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Author Topic:   Phat Unplugged
Omnivorous
Member
Posts: 4001
From: Adirondackia
Joined: 07-21-2005
Member Rating: 3.4


(1)
Message 331 of 352 (916628)
03-07-2024 8:08 PM
Reply to: Message 330 by Percy
03-07-2024 8:02 PM


Re: The Problem With Excessive Government
We've always underpaid--its definitely a gain in financial utility. If you don't gamble.
I used to have various side gigs that provoked some nonsense about quarterlies from the IRS, but I ignored them.

"If you can keep your head while those around you are losing theirs, you can collect a lot of heads."

Homo sum, humani nihil a me alienum puto.
-Terence


This message is a reply to:
 Message 330 by Percy, posted 03-07-2024 8:02 PM Percy has not replied

  
dwise1
Member
Posts: 5983
Joined: 05-02-2006
Member Rating: 2.2


(1)
Message 332 of 352 (916629)
03-07-2024 8:10 PM
Reply to: Message 323 by Tanypteryx
03-07-2024 7:06 PM


Re: The Problem With Excessive Government
I've not been as ingenious. I opened a 401K when I finally worked where it was offered (about 25 years before retiring) and chose to contribute the maximum when I could -- if you never see it you never miss it. Then I just forgot about it and it grew quite nicely.
In the meantime, I had always paid away more on the balance of our mortgage. I taught myself using a spreadsheet (Multiplan on a TI-99) and one of my first projects was to map out all the payments of the 30-year mortgage on our first house. The point where we would get the principal down to half was around the 24-year mark -- sickening when you see it. Hence wanting to pay that off all the sooner. After the divorce, my pay-off schedule was reset, but I accomplished it in about 12 years (not being married anymore, my expenses were much less). And since I had paid off our credit card debt with a consolidation loan over a decade earlier and instituted a policy of paying off the balance every month, after I paid off my car I have been debt-free.
My Social Security check covers almost all my expenses and my military retirement (reserves, so about 1/5th of a pension from active duty) covers "balloon payments" (eg, property tax, car and home insurance). I am about to take my first Required Minimum Disbursement (RMD) from my 401k, but there's nothing I need to spend it on. And I don't have to worry about medical expenses due to my military retirement benefits.
But on the matter of tax planning, my tax situation is simple and basic. However, working out withholding when I was married was tricky. We both made about the same amount (she a bit more at the time of the divorce), but the W-4 calculations were based on a single wage earner, so they always withheld too little especially when her income increased to approach mine. One year, we owed more than is allowed, so something had to change.
My solution was the only ingenious thing I did, or at least the only actual financial planning that I did. I created a spreadsheet to estimate this year's taxes based on last year's return and to estimate how much we needed to withhold based on that estimate. Once I knew how much we would be short, I submitted a W-4 with that amount added as additional withholding. That worked out well and I continue to use a variant of it, now to also examine how my RMD will affect this year's taxes (basically, it increases my taxable income to nearly double the RMD, since it makes more of my Social Security taxable). BTW, my goal was to come as close as possible to just barely covering our taxes, since that big refund others look forward to is just our money that the government has had and been using interest-free.
It was because of that spreadsheet that I was able to avoid GHW Bush's nasty trick.

This message is a reply to:
 Message 323 by Tanypteryx, posted 03-07-2024 7:06 PM Tanypteryx has replied

Replies to this message:
 Message 336 by Percy, posted 03-07-2024 8:30 PM dwise1 has not replied
 Message 337 by Tanypteryx, posted 03-07-2024 8:35 PM dwise1 has not replied

  
Tanypteryx
Member
Posts: 4555
From: Oregon, USA
Joined: 08-27-2006
Member Rating: 4.0


(3)
Message 333 of 352 (916630)
03-07-2024 8:13 PM
Reply to: Message 330 by Percy
03-07-2024 8:02 PM


Re: The Problem With Excessive Government
Also, the IRS is way understaffed. I always underpay, TurboTax always insists I have to file quarterlies next year, I always ignore it, and I never hear a peep from the IRS. One year I underpaid by around 30%.
Yeah, our FFO would never agree to that. Finances, investing, taxes etc. is her hobby, she works on her spreadsheets every day. We have never seen taxes as a burden, but rather as the price of civilization. We have always thought of it as our way of telling Ronald Reagan to "Go Fuck Himself!"

