Ask Rande 10,000+
- Kirk
- Kirk
- Rande
- Bernie777
- SRP_TEX
- Kirk
- Rande
- Rande
- Rande
- mdorsey
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» Kirk - Roth
In response to message posted by Rande:I think the ROTH IRA was a brilliant idea of the government that ranks right up there with the Lotto for taxing the stupid.
You see, you pay the tax on the ROTH UP FRONT! Many that can qualify for a ROTH are probably the type to piss it away with market timing or buying over valued B2B stocks when they should be buying the most conservative of growth investments, the total stock market.
(this sounds offensive, but I don't mean it so... just I have not been a fan of the ROTH from day one. I don't trust the government.... they said social security would not be taxed and it is... they can just as easily do the same for the ROTH)
With a ROTH, it doesn't matter if they piss away their retirement, as the tax has already been paid! Now with a regular IRA, the government doesn't get that tax if the booty is pissed away. Sad, but I know of people that put their IRA rollovers into JDSU at $40! More than a few have done this. We don't hear much about how devistated many retirement accounts are, but people might be working a long, long time if they caught the gambling bug just before retirement (perhaps too many QQQs?)
BTW, when I left HP 3 yrs ago, I rolled over one retirement account into index funds and bonds and the other into one I manage. I track my performance relative to the unmanaged account... I'm ahead but if I were losing ground, I'd have abandoned managing my own funds long ago... and made them all indexed. I wonder how many here benchmark their portfolios?
-- posted by Kirk
» Kirk - benchmarking
I just checked My IRA account I manage and I'm beating the S&P500 by over 6%. The unmanaged account is actually doing about the same due to its large bond holdings (66:34) even though it has 50% in international funds! This actually surprises me a bit but it sure is cool to have those benchmarks handy on a spreadsheet.The jokers on Yahoo that love my lousy stock picks should be happy that I have all those picks in my managed IRA account and I am STILL beating the S&P500... so it goes to show how you can take loads of risk and lose as long as you keep the size of the gamble small. I like using that very top of the investment risk pyramid for the high risk stuff.... which often goes bad.
-- posted by Kirk
» Rande - Re: benchmarking
In response to message posted by Kirk:
I wish I could just take my IRAs in isolation, those bond investments are looking good. 
But, as we know, it's the TOTAL portfolio that counts. There's always going to be some parts of the portfolio that do better or worse than others when diversification is present. The key is to look at the whole thing and measure on a global basis. As for the Roth, personally I think it's great for those who qualify and have exhausted tax-deductible alternatives. IF it comes down to investing after-tax money in a taxable fashion vs. a tax-free Roth environment, then why not go for the Roth if you're eligible? But I would not rush to the Roth FIRST without exploring the other alternatives and doing some serious number-crunching. A moot question for those with high AGIs who don't qualify in the first place.
-- posted by Rande
» SRP_TEX - Re: Roth IRA Contribution
In response to message posted by Rande:Rande,
I agree with your rankings on the contributions. One of the things that appealed to me was the ability to use Roth money for my daughters' college and it still be tax free. Now the Sec 529 funds seem more promising, albeit they have more restrictions on investments than the Roth does.
What is your opinion of the education side of the Roth vs the 529?
By the way Kirk, as I have mentioned before, my Roth money went into TEFQX for both 1999 and 2000. I guess I am one of the ones the govt loves that paid the tax and pissed away all hope of future savings.
Darn I hate it when that happens...
-- posted by SRP_TEX
» Kirk - Re: Re: Roth IRA Contribution
In response to message posted by SRP_TEX:I am REALLY sorry about the ROTH...
If it helps any, I've been buying some BOWG with my deductable IRA contributions... $2,000 buys quite a few shares at 15¢...but I paid more for some of the shares... Now I want to buy more it will cost 25¢ bit I'd only get 12¢ if I wanted to sell em... Someday, I hope it is very valuable, but I have put some in...
I still think small amounts of risky stuff is fine, but you really want a core that you don't do much for. My goal for this one IRA rollover of my pension fund was to have it 25% in bonds and 75% in the market. I needed foreign exposure so half went there, but I am still happy that the bonds did well and overall I have lost less than 10% in the account since I left HP 3 yrs ago. The idea was this is my pension so I should try to be somewhat conservative... the 401K I was more agressive with and have done better, but I kept it seperate... As Rande says, I do look at the total portfolio, but I assign risk taking in categories where I want some chunks of money safer than others.
Now with my taxable monies, I often use this to get semiconductor capx companies as I like to try to buy low and take profits when high... so the tax code can be put to good use if needed. IF I am successful, I'd rather pay the 20% LTCG rate than my normal income rate I'd have to pay with a 401K when I take the money out. Funny, but the shares I "trade" I use the IRA for... so it is a mix... IF I go back to a normal job, I may get more conservative as I won't have time for all this stuff to the degree I do today.
-- posted by Kirk
» Rande - In the spirit of "Best of Web Guide".
In the spirit of "Best of Web Guide"......
From the Journal of Accounting's "Smart Stops on the Web":
The public's picks for the best stops on the Web in categories such as art, business, education, e-zines and government.
http://www.financiallearning.com
The GE Center was "developed to promote financial literacy." Its resource center features a financial dictionary, planning tools and tips on using the Internet.
Does your kid have a homework project involving any or all of the 50 states? This is a thoroughly informative site on all 50 states. Each listing has alphabetical categories including when each state was admitted to the Union, area codes, economy, local weather, parks and yellow pages. Also, a college and university directory, current events, and tax forms.
A profit sharing and 401k advocate site. FAQs about benefit plans, historical data on growth of 401k plan participation, etc.
Another good 401k site.
From the "California CPA":
Devoted to California state tax issues.
http://www.estateplanninginks.com
self-explanatory
Everything tax.
Everything tax for non-CPA types.
http://www.dvorak.org/home.htm
http://www.computers.pcc.edu/-pmcg/home....
More tech support links than you can possibly wade through.
Great resources for small business owners.
Syndicated radio show host Clark Howard's Web site features financial planning information in a down-to-earth format.
Happy surfing!
-- posted by Rande
» Rande - Re: 457 rollover to IRA
In response to message posted by Bernie777:Bernie,
Your main consideration should be the investment options available. Many prefer the self-directed, unlimited options available in a personal IRA, as well as the reduced paperwork of having only one statement to deal with. BTW, I'd double-check with your plan administrator on the current yield for your stable value option as well as the most recent credit quality rating for the underwriter (this is most likely a GIC, or insurance company "guaranteed investment contract").
-- posted by Rande
» Rande - Re: Re: Roth IRA Contribution
In response to message posted by SRP_TEX:
SRP,
Since distributions from 529 Plans will be tax-free beginning next year, they're hard to beat when it comes to college savings. There may be more flexibility with a Roth, but the ability to make MUCH larger contributions to the 529s makes them VERY attractive for parents looking to do some serious college saving. Here's an excellent link to section 529 plan info:
-- posted by Rande
» mdorsey - Re: 457 rollover to IRA
In response to message posted by Bernie777:I expect to research this problem as soon as all my 457 changes become known later this year or early next. I currently am drawing from my 457 on a monthly basis. The amount is fixed and cannot be changed. Part of my problem will be that I am under age for penalty free IRA withdrawals, except for 72t periodic payments. I am hoping for more payout options in my 457. If not, I may roll my 457 to an IRA at age 59 1/2.
-- posted by mdorsey
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