jIM wrote:
- quote -

Assuming a 72(t) solution to get your money out exists (see my reply to
Joe), and just looking at after-tax return (i.e. ignoring your needs for
an emergency fund or whatever), 18 years makes it easier, but not easy,
to be tax efficient enough to beat a 401(k). Your efficiency would have
still have to be pretty darn good, but it might be doable. But you'd
have to remember that you won't drain your entire account immediately
upon retirement, so some of it will be in your accounts for 30 years.
So some tax allocation would be in order (i.e. maybe put some in taxable
accounts and the rest in tax-advantaged accounts).

-Will

william dot trice at ngc dot com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Sep 3, 1:01*pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

Several points on this-

Both spouses work. I make more than wife, but she will have higher
earning potential than me. She does not intend to retire in 18 years.

If mortgage is paid off in 18 years, the need for my paycheck drops
considerably (my paycheck covers mortgage, both Roths, and about $400/
month towards utilitities).

We have some car debt retiring in 2009 and 2010, when that happens I
could realistically see my paycheck being 2/3 savings and 1/3
mortgage.

Suggestions on what to "plan" for? I have been advised long range tax
planning is not a good idea. Meaning paying 15% tax now and using
taxable accounts not wise because the tax rates on dividends and
capital gains change as often as politicians need them to change.

That being said, I have also been advised that 72t provisions and
rules change almost as often. Is 72t a reliable rule to plan with?

I think I could get by on 20k per year from age 53 to age ~66 (when
wife would retire)- meaning if I had 250k in cash, I think I could
make it last- my expenses would not be high- I just don't like
working.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

jIM wrote:

- quote -

53 opens up a couple issues:
To take withdrawals from one's 401(k) and not pay penalty, you need to
separate from your employer at 55. Otherwise, it's 59-1/2 unless you
elect sec72(t).
This points to having some Roth money or non-retirement account funds to
bridge that gap.

Joe

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Sep 3, 12:14*am, Will Trice <n...[at]monitored.net> wrote:
- quote -

If I said retirement at age 53 is the goal (18 years away) would that
change the comment?

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

jIM wrote:

- quote -

Since you have something like 30 years to retirement, you would have to
be extremely tax efficient to beat the 401(k) with a taxable account.
More efficient than paying today's favorable long-term capital gains tax
rate even just once. This depends on a lot of factors like the length
of time of investment, projected annual returns, projected tax rates,
and account fees, but the time period I think you're looking at really
favors the tax advantaged accounts.

-Will

william dot trice at ngc dot com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Aug 31, 1:43*pm, jIM <noreplysoc...[at]hotmail.com> wrote:
- quote -

I meant that the secondary EF could have stocks or ETFs which would
mean a more aggressive investment.

--
Ron

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"jIM" <noreplysoccer[at]hotmail.com> wrote
On fund choices for a taxable account
- quote -

I am afraid I cannot comment meaningfully, since investing
in a stock mutual fund for the short term (such as 3-10
years) is not one that makes sense to me. I would not know
how to weigh the pros and cons of PRPFX vs. like funds in
this instance. No disrespect intended.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

- quote -

started by me, which some suggested I am approaching AMT territory.

- quote -

a better suggestion for funds with a 3-10 year time horizon (new cars,
house improvements, large vacations). This fund is where we park
money for intermediate term expenses and use as a backup EF. I expect
PRPFX to beat cash return each year... and I think it does that.

I see 37% turnover- that is relatively low to me. Maybe an index fund
is lower, but considering what PRPFX holds, I consider it highly tax
efficient. Gold and Silver do not pay dividends.

Yield is 0.42%
last dividend was $.34 per share (on a NAV of 35.86).

Based on prospectus it is managed to be tax efficient (and I pay a
premium for that management- fund is more expensive than I prefer).

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Aug 31, 11:05*am, Ron Peterson <r...[at]shell.core.com> wrote:
- quote -

Definitely a 2 year goal is to increase this. I'd prefer to invest
more aggressively for now and slowly build up the EF.
- quote -

Bought a 352k home at height of bubble and own about 10% of that right
now. I doubt house would sell for 352k now.

- quote -

thx

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Aug 31, 6:27*am, jIM <noreplysoc...[at]hotmail.com> wrote:

- quote -

