friendfromlowry wrote:

“Canada booed the national anthem!”

Who cares about what Canada does or hockey for that matter.

Hockey is a great sport. Imagine soccer if the athletes played a sport that had real action and solved problems with punches instead of writhing in agony on the ground like a toddler who just suffered a little boo-boo in hopes of drawing a card from a ref.

But as for the booing, WGAF other than the over-politicized weirdos whose lives suck so much they have nothing going on besides their attempts to "own" anyone online? BREAKING NEWS: Residents of country upset over threats of trade war/tariffs combined with leader of neighboring country suggesting that their really large country that's divided into several provinces lower itself to become one state.

Cool that we beat them, though! Always fun to show superiority over another location in "their sport".

Trueblue23 wrote:

Fucking insanity.  

I remember the days where the left wing devotees on this site argued that we should be like Europe. My response is the same now as it was then - no.

As for Canada... Well, they repeatedly elected Trudeau who seemingly completed with Trump for the most outlandish ideas. 

Trump: Gulf of Mexico/Gulf of America

Trudeau: mankind must change to peoplekind

Sometimes, for me, it's the littlest trivial things that stand out like neon signs that has one thinking WTF. 

And the US and Canada, as shown by true blue's video, aren't the only countries suffering from bouts of stupidity. All of Europe is suffering from identity crisis. All of this will jumble our collective brains, but sometimes it's really hard not to see some humor in the backslide.

Just filed my taxes. I'm irrationally outraged about that.

Automatik wrote:

Just filed my taxes. I'm irrationally outraged about that.

Don't get me started.  I had to make a rather large Q4 estimated payment because I somehow borked up my withholding.  And that's to say nothing on top of the amount that had already been withheld.

If you aren't a 1%er, your path to being a millionaire is through investing.  But Uncle Sam makes sure we don't have much leftover to invest.  I look at my tax bill and it's like "that could have funded 2 years of retirement with SS".

I should have been more proactive with prepaying during 2024. I just didn't think it would be a huge hit.

Got an exit package/severance paid over 6 months, then landed another job, and also converted a chunk of Trad IRA to Roth. Then factor in crypto gainz (minimal, but I still reported)....I got hosed. Should be a one year thing, but I do need to continue with the IRA conversion over the next 2-3 years.

On a positive note, I did everything by myself. No need to pay a tax pro.

Automatik wrote:

and also converted a chunk of Trad IRA to Roth.

Smart.  I did a nice chunk during the pandemic when my income was way down.  Should have done more but wasn't really aware of the ability.  But I have been able to roll a decent amount each year of after-tax contributions to my 401k into my Roth.

My Roth has grown to a respectable enough amount to be a decent nest egg when it doubles after 10 years.  I'm hoping when I retire sometime in the next 5-10 years I can still do some mega backdoor conversions.  But they've been talking about closing that loophole for years, and I wonder if it will survive Trump's new tax cuts.

I just learned about all of this shit the last 2 years (thanks ChatGPT!). Better late than never I guess.

Yearly Q1 backdoor Roth conversions are the goal. I just requested my Trad to Roth conversion for 2025. Bigly adulting going on!

Automatik wrote:

I just learned about all of this shit the last 2 years (thanks ChatGPT!). Better late than never I guess.

Yearly Q1 backdoor Roth conversions are the goal. I just requested my Trad to Roth conversion for 2025. Bigly adulting going on!

You need to be careful you're actually reducing your taxes, though.  You can look at RMD tables and project your 401k out 20-30 years or whatever at different growth rates.  You probably still have some deductions, like property tax, and maybe mortgage interest...

So think about that plus social security and what your marginal rate would be.  You should only be doing conversions BELOW your anticipate marginal rate.  And obviously inflation over 30 years might almost double those tax brackets.  For comparison, I guess if I make it to 90 I don't care what my taxes are at that point, but it would be roughly 1/8th.  So $1M would be a required distribution of $125k, but for a married filer that's likely solidly in the 15% bracket.

Were you also aware you can put $8k into an after-tax traditional IRA (I'm assuming your income, or a workplace 401k, disqualifies you from pre-tax) and immediately do a conversion to Roth?  The key is, which you should already know from other conversions, is you CANNOT have any other pre-tax IRA money or you need to use the shared allocation methodology.

gut wrote:

Were you also aware you can put $8k into an after-tax traditional IRA (I'm assuming your income, or a workplace 401k, disqualifies you from pre-tax) and immediately do a conversion to Roth?  The key is, which you should already know from other conversions, is you CANNOT have any other pre-tax IRA money or you need to use the shared allocation methodology.

Yes, that's the goal. Trad IRA is eventually 0. Contribute full amount as early as possible in Q1 of each new year, then convert to Roth immediately. 

We should have a personal finance bro / investing thread. 

Automatik wrote:

I just learned about all of this shit the last 2 years (thanks ChatGPT!). Better late than never I guess.

