NT: Official Personal Finances Thread

[blackdynamite]

I can't seem to win in this forex market! FML

 

[throwback1718]

I hate this country....

I checked on paycheckcity I know I'd be putting a lot of OT in this year.

So I put out a number.. If I made about 100K this year, after taxes, Ill only be able to touch 60K

thats if I put nothing in any 401/457 plans. So its surely less after I put in my contributions.

Sucks being a single person trying to get their lives in order... You get taxed so heavily.

 

[nrg1604]

How did u arrive at that amount? Federal tax rates are progressive and not a flat rate so at 100k, your effective tax rate is only 28%.

 

[capital sb]

Buy a home if you can or start a business. Just now finding out how these business write offs work . Lowered my taxable income a lot on top of me owning a home.

 

[206to813]

I hate this country....

I checked on paycheckcity I know I'd be putting a lot of OT in this year.

So I put out a number.. If I made about 100K this year, after taxes, Ill only be able to touch 60K

thats if I put nothing in any 401/457 plans. So its surely less after I put in my contributions.

Sucks being a single person trying to get their lives in order... You get taxed so heavily.

So if I understand it right , if u put a lot into your 401k it reduces your FIT taxable and can put u into a lower tax bracket , potentially. Is that right? Maybe if u have enough deductions (home ownership) you'll get into that tax bracket if the 401k deductions didn't get it there

 

[$tatus $ymbol]

Yea the way I understand it is the bigger your contribution to your 401k the lower your taxable income. I'm at 5% right now, my company doesn't match but they do profit sharing & the first 10% goes to your 401k. But that money is taxed at 30% bc its a bonus. Working on switching fields so I can get out of this mess.

 

[pdino]

So if I understand it right , if u put a lot into your 401k it reduces your FIT taxable and can put u into a lower tax bracket , potentially. Is that right? Maybe if u have enough deductions (home ownership) you'll get into that tax bracket if the 401k deductions didn't get it there

Common misconception is that you're "jumping" to and from tax brackets:

The first 0$-9325$ everyone is taxed 10%

From 9325$-37,950$ everyone is taxed 15%, the first 9325% is still taxed at 10%

from 37,950$-91,900$ taxed 25%.

Ex. If you make 91,901$, you are not taxed at the 28% bracket for all your $. The first 9,325$ is taxed at 10%, then your 9,325-37,950 is taxed 15%, then your 37,950-91,900$ is taxed at 25%, with 1$ being taxed at 28%.

401k does reduce your taxable income, as well as traditional IRA. Say you make 100k, put in max (18k), your taxable income is 82k (100k-18k). Putting all your taxable income in the 25% bracket instead of having some in the 28%.

 

[206to813]

Oh ok gotcha. Repped, I didn't know that

 

[nrg1604]

For 401k, u have the option of making contribution pre or post tax.

Pre-tax means contribution is deducted before your federal income tax is calculated, reducing your tax obligation now but you will be taxed when you withdraw money at retirement.

Post-tax means contribution is deducted after your federal income tax is calculated. So you will pay tax for it now but won't have to pay tax when you withdraw at retirement.

 

[throwback1718]

That's why I got 457 pre tax and Roth 401...

Did my calculations. So that I get 12k in em by end of year. Next year I'll try to Max at 18 k.

But still. Sheesh. How can I save for a house if I only get to see 50% of my earnings? Then got bills, rent etc to pay?

 

[dam itz lou]

Any recommendations on an IRA account ?

 

[nrg1604]

Vanguard is a popular one for Roth IRA.

 

[Xennial]

What about traditional ira

 

[antidope]

You guys can open IRAs at the majority of brokerage firms, it doesn't really have to a one place or nowhere kind of thing. 

Its not as if Vanguard would offer a Roth IRA and not offer a Traditional.

 

[cruzair13]

anyone open a barclay's dream savings account? 1.05 and 2.5 percent bonuses for depositing an amount monthly and another 2.5 percent for no withdrawals.

thanks in advance

 

[HankHill]

anyone open a barclay's dream savings account? 1.05 and 2.5 percent bonuses for depositing an amount monthly and another 2.5 percent for no withdrawals.

thanks in advance

1.05% on your balance. The other percentages are on the interest you gained, not your balance.

Limited to $1000 deposit a month. If you plan on depositing more than that go with the regular Barclays saving.

 

[antidope]

Best interest rate I've seen is at Santander bank. 1.20% interest rate if you keep the balance above 10k, 0.30% if it drops below that.

 

[tay1]

Don't know too much about IRA. Just looking into the stuff. I have a retirement account from an old employer, PARS to be exact. Was wondering should I open an IRA or is the account I already have good enough?

 

[alfa]

 
Don't know too much about IRA. Just looking into the stuff. I have a retirement account from an old employer, PARS to be exact. Was wondering should I open an IRA or is the account I already have good enough?

Off the top, accounts like the PARS/PERS are deferred retirement accounts that public/government employees receive.

If I'm right about the PARS being a deferred compensation/457 plan, then I think it's great you have that account. IMO, I think these accounts are awesome because they're deferred compensation in the sense that you can withdraw from the account before you're 59.5 years old without getting hit with the 10% penalty, like you would for a 401k/403b. Either way, probably best not to withdraw unless you needed to. You can also transfer the money over to an IRA that you manage, if you want, since your account is probably being managed by whatever company your employer has a deal with.

Either way, if you're interested in saving for retirement and minimizing your tax hit (now or later), I'd recommend getting an IRA (Roth or traditional is up to you, since everybody's situation and goals are different). Contributing to the traditional IRA will lower your taxable income, so you pay less in federal taxes now, park it in an investment to grow, and then get taxed when you withdraw after you're 59.5. Contributing to the Roth IRA will mean you take money that has already been taxed, park it in an investment to grow, and withdraw after you're 59.5 tax-free (unless laws change). 

As for places to open an IRA, most brokers should be around the same with their fees. I'd shop around and see who's best for you in terms of what they offer (platform, physical offices/digital, banking, etc). The big names like Vanguard, Fidelity, TDAmeritrade, Big Banks, etc, should have trades around $6.95 and commission free trades into mutual funds. 

Hope that helps, fam. Get them money gains. 

 

[tay1]

Repped. Appreciate the info.

 

[206to813]

If someone is debt free except the mortgage, and makes good income, what takes priority- 401k or extra mortgage payments?
I'm thinking with my age (33) I want to put as much as I can into my 401k to take advantage of time x growth. Since the mortgage rate is fixed at a good rate, I'm going to try to max out my 401k first, then pay towards mortgage after the limit is hit for the year. Sound thinking?

 

[based mod]

401k for sure

Compounding interest is your best friend

 

[antidope]

I'd do 401k max for sure. I started maxing mine a while ago and I hope to never look back and have to change it.

 

[206to813]

Ok cool thanks fellas, repped. That's what I was thinking.

2017 = about to be the first year I hit my 401k limit

 

[SneakerProSr.]

If someone is debt free except the mortgage, and makes good income, what takes priority- 401k or extra mortgage payments?
I'm thinking with my age (33) I want to put as much as I can into my 401k to take advantage of time x growth. Since the mortgage rate is fixed at a good rate, I'm going to try to max out my 401k first, then pay towards mortgage after the limit is hit for the year. Sound thinking?

How many years is your mortgage?