Richard RE: <<It is hard to get money out before 59 1/2, and expensive after 59 1/2. >>
See the site I just posted today. It's really pretty easy, I hope, since I intend to do it this January.
<<Lower tax rates in retirement are not likely for those that save and invest for 20+ years. >>
Possibly true, but more than compensated for by the freedom of selling without tax consequences and the ability to leverage the amount of money that would have been taken out for taxes, for many years.
<<Once these accounts (IRAs, Rollover IRA from pensions, 401k, 403b) together approach or are projected to approach 500K +, you got a tax problem and an estate problem, IMO.>>
Why? I'm not familiar with why this would present a tax problem?
<<You can't take losses on misguided investments in these accounts.>>
True, but wouldn't you trade that for the ability to keep gains in your trading account tax-free until you withdrew the money?
<<You pay taxes at your income tax rate rather than the lower capital gains rate. So you convert long term gains into ordinary income.>>
True, but you control the amount you withdraw and spread the income over many years into the future, leveraging the gains and reducing the taxable percentage. In the worst of all worlds, you are so successful that you have tremendous income every year for the rest of your life and a corresponding tax burden. Don't forget that there are no payroll taxes, medicare taxes SS taxes etc on this income.
<<Unlike stocks in non-retirement accounts, there is no stepped up basis when transferred to your heirs.>>
So you only ruin one generation by making life too easy for them. (gg)
<<You can't use margin.>>
I have a pension and profit sharing plan that I trade with suretrade, online. I filled out their paperwork and can and do trade on margin. I cannot trade options, but I'm too ignorant to do that so it may be a good thing. Other than that drawback, it works for me. Ed |