Yearly Q1 backdoor Roth conversions are the goal. I just requested my Trad to Roth conversion for 2025. Bigly adulting going on!

Explain that to me like I’m 5 years old. 

Sure!!

Alright! Let's imagine you have a piggy bank where you save money. There are two special kinds of piggy banks called "Traditional IRA" and "Roth IRA." Each of these piggy banks has its own rules for saving and spending your money.

Traditional IRA Piggy Bank: Imagine every time you earn a dollar from doing chores and put it in this piggy bank, you don't have to give any of your candy away (which is like paying taxes). You can keep all your candy for now. But, when you grow up and decide to take the money out to buy a big toy, then you need to give away some of your candy.

Roth IRA Piggy Bank: Now, think about the Roth IRA. When you put a dollar in this piggy bank, you do give away a little bit of your candy right away. But, when you're all grown up and you take the money out, you get to buy your big toy without giving away any more candy! So, you save some candy now, but get to enjoy all of it later.

Sometimes, though, grown-ups find that they can't put their money into a Roth IRA piggy bank directly because they've earned too many dollars (there's a rule on how many dollars you can earn and still be able to put money in the Roth IRA). So, they use a smart trick called a "Backdoor Roth IRA."

Backdoor Roth IRA Conversion:

Step 1: First, they put their money in the Traditional IRA piggy bank, where everyone is allowed to put their money.

Step 2: Then, they quickly move that money to the Roth IRA piggy bank. It’s like moving your toys from one box to another. When they do this, they give away a little bit of candy (pay a little tax).

Step 3: Now, the money is in the Roth IRA, and when they take it out when they're old, they don't have to give away any more candy.

It's like a little magic trick to help people save their money and candy for when they are very old!

Ok, so put money in a traditional IRA now, transfer it to a roth IRA, pay a little bit of a penalty/tax but not the full amount as if you took a withdrawal from the traditional IRA.

Then, at retirement, no taxes out of the Roth IRA....

So, does this only make sense if someone is already maxing out yearly 401k contributions ($23k in 2024), and makes too much to contribute to a roth IRA on top of the 401k?

For me it's just another investment vehicle. I only have a  company matched 401k, I don't max out...yet and not sure if I ever will. I just contribute enough to get their match (4%).

Then I dump additional funds into the Trad IRA and a brokerage account. 

I'm also no where close to retirement, so I have a lot of time to tweak further.

Automatik wrote:

For me it's just another investment vehicle. I only have a  company matched 401k, I don't max out...yet and not sure if I ever will. I just contribute enough to get their match (4%).

Then I dump additional funds into the Trad IRA and a brokerage account. 

I'm also no where close to retirement, so I have a lot of time to tweak further.

Not questioning your way of doing, asking a question to learn something....

Why would you put your extra money in a Trad IRA and/or a brokerage account before maxing out 401k as that is pretax now?

Currently I completely max out my 401k, put in $23k last year and will put in $23.5k this year as well as some in a roth ira post tax.

What's the thought process/advantage to not using 401k and using Trad IRA/Brokerage?

My 401k is traditional and not even a year old. 

My current traditional / roth IRA setup with Schwab is the result of rollover from a previous employer. 

jmog wrote:

What's the thought process/advantage to not using 401k and using Trad IRA/Brokerage?

It's just a tax arb.  If  you're in the same marginal bracket in retirement as today, pre-tax vs. post-tax is exactly equal.  So when you contribute pre-tax to a 401k, you're expecting your marginal bracket to be lower in retirement.  That's likely true for most people who don't amass a gigantic 401k.  Roth's also pass to your heirs tax free, but they'll have only 10 years to drawdown the 401k and taxed at ordinary rates.

Given how tough it is to get money into Roth - a loophole which was only created @2005 (with the backdoor conversion some time around 2010) - it makes sense to get as much as you can in, especially early in your career.  Eventually this loophole will get the budget ax eventhough it really helps the upper quintile but pretty trivial for the rich.  That is, unless your Mitt Romney and buy equity in your fund and investments out of Roth and your 100-fold return is all tax free.

Automatik wrote:

My 401k is traditional and not even a year old. 

My current traditional / roth IRA setup with Schwab is the result of rollover from a previous employer. 

Have you looked at being able to roll your traditional IRA into your workplace 401k?  Usually it's only 401k to 401k, but worth exploring.  Would save you the hassle of trying to convert away and pay taxes on the IRA.

When I was a contract employee, I had a self-employed 401k.  I believe I was able to roll my SEP into it to get rid of my pre-tax IRAs.

Got less than an inch of snow overnight. School is still closed somehow. 

friendfromlowry wrote:

Got less than an inch of snow overnight. School is still closed somehow. 

Yesterday the weather hit about an hour after our people check the roads and I drove the entire way in decently slick snowy roads and the last 25 miles was not good. When we all got to school the superintendent came on the announcements and apologized for the decision.

The timing is bad in some of these cases and teenage drivers driving plays a small role as well. Not defending, just saying.