401(k)

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Let me explain Why, ways to save $2,220 a year. It’s a very specific number. For some reason a long dormant post of mine about the Myth of 401(k) Tax Breaks got revived and along with it, some very strong arguments for why I’m wrong. The premise of the post is that if you forego the tax break you get from your traditional 401(k) and instead opt for a Roth 401(k) or plain after-tax investment account, you’ll actually end up paying less taxes (assuming you get lousy or no matching and you live and stay in the 12% tax bracket, […]

Ways to Save $2,220 a Year

 in 401(k) / investing / Saving by
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There are several reasons for getting a 401(k). 401(k) tax breaks isn’t one of them. Over the last 3 years I have not had to pay federal taxes. This, because all my income is derived from capital gains and seeing as these barely put me past the 10% tax bracket, I owe 0% federal tax on these. This year preparing for taxes (2017) things look different. I started the Roth IRA conversion ladder, in the amount of $40,000. It’s a measure I have to take because my after-tax investment accounts will run dry, prior to my 401(k) withdrawal age of […]

The Myth of 401(k) Tax Breaks

 in 401(k) / investing / Taxes by
Earlier this year, I wrote about getting started on the Roth IRA conversion ladder. The first rung has been taken. This week, I completed the first of 7 conversions. For those of you not in the know, I have some money, but it’s in all the wrong places. I’m 47 years young, 3 years retired with a modest income from various investments. The problem is, that the bigger chunk of these investments are tied up in my 401(k) (Luxury problem, I admit). Based on today’s budget, five years prior to the age of 59 (and a half), my after tax […]

Roth IRA Conversion Ladder update

 in 401(k) / FIRE / retirement by
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I’ve put it off long enough now. I need to get started on the Roth IRA Conversion Ladder. It seems to be the only solution to my western world problem. The problem of having too much in my 401(k). The Roth IRA Conversion Ladder will allow me to gradually convert funds from my 401(k) to a Roth IRA, in turn, allowing me to withdraw WITHOUT PENALTY when I really need it. The catch: You need to start this at least 5 years prior to the first withdrawal. Is there such a thing as too much in a 401(k)? For most of […]

Roth IRA Conversion Ladder

 in 401(k) / FIRE / investing / retirement by
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In my last post I mentioned this was going to be a series. I’ve made a few Screw-ups on my way to a million. Today’s post is about investing emotionally. In other words, falling in love with your investments and the disastrous consequences associated to it. Different emotions in play It’s okay to get emotional when investing. When the stock is up I’m happy and when it’s down I get pissed. Can’t help it, it’s just another day on the job so to say. Investing emotionally isn’t okay, it can cloud your judgement. There are several ways in which you can get tied […]

Screw-ups on My Way to a Million: Investing Emotionally

 in 401(k) / investing / millionaire by
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You’ve probably heard it or seen it on a cheesy motivational poster: The road to success is paved with failure. I prefer to call them screw-ups as it seems to imply more of a duh!!-moment and lessons are learned. For two years now I’ve been writing about how I made my way to a million and how that eventually resulted in early retirement at 43. Today I’ll start a series that focuses on the screw-ups on my way to a million. We all know we learn from our mistakes (or at least should) so before you make yours maybe mine will make […]

Screw-ups up on My Way to a Million: Greed

 in 401(k) / investing / millionaire by