Stop Tzar Vladimir the Condemned!
What if Eleanor Roosevelt had wings? -- Monty Python
One important characteristic of a theory is that it has survived repeated attempts to falsify it. Contrary to your understanding, all available evidence confirms it. --Subbie
If evolution is shown to be false, it will be at the hands of things that are true, not made up. --Percy
The reason that we have the scientific method is because common sense isn't reliable. -- Taq
Why should anyone debate someone who doesn't know the subject? -- AZPaul3

This message is a reply to:
 Message 330 by Percy, posted 03-07-2024 8:02 PM Percy has replied

Replies to this message:
 Message 339 by Percy, posted 03-07-2024 8:44 PM Tanypteryx has seen this message but not replied

  
Percy
Member
Posts: 22676
From: New Hampshire
Joined: 12-23-2000
Member Rating: 3.6


Message 334 of 352 (916631)
03-07-2024 8:16 PM
Reply to: Message 329 by Omnivorous
03-07-2024 7:59 PM


Re: The Problem With Excessive Government
Omnivorous in Message 329 writes:
We did that. Now we're rolling over as much of that tax deferred money as we can each year into a Roth account, again with mutual funds. If we don't, in later years ALL our minimum required distributions will fall into a higher tax bracket.
But don't you have to pay taxes on the rollover from a 401k/IRA into a Roth? In the higher tax brackets, since the rollover adds to the normal 401k/IRA withdrawals?
--Percy

This message is a reply to:
 Message 329 by Omnivorous, posted 03-07-2024 7:59 PM Omnivorous has replied

Replies to this message:
 Message 335 by Omnivorous, posted 03-07-2024 8:23 PM Percy has not replied

  
Omnivorous
Member
Posts: 4001
From: Adirondackia
Joined: 07-21-2005
Member Rating: 3.4


Message 335 of 352 (916632)
03-07-2024 8:23 PM
Reply to: Message 334 by Percy
03-07-2024 8:16 PM


Re: The Problem With Excessive Government
We have a marginal rate gap between our current income and her age of minimum distributions at 72 (she's 60 now). Her SS at 70 will also erase that gap. We have to pay taxes on each partial rollover when we file the following year, but our retirement income will never be lower, and one expects tax rates to rise...

"If you can keep your head while those around you are losing theirs, you can collect a lot of heads."

Homo sum, humani nihil a me alienum puto.
-Terence


This message is a reply to:
 Message 334 by Percy, posted 03-07-2024 8:16 PM Percy has not replied

  
Percy
Member
Posts: 22676
From: New Hampshire
Joined: 12-23-2000
Member Rating: 3.6


Message 336 of 352 (916633)
03-07-2024 8:30 PM
Reply to: Message 332 by dwise1
03-07-2024 8:10 PM


Re: The Problem With Excessive Government
dwise1 in Message 332 writes:
I am about to take my first Required Minimum Disbursement (RMD) from my 401k...
...
...also examine how my RMD will affect this year's taxes (basically, it increases my taxable income to nearly double the RMD...
Yeah, we're going to have similar issues when we're both past the RMD age. Depending upon income the Medicare penalty can also come into play.
--Percy

This message is a reply to:
 Message 332 by dwise1, posted 03-07-2024 8:10 PM dwise1 has not replied

  
Tanypteryx
Member
Posts: 4555
From: Oregon, USA
Joined: 08-27-2006
Member Rating: 4.0


(2)
Message 337 of 352 (916634)
03-07-2024 8:35 PM
Reply to: Message 332 by dwise1
03-07-2024 8:10 PM


Re: The Problem With Excessive Government
Paying off those big debts early was our strategy too, mortgage, vehicles, and student loans were the biggies, but we built up some credit card debt in the '80s. Once the mortgage was paid off the rest went pretty fast. I shudder when I hear how few boomers have enough savings (or any) to support more than subsistence living. I see them working minimum wage jobs into their 80s. America is a pretty crappy place to live if you are poor and elderly, or physically cannot work.

Stop Tzar Vladimir the Condemned!
What if Eleanor Roosevelt had wings? -- Monty Python
One important characteristic of a theory is that it has survived repeated attempts to falsify it. Contrary to your understanding, all available evidence confirms it. --Subbie
If evolution is shown to be false, it will be at the hands of things that are true, not made up. --Percy
The reason that we have the scientific method is because common sense isn't reliable. -- Taq
Why should anyone debate someone who doesn't know the subject? -- AZPaul3

This message is a reply to:
 Message 332 by dwise1, posted 03-07-2024 8:10 PM dwise1 has not replied

Replies to this message:
 Message 341 by Theodoric, posted 03-07-2024 9:13 PM Tanypteryx has seen this message but not replied

  
Theodoric
Member
Posts: 9341
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 2.4


(1)
Message 338 of 352 (916635)
03-07-2024 8:40 PM
Reply to: Message 329 by Omnivorous
03-07-2024 7:59 PM


Re: The Problem With Excessive Government
This is why we have a financial advisor. All of our stuff, except for my wife's 403B, is in one place. He determines what we should put into tax deferred and what we should put in post tax. Emotion is out of the equation. We pay well for the advice, but it has been well worth it. We may not be getting the highest returns when the market is going up, but we don't take the biggest losses when the market goes down.

