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Post by Deleted on Feb 17, 2023 19:19:04 GMT
That’s what I would be talking about, it’s all in that publication. My chief concern is the puzzle I might leave my wife and kids to unravel. I should have it completely unraveled next year, maybe sorta. 🙏🏼🤞🏼 Going through an unravelling for the second time in the last few years, makes me painfully aware of that too! |
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Post by marpro on Feb 17, 2023 19:29:01 GMT
On the kids IRAs, I want to inform you my experience back in 1991-1995, when my son went to an Ivy League school. When the financial office figured the amount of scholarship to be awarded to the kid, this asset will be included, and I recall 25% of that asset was added to the personal contribution of that year. How do they know? They want the kid and his/her parents to submit the tax returns. That amount came from my pocket – essentially from my supplemental retirement account, paying taxes and penalty. So, be careful in what you do. Of course, I do not know the rules adopted by the schools now, but be aware of such pitfalls.
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Post by bobfl on Feb 17, 2023 19:29:29 GMT
It’s funny I always go for the highest tax bill possible each year after taking advantage of all legal loopholes* only available for the moneyed classes and despite the inconvenience of tax filing. *Publication 4012. www.irs.gov/pub/irs-pdf/p4012.pdf And that is: borrow to live on rather than take from IRAs. R48 Thank god we can live on SS, even with a huge Long Term Health Care insurance bill and a pricey Medicare supplement. Actually our biggest bills are insurance and property tax. And food. I wish we could get energy from the sun, like plants. Then no food bill except an occasional dose of fertilizer. |
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Post by steelpony10 on Feb 17, 2023 20:06:51 GMT
That’s what I would be talking about, it’s all in that publication. My chief concern is the puzzle I might leave my wife and kids to unravel. I should have it completely unraveled next year, maybe sorta. 🙏🏼🤞🏼 Going through an unravelling for the second time in the last few years, makes me painfully aware of that too! Well I’m trying to consolidate holdings in the name of “simplicity”. I know exactly what you mean. I had to slowly do the same thing with my parents’ financial life starting with their 3 savings and 2 checking accounts. Their reasoning, being depression era survivors, was in case a bank failed. |
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Post by Deleted on Feb 17, 2023 22:14:04 GMT
Going through an unravelling for the second time in the last few years, makes me painfully aware of that too! Well I’m trying to consolidate holdings in the name of “simplicity”. I know exactly what you mean. I had to slowly do the same thing with my parents’ financial life starting with their 3 savings and 2 checking accounts. Their reasoning, being depression era survivors, was in case a bank failed. Yes, understood. My wife asked me why Oppenheimer (MILs broker) was sending so many statements, as if they were at wasting money/paper. I explained that her mom didn't adapt to the concept of downloading PDFs to keep on file. It isn't just older folks though, who are subject to fears and out-of-date habits. |
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Post by retiredat48 on Feb 18, 2023 1:07:47 GMT
On the kids IRAs, I want to inform you my experience back in 1991-1995, when my son went to an Ivy League school. When the financial office figured the amount of scholarship to be awarded to the kid, this asset will be included, and I recall 25% of that asset was added to the personal contribution of that year. How do they know? They want the kid and his/her parents to submit the tax returns. That amount came from my pocket – essentially from my supplemental retirement account, paying taxes and penalty. So, be careful in what you do. Of course, I do not know the rules adopted by the schools now, but be aware of such pitfalls. Colleges now operate under ONE financial aid form (universal) per student. IRAs are NOT counted in any way towards your ability to pay...neither parent or student IRAs. They are the best place to have money . If your child earns income during the college schooling years, then it is counted. And a major portion of 529 college savings plans are counted. R48 |
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Post by retiredat48 on Feb 18, 2023 1:15:05 GMT
... IMO those who double paid, or otherwise paid off their mortgages early made a huge financial mistake. Of course some need this to better sleep at night. That comes first. Others watch their homes go way up in price combating inflation, and are somewhat assured their homes (I have three) are a decent hedge against said inflation. A decent storage of value. R48 IMO, it depends on the timeframe and what rates are doing, as well as risk investments. I had CDs mature at appx $100K in late 2009, when my mortgage was 5 3/8% and HELOCs were 4%. Risk-assets were iffy as heck, coming off the credit crisis. I couldn't get a decent rate on the CDs again, so I paid off my 5 3/8% mortgage with that $100K and another $50K from a no-cost HELOC. It wasn't money that I had earmarked for risk (I.e. -equities). It was like reinvesting the CDs at 5 3/8. Refinancing had costs, and I wasn't looking to do that again. The HELOC I then paid off entirely in less than a year. I wouldn't call that a "huge financial mistake", or even a small one. Any debt eliminated is the same as a FI investment, to my way of thinking. I DCA'd the monthly mortgage payment into equities by raising my 401K contribution substantially, among other things. And as you point out, not all things are about the numbers, some of us do not like debt. And instead of paying interest, to get a tax deduction, I pay none and get a big standard deduction anyhow. That is win/win. I consider my home as a portion of my FI allocations, though many would debate that thinking. Having a paid off home allows me to take additional risk elsewhere. As does having a vested pension and nice future SS payment. And I require less cash assets on-hand. Lots of ways to skin that feline. I never would take out a loan to buy risk assets. LOL - I have to resist the urge to pay off my two 0% interest loans, that I have presently. Of course, taking out a 3% 30-yr mortgage to the maximum amount, a few years back, would have been a great financial move. So, I do get the overall point. Fair enough, but I was not referring to mortgages of 14 or more years ago. Yes, the rates may not make sense to keep HELOCs then. But the last decade+ saw zero percent rates and mortgages getting to 3% or less. Anyone who didn't refinance missed out. And from a financial viewpoint, those who paid off such low-rate mortgages early in the last decade, have missed out also. Anecdote...my oldest daughter bought a $435,000 home in NC a few years back, refinanced downward once to about 3.5%, and now have a home valued at about $700,000. I advise they should never give up this mortgage unless rates fall again dramatically. R48 |
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