the markets another day.

The short answer is David Korn, advance/decline line, and lower volume vs. October 9, 2002.

-- posted by SteveT

Top 928. Jan 16, 2006 7:37 PM

» bbaddict - Re: Re: Re: Re: Brinker gives the secular bull at least a few mo

In response to Re: Re: Re: Brinker gives the secular bull at least a few more m posted by SteveT:

Thanks, Steve. I need to go back and see what the RSI and put/call ratio was at the time. I will also look at A/D and volume. Same for Oct 2002.

But I highly doubt that the market or Bob depended in any way on David Korn's vacation.

-- posted by bbaddict

Top 929. Jan 16, 2006 8:36 PM

» allancoleman - Re: Brinker gives the secular bull at least a few mo

In response to Re: Re: Re: Re: Brinker gives the secular bull at least a few mo posted by bbaddict:

i certainly agree with your opinion bbaddict about David Korn's influence on Bob Brinker's model . smile .

or occassonal references here to Bob Brinker's paying any attention to anything or anyone else on this or any other site .

just my opinion of course .

-- posted by allancoleman