To Roth or not to Roth? - page 2. | Bitcointalksearch.org

silverbox

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Quote from: Math Man on May 16, 2012, 09:20:20 PM

Quote from: silverbox on May 16, 2012, 07:40:55 PM

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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.....

Rothgar

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Tune in to Neocash Radio

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.

kjlimo

legendary

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Quote from: BrightAnarchist on May 16, 2012, 09:28:03 PM

Quote from: Math Man on May 16, 2012, 09:20:20 PM

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.

Correct on all points. That is why I love the Roth IRA, especially with the new loopholes that let you put 55K/year into it by rolling from a SEP IRA into a Traditional, and then into a Roth.

However, that said - when was the last time the government kept a promise? I have doubts that the dollar is even going to be worth much of anything 40 years from now when I start drawing on my nest egg, or that the government won't decide to "dip in" to those tastey retirement accounts when it is hungry for more tax base as the economy continues to deteriorate.

Just look at what happened to the original idea of SS with the SS "trust" fund. Didn't take long for politicians to bleed it dry and turn it into the ponzi scheme that it is today.

Making a deal with the government is like making a deal with a devil. Sure, you'll save taxes, trust us... but we can change the rules however we wish as we go along...

Also some good points.

I am currently putting my money into a Roth 401(k) account that my employer offers. I expect to claim more money at retirement than I am currently claiming. I haven't completely analyzed when I expect that to change, perhaps somehwere in my thirties? But then I expect to have kids to deduct & I'll likely still have a mortgage payment.

It takes a bit of time to figure out which is best and at the end of the day there are a TON of assumptions that go into it, but it's worth having the discussion and there should be someone (such as myself - a retirement actuary) who can help you out. or a financial planner... just keep in mind, the analysis is only as good as the data and assumptions that go into it.

garbage in ... garbage out...

OH, and DON'T put all your eggs in one basket. Leave some retirement money not in bitcoins. We never know when all of us will get distracted by big shiney objects and stop buying bitcoins...

good luck, happy investing.

BrightAnarchist

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Quote from: Math Man on May 16, 2012, 09:20:20 PM

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.

Correct on all points. That is why I love the Roth IRA, especially with the new loopholes that let you put 55K/year into it by rolling from a SEP IRA into a Traditional, and then into a Roth.

However, that said - when was the last time the government kept a promise? I have doubts that the dollar is even going to be worth much of anything 40 years from now when I start drawing on my nest egg, or that the government won't decide to "dip in" to those tastey retirement accounts when it is hungry for more tax base as the economy continues to deteriorate.

Just look at what happened to the original idea of SS with the SS "trust" fund. Didn't take long for politicians to bleed it dry and turn it into the ponzi scheme that it is today.

Making a deal with the government is like making a deal with a devil. Sure, you'll save taxes, trust us... but we can change the rules however we wish as we go along...

BrightAnarchist

donator

Activity: 853

Merit: 1000

Quote from: FreeMoney on May 16, 2012, 08:06:07 PM

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Right, this is my sense as well: peak government. Many people much smarter than me have postulated that the end of the US as a superpower is neigh. And if we get a monetary reboot, whether through hyper-deflation or hyper-inflation ( or both in that order, at least that I what I am expecting ), then who knows what could happen.

Honestly I trust Bitcoin more than the dollar in many ways, mainly the fact that it's a real asset that is not someone else's liability ( or in someone else's control ). Also, I have been sued before, and I don't want to have to worry about my assets being taken by lawyers; I have read too many horror stories.

notme

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Activity: 1904

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Quote from: Math Man on May 16, 2012, 09:20:20 PM

Quote from: silverbox on May 16, 2012, 07:40:55 PM

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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.

Bingo.

Math Man

full member

Activity: 150

Merit: 100

Quote from: silverbox on May 16, 2012, 07:40:55 PM

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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.

BrightAnarchist

donator

Activity: 853

Merit: 1000

Quote from: notme on May 16, 2012, 08:16:28 PM

Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment. Sure, I might never get the money back, but it sure is growing fast Wink

.

I am also short

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

Quote from: notme on May 16, 2012, 08:16:28 PM

Quote from: FreeMoney on May 16, 2012, 08:06:07 PM

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment. Sure, I might never get the money back, but it sure is growing fast Wink

.

Ha, around the time I closed mine out it was unclear whether shorting would get you sent to Gitmo or not.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: FreeMoney on May 16, 2012, 08:06:07 PM

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment. Sure, I might never get the money back, but it sure is growing fast Wink

.

FreeMoney

legendary

Activity: 1246

Merit: 1016

Strength in numbers

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: silverbox on May 16, 2012, 07:40:55 PM

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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...

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?

silverbox

legendary

Activity: 966

Merit: 1003

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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...

tvbcof

legendary

Activity: 4760

Merit: 1283

Quote from: BrightAnarchist on May 16, 2012, 06:47:41 PM

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... )

I personally have had zero interest in IRAs going back as far as 2000 (when I first had to start thinking about them.) I don't remember the reason, but I suppose it had something to do with not trusting that the regulators of our financial markets were really on my side and I expected these pots of money to be far to tempting to those who had the means to dip into them. A few years after that I started doing most of my saving in the form of physical PMs had have never looked back.

When the Bitcoin bug slammed into my windshield I took a position, but I have always considered it highly speculative.

I earnestly believe it quite likely that one of two things will happen:

1) Heavy-duty means testing. That is, if you make it to retirement age...which is scheduled to be bumped up into one's senile years...anything you get from an IRA will be subtracted from what you get from SS.

or 2) We'll be under an entirely different monetary system which somehow didn't seem to manage to tow IRA and SS pools along when it was implemented...maybe because they ended up being sludge pits when the covers were drawn back.

I may be wrong...I often am.

BrightAnarchist

donator

Activity: 853

Merit: 1000

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... )

Topic: To Roth or not to Roth? - page 2. (Read 5318 times)