What can be asserted without evidence can also be dismissed without evidence. -Christopher Hitchens

Facts don't lie or have an agenda. Facts are just facts

"God did it" is not an argument. It is an excuse for intellectual laziness.

If your viewpoint has merits and facts to back it up why would you have to lie?


This message is a reply to:
 Message 329 by Omnivorous, posted 03-07-2024 7:59 PM Omnivorous has replied

Replies to this message:
 Message 340 by Omnivorous, posted 03-07-2024 8:48 PM Theodoric has replied

  
Percy
Member
Posts: 22676
From: New Hampshire
Joined: 12-23-2000
Member Rating: 3.6


(3)
Message 339 of 352 (916636)
03-07-2024 8:44 PM
Reply to: Message 333 by Tanypteryx
03-07-2024 8:13 PM


Re: The Problem With Excessive Government
Tanypteryx in Message 333 writes:
Yeah, our FFO would never agree to that.
Our FFO is lazy.
Funny story, I'll keep it short. Part of my work time every year was out of state, and that time wasn't taxable by the state. I tracked the hours, but the form calculations were arduous, so I did an approximation in the state's favor. I estimated that it cost around $50-100 a year, but by the time I'd completed the federal and begun work on the state I just wanted it to be over.
The state caught me after about five years and insisted I had been underpaying my taxes and was liable for taxes and penalties. I explained until I was blue in the face that my approximation was in their favor, but they would have none of it. I had to refile accurately for all five years, and it turned out that I had been underestimating how much the approximation cost. The state ended up refunding me something a little north of $1000.
--Percy

This message is a reply to:
 Message 333 by Tanypteryx, posted 03-07-2024 8:13 PM Tanypteryx has seen this message but not replied

  
Omnivorous
Member
Posts: 4001
From: Adirondackia
Joined: 07-21-2005
Member Rating: 3.4


(1)
Message 340 of 352 (916637)
03-07-2024 8:48 PM
Reply to: Message 338 by Theodoric
03-07-2024 8:40 PM


Re: The Problem With Excessive Government
It's always good to get professional tax and investment advice. We developed our own plan, but had it vetted by a pro, who used a complex spreadsheet to measure outcomes and confirm our calculations.
A determined layman can do pretty well. The strategies are simple in principle, if gnarly in application.

"If you can keep your head while those around you are losing theirs, you can collect a lot of heads."

Homo sum, humani nihil a me alienum puto.
-Terence


This message is a reply to:
 Message 338 by Theodoric, posted 03-07-2024 8:40 PM Theodoric has replied

Replies to this message:
 Message 342 by Theodoric, posted 03-07-2024 9:22 PM Omnivorous has not replied

  
Theodoric
Member
Posts: 9341
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 2.4


(3)
Message 341 of 352 (916638)
03-07-2024 9:13 PM
Reply to: Message 337 by Tanypteryx
03-07-2024 8:35 PM


Re: The Problem With Excessive Government
When I met my wife I was 40 and she was in medical school. I had just paid off a bunch of debt from a divorce and though I still owed on a house. It was 2004 and the housing market was booming. Walked away with $80k when I sold it.
When my wife graduated from Med School she had about $150k in debt. We were able to consolidate that at 3.25%. She finished med school in 2004 and we started paying right away instead of deferring. When she took her current position she qualified for loan forgiveness. The loans got paid off in 2000.
I will be honest. She makes good money. The lowest on the doctor scale as she is family practice working for a community health center, but up here you can live a sweet life on $200k. We have always maxed her 403B's, paid cars within 2 years and should have house paid off in 8(to match her retirement). She will have medical insurance costs as she will be 55, but we have that accounted for.
We have a nice house. It is the home she grew up in. When we moved back here 10 years ago we had it remodeled so there is a living quarters for her mother. We decided early on that her retiring before I was dead was a priority.
It is all choices. We drive newer cars. We buy them 1-3 years old and get great deals. Hers is a 2018 Subaru Legacy. I have a big 2019 Dodge Durango, but that is because we have a travel trailer so I needed something big enough to tow and haul the family.
We travel a bit. But the key is we pay for everything up front. We do not carry credit card debt. If we can not pay for it we don't do it. Our 20th anniversary is this year. We are going on a Viking River cruise on The Rhine.It is not cheap, but it is not ridiculously expensive. We have been planning this for 4 years. I have been putting extra toward our investments. When I booked, I booked it through Delta Vacations because I got 2 miles for every dollar spent, then I got another 2 miles for every dollar because I put it on my Delta American Express. I then had my financial guy move enough money into my bank account to pay for it. When we go in August, we won't worry about the money we spend because everything else will have been paid off months before.
I try to tell my young friends to start planning early. I did not, but I married well and it got me out of a potential issue. Resist going into debt to do fun things. If you can't pay up front for that vacation all your friends are putting on their credit cards, don't go. Don't take out a 6 year loan for your car. Do you need that house that is $75-$150k more?
Debt is not necessarily a bad thing. Make sure it is smart debt.

