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Topic: To Roth or not to Roth? (Read 5318 times)

sr. member
Activity: 263
Merit: 250
January 06, 2014, 11:44:53 AM
#35
I thought about opening a IRA and then I found out you can only deposit a certain % of your reported income per year...I'll stick to my pile of BTCs the gov doesnt know about yet.

You only run into a problem when you eventually want to purchase something or exchange those bitcoins for dollars.  When the tax man comes sniffing around, you're going to really wish you'd thought about the consequences sooner.  You will probably wind up paying lots of capital gains taxes rather than risk jail time.

You can put $5500 (or $6500 if you're over 50) per year into a Roth, up to 100% of your taxable income.  If the price of bitcoin really explodes, you could someday save $100,000 in taxes. 
newbie
Activity: 13
Merit: 0
January 06, 2014, 12:25:25 AM
#34
I thought about opening a IRA and then I found out you can only deposit a certain % of your reported income per year...I'll stick to my pile of BTCs the gov doesnt know about yet.
donator
Activity: 686
Merit: 519
It's for the children!
January 05, 2014, 11:54:51 PM
#33
lol ok.  If your paying zero taxes, roth is the way to go..

I assumed you were at least making enuf to be paying taxes, lol.



This is America.  We can make mid six figures and pay -10% taxes as long as we obey US laws and have a damn good accountant.

It's the American way.
sr. member
Activity: 263
Merit: 250
January 05, 2014, 11:25:20 PM
#32
Get away from any investment that leaves you holding Federal Reserve Notes other than using them as wallpaper or fire starter.

That's one great thing about an IRA LLC.  The assets are denominated in bitcoins, and as manager of the LLC, you are responsible for their security.  You can keep the private keys wherever you want.  Makes it a bit harder for the government to confiscate.  
legendary
Activity: 3598
Merit: 2386
Viva Ut Vivas
January 05, 2014, 08:27:32 PM
#31
The Roth IRA will be taxed by the time you retire if the US is still a country. If the US is still a country your Roth will be denominated in worthless Federal Reserve Notes.

Get away from any investment that leaves you holding Federal Reserve Notes other than using them as wallpaper or fire starter.
legendary
Activity: 1762
Merit: 1011
January 05, 2014, 07:34:42 PM
#30
You're not allowed to withdraw contributions early from your Roth or you will pay a penalty, but you can take out gains at any time without penalty or even paying taxes on them.  There's a form you have to fill out on your federal taxes so the only downside to redeeming gains is a bit of paperwork.

I think you have that backward.  I thought you were allowed to withdraw contributions but not gains.  You already paid taxes on the contributions.

Yeah, you can withdraw contributions (the principal) at any time without penalty, but not gains:

http://www.mymoneyblog.com/can-i-really-withdraw-my-roth-ira-contributions-at-any-time-without-tax-or-penalty.html
cp1
hero member
Activity: 616
Merit: 500
Stop using branwallets
January 05, 2014, 07:12:32 PM
#29
Bringing back up an old thread... but time is taking its toll. I now am nearing the point where a very large % of my liquid assets are now in BTC. I didn't plan it this way exactly; it just happened. Probably because I'm a BTC addict and cannot stop buying them.

I guess at this point for diversity's sake I probably shouldn't keep buying them ( although it's hard not to ) and maintain my ol' stash of shitty treasury bills earning their 0.000000000000001% interest...

Ha, must be nice.  All in at $5/BTC
legendary
Activity: 1904
Merit: 1002
January 05, 2014, 07:03:34 PM
#28
You're not allowed to withdraw contributions early from your Roth or you will pay a penalty, but you can take out gains at any time without penalty or even paying taxes on them.  There's a form you have to fill out on your federal taxes so the only downside to redeeming gains is a bit of paperwork.

I think you have that backward.  I thought you were allowed to withdraw contributions but not gains.  You already paid taxes on the contributions.
sr. member
Activity: 304
Merit: 380
January 05, 2014, 06:47:00 PM
#27
You're not allowed to withdraw contributions early from your Roth or you will pay a penalty, but you can take out gains at any time without penalty or even paying taxes on them.  There's a form you have to fill out on your federal taxes so the only downside to redeeming gains is a bit of paperwork.
sr. member
Activity: 263
Merit: 250
January 05, 2014, 09:34:25 AM
#26
Most bitcoiners don't realize that your choices are not just Roth IRA versus Bitcoin, but that it is currently possible to hold bitcoins directly in a Roth IRA.  Anyone can set up a self-directed IRA, which invests in an IRA LLC that you manage, which invests directly in bitcoins.  You do not need SecondMarket or any other third party.

It does take some effort and expense to set it up, so it's probably not worth doing unless you have at least $10,000 to invest.  There are a bunch of idiotic rules you have to follow.  For example, you cannot transfer or sell personally-owned bitcoins to the IRA LLC.  It can only trade with unrelated third parties.

It also doesn't matter whether you're in a higher tax bracket now or when you retire.  The important thing is that, with a Roth IRA, as long as you carefully follow all the rules and don't withdraw until age 59 1/2, you don't have to pay taxes on the earnings.  So if you invest $10,000 of after-tax money now, and if Bitcoin goes up by a factor of 100, you can withdraw that $1 million without paying any capital gains taxes!

