Investing General Discussion
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Mist
Eeyore Enthusiast
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We're still 6 more weeks until peakO dios mio. No rest forthis weekend. RIP in pieces.
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Burns
Avatar of War Slayer
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Go plug in your loan into a loan calculator and see how much you save by making a 100k payment today. Then, take the average return on SPY or QQQ over the last ~20 years and see where your 100k would be sitting in the next 10, 20, and 30 years (if the trend continues in the long term).
Next, if your loan is a 30 year, use the loan calculator to see how much you save by changing to a 15 or 10 year (it should be a rather large amount). It may be worth it to refi, invest the 100k in SPY/QQQ, and then push hard to make the larger payments, always knowing you have that 100k to fall back on, if you need a little help every now and then.
Finally, do both loan modifications in the loan calculator; take 100k off the principle, and then move it to a 10 or 15 year, and see how much you save vs just investing it.
P.S. Make sure to shop around if you chose to refi. Quicken Loans used to undercut everyone, just to get the business, but that was 10 years ago, so no idea who is the cheapest now days.
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nu_11
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Sanrith Descartes
Von Clippowicz
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Furry
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Question about how much you are allowed to contribute to a RothIRA each year. All I can see is you have to have "earned income" equal to the amount you want to contribute (up to the max, which is 6k or so). UNLESS you make way more than 100k and you slowly lose the ability to contribute anything.
Anyways lets say I made 20k at my job last year but put 100 percent of it into my job's 401k. My accountant (which is new and I don't fully trust) says I now have to withdraw some of that contribution because I put all my income into my jobs 401k.
But my reading of it was you just have to have had that earned income, does not matter what you did with it.
Anyone know?
Anyways lets say I made 20k at my job last year but put 100 percent of it into my job's 401k. My accountant (which is new and I don't fully trust) says I now have to withdraw some of that contribution because I put all my income into my jobs 401k.
But my reading of it was you just have to have had that earned income, does not matter what you did with it.
Anyone know?
Fogel
Mr. Poopybutthole
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If you contributed all of your earned income from last year to your 401k, where did you get the money for the IRA? If it was earned in another year I can't see that being an issue, and your accountant might be reading things to literally.
Furry
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I think you are conflating different retirement vehicles with each other and mixing their rules up
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If the money was earned in another year, he's missed the contribution deadline.
I think, as you suggest, Locnar missed the fact that 401k contributions reduce your earned income. He wants to double dip, but it doesn't work like that.
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I know 401k reduce your AGI for tax purposes, but I thought not "earned income" which qualifies you to contribute into roths. So you have to make excess (that you DONT put into a traditional 401k) to qualify contributions into a roth in the same year?
No, and yes, respectively. AGI == "earned income". Any tax-advantaged savings you put aside reduces your pool available for simlar purposes. Alternatively stated, you must have a taxable income at least equal to the total of all 401k/roth/SEP/traditional IRA/HSA/etc. contributions (or at least the income that would have been taxable but for your contributions). Otherwise, you'd be claiming tax credits on more than all of your income in that year.
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Furry
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Sanrith Descartes
Von Clippowicz
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Just wanting to clarify something since I am seeing terms like Roth and tax credits and stuff. A standard IRA is pre-tax money. A Roth is after tax money. You have the ability to donate to a regular IRA even if you don't qualify for the tax deduction on your 1040. Granted why would you since without the tax advantage it should go into the Roth so it comes out tax free.
And as for max income into 401k, then there has to be some earned income to go into the Roth. You can't take savings and put it in. And it can't be passive income.
Can I Contribute to an IRA With No Earned Income?
To contribute to an IRA, you must have earned income. Earned income includes wages, salaries, commissions, self-employment income and some other income. The max IRA contribution limit for 2019 is $6,000, and you can only contribute up to that amount if you make at least that amount in earned income.
finance.zacks.com
Can I contribute to Roth IRA, when all income went into 401k? I only worked part time for 3 months.
If I only worked for three months and put all income into 401K, minus what was required in taxes, can I still contribute to my Roth? If so, can I only contribute up to the amount of income that didn't go into the 401K? IE: Gross earnings = $7000.00 and all but $700.00 went into 401k, as the...
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Furry
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Yea, I don't understand why you'd use any other vehicle than the Roth if you made less than standard deductible and qualified for it. I've posted before my plan is to rollover my standard deductible from 401k into the Roth on years I'll have no income in Retirement just because it's tax free.Just wanting to clarify something since I am seeing terms like Roth and tax credits and stuff. A standard IRA is pre-tax money. A Roth is after tax money. You have the ability to donate to a regular IRA even if you don't qualify for the tax deduction on your 1040. Granted why would you since without the tax advantage it should go into the Roth so it comes out tax free.
And as for max income into 401k, then there has to be some earned income to go into the Roth. You can't take savings and put it in. And it can't be passive income.
Can I Contribute to an IRA With No Earned Income?
To contribute to an IRA, you must have earned income. Earned income includes wages, salaries, commissions, self-employment income and some other income. The max IRA contribution limit for 2019 is $6,000, and you can only contribute up to that amount if you make at least that amount in earned income.
Can I contribute to Roth IRA, when all income went into 401k? I only worked part time for 3 months.
If I only worked for three months and put all income into 401K, minus what was required in taxes, can I still contribute to my Roth? If so, can I only contribute up to the amount of income that didn't go into the 401K? IE: Gross earnings = $7000.00 and all but $700.00 went into 401k, as the...ttlc.intuit.com
Not taking advantage of the tax free moves the standard deduction gives you every chance you have is silly.
Yeah, thanks. What I wrote was a bit sloppy.
All of this is why tax prep software exists.
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Sanrith Descartes
Von Clippowicz
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Yeah it's the real reason a CPA can charge so much. Knowing and keeping up with thousands upon thousands of tax laws and changes is insane.