What can be asserted without evidence can also be dismissed without evidence. -Christopher Hitchens

Facts don't lie or have an agenda. Facts are just facts

"God did it" is not an argument. It is an excuse for intellectual laziness.

If your viewpoint has merits and facts to back it up why would you have to lie?


This message is a reply to:
 Message 337 by Tanypteryx, posted 03-07-2024 8:35 PM Tanypteryx has seen this message but not replied

Replies to this message:
 Message 344 by Percy, posted 03-08-2024 10:20 AM Theodoric has replied

  
Theodoric
Member
Posts: 9341
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 2.4


(2)
Message 342 of 352 (916639)
03-07-2024 9:22 PM
Reply to: Message 340 by Omnivorous
03-07-2024 8:48 PM


Re: The Problem With Excessive Government
When it all goes to hell I want my wife to have someone other than me to blame. It is worth the cost.

What can be asserted without evidence can also be dismissed without evidence. -Christopher Hitchens

Facts don't lie or have an agenda. Facts are just facts

"God did it" is not an argument. It is an excuse for intellectual laziness.

If your viewpoint has merits and facts to back it up why would you have to lie?


This message is a reply to:
 Message 340 by Omnivorous, posted 03-07-2024 8:48 PM Omnivorous has not replied

  
Phat
Member
Posts: 18419
From: Denver,Colorado USA
Joined: 12-30-2003


Message 343 of 352 (916640)
03-08-2024 2:08 AM
Reply to: Message 327 by Percy
03-07-2024 7:27 PM


Re: A Rabbit Trail About Gambling and Addiction
Percy writes:
Inflamatory YouTube videos. Gambling. Conspiracy theories. You're an adrenaline junkie.
Likely so. I've had addictions all or most of my life. You always bemoan my YouTube habit, but I don't just fall for any con. Sproul is a good example. I have listened to a lot of preachers, Pastors and teachers, and Sproul is one of only a handful who impress me to any degree. Critics may scoff and say that my religion lacks evidence and thus they don't even go so far as to accept the premise, but I was never coerced into accepting the premise. One could say that the premise(promise) found me and that His name was Jesus. As I have said before, I rarely attend church.
Gambling was a dopamine pump. The more I did it the more I had to do it more often until I won. That itself was a logical fallacy. Rarely would I be ahead for a week, but when I was I spent the surplus on groceries and essentials. Only later when I stopped the action and took inventory did I realize that it was a con. The feeling of the possibility of winning (getting blessed) was so overwhelming and felt so good. I was entitled or so I thought. Not winning was simply not fair.
As far as conspiracy theories, I reject most of them. The ones I consider have the devil in the details.

This message is a reply to:
 Message 327 by Percy, posted 03-07-2024 7:27 PM Percy has replied

Replies to this message:
 Message 345 by Percy, posted 03-08-2024 10:23 AM Phat has seen this message but not replied
 Message 346 by Theodoric, posted 03-08-2024 12:06 PM Phat has replied

  
Percy
Member
Posts: 22676
From: New Hampshire
Joined: 12-23-2000
Member Rating: 3.6


(1)
Message 344 of 352 (916647)
03-08-2024 10:20 AM
Reply to: Message 341 by Theodoric
03-07-2024 9:13 PM


Re: The Problem With Excessive Government
Theodoric writes:
Our 20th anniversary is this year. We are going on a Viking River cruise on The Rhine.
40th this year, Viking Cruise on the Danube in June.
--Percy

This message is a reply to:
 Message 341 by Theodoric, posted 03-07-2024 9:13 PM Theodoric has replied

Replies to this message:
 Message 347 by Theodoric, posted 03-08-2024 2:11 PM Percy has seen this message but not replied

  
Percy
Member
Posts: 22676
From: New Hampshire
Joined: 12-23-2000
Member Rating: 3.6


Message 345 of 352 (916648)
03-08-2024 10:23 AM
Reply to: Message 343 by Phat
03-08-2024 2:08 AM


Re: A Rabbit Trail About Gambling and Addiction
Phat in Message 343 writes:
...but I don't just fall for any con.
You shouldn't fall for any con. Just stop.
--Percy

This message is a reply to:
 Message 343 by Phat, posted 03-08-2024 2:08 AM Phat has seen this message but not replied

  
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