More info on self-directed IRA LLCs at https://bitcointalksearch.org/topic/how-and-why-to-hold-bitcoins-in-your-roth-ira-yes-you-can-do-it-today-396783
donator
Activity: 853
Merit: 1000
July 05, 2012, 11:13:08 PM
#25
Bringing back up an old thread... but time is taking its toll. I now am nearing the point where a very large % of my liquid assets are now in BTC. I didn't plan it this way exactly; it just happened. Probably because I'm a BTC addict and cannot stop buying them.

I guess at this point for diversity's sake I probably shouldn't keep buying them ( although it's hard not to ) and maintain my ol' stash of shitty treasury bills earning their 0.000000000000001% interest...
legendary
Activity: 1246
Merit: 1016
Strength in numbers
May 18, 2012, 08:12:44 PM
#24
Some pretty heavy shit would have to be going to for them to confiscate IRAs or gold. But when they want to confiscate IRAs it will be 100% success, no chance to keep it. When they want gold it'll pretty much be people turning it in voluntarily for some kind of payment.
legendary
Activity: 4760
Merit: 1283
May 18, 2012, 05:36:04 PM
#23
If you're under 50 I would suggest no Roth.  I look at Argentina and actually think that could happen in the US.  When they run out of money they'll be looking to take it from somewhere.

Don't put all your eggs in one basket.  Gold is cheap now.  

They will confiscate the gold before they do the Roths.

The 'barrier to entry' for confiscating physical gold is much higher than appropriating some data on some computer.  And I can donate my gold to entities who I believe are worthy if I see that coming.

I suspect that a great number of pensions have already been confiscated (and I don't buy the party line that pension fund managers are clueless boobs who didn't know what crap the MBSs were.)  The main thing left now is how to break it to the (would-be) pensioners that they are looking at some cold winters in their waning years.

legendary
Activity: 966
Merit: 1003
May 18, 2012, 05:34:40 PM
#22
If you're under 50 I would suggest no Roth.  I look at Argentina and actually think that could happen in the US.  When they run out of money they'll be looking to take it from somewhere.

Don't put all your eggs in one basket.  Gold is cheap now.  

They will confiscate the gold before they do the Roths.

Harder to hide your IRA then your gold Wink
hero member
Activity: 532
Merit: 500
May 18, 2012, 05:27:28 PM
#21
If you're under 50 I would suggest no Roth.  I look at Argentina and actually think that could happen in the US.  When they run out of money they'll be looking to take it from somewhere.

Don't put all your eggs in one basket.  Gold is cheap now.  

They will confiscate the gold before they do the Roths.
legendary
Activity: 1904
Merit: 1002
May 17, 2012, 12:23:24 PM
#20
I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...

When did I quote your reply?  or address it in any way?  Till post #17

Sorry I didn't address your special case making so little you don't pay any taxes at all, usually if your so poor you have near zero income you don't put money in an IRA, you buy FOOD.

I grow a lot of my food.  I'm not hungry.  I make plenty on an hourly basis, but I spend more time with friends and family than most people.  I also prefer to not support the fuckers that use other people's money to kill poor people in other countries so they can steal their resources.  I don't have a lot of extra money, but I'm by no means poor.  My low income is a conscious choice.  I have no desire to compete with others to see who can accumulate the most material goods.

As for my "special case", it would also apply to those who are in the lowest tax bracket, which is a lot of people.  Like I said, there is crossover point, but many young people aren't even close to it.  Hell, less than 30% of people in my age range are able to find work in the area they are trained.  Many are working fast food or retail because that's all that's available.

But, you keep fueling this fire-cult called America.  Eventually, all you'll have left is ashes.
legendary
Activity: 966
Merit: 1003
May 17, 2012, 12:09:06 PM
#19
I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...

When did I quote your reply?  or address it in any way?  Till post #17

Sorry I didn't address your special case making so little you don't pay any taxes at all, usually if your so poor you have near zero income you don't put money in an IRA, you buy FOOD.
legendary
Activity: 1904
Merit: 1002
May 17, 2012, 11:59:39 AM
#18
I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...
legendary
Activity: 966
Merit: 1003
May 17, 2012, 11:51:53 AM
#17
lol ok.  If your paying zero taxes, roth is the way to go..

I assumed you were at least making enuf to be paying taxes, lol.

legendary
Activity: 1904
Merit: 1002
May 17, 2012, 11:40:09 AM
#16
Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



Your information on a Roth is wrong.  The tax savings of a Roth has nothing to do with the account value or making over 6 figures. 

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

With a Roth your betting that your post retirement tax bracket will be higher then the your pre retirement tax bracket.  Unless you have a big fat amount in your IRA, your post retirement tax bracket will be LOWER then your pre retirement tax bracket.  So unless your making alot of money to have a very large IRA you DO NOT want a Roth IRA. 

That theory of an advancing career is becoming more and more of a pipe dream in this economy.  Lots and lots of folks are losing their jobs and having to take lower paying ones. 

My information on Roth is entirely correct.  Lots of folks end up giving the government their taxes now at a higher rate then they would pay at retirement, because they just know they will have a perfect career and a big huge nest egg at retirement..... 



There is likely a crossover point where your point is valid, but while I'm young and paying 0 taxes, I'm going to put my retirement funds in a Roth.  If I ever start paying taxes above the minimum rate, I may look into other options.

Saying it's only good if you are making a lot of money is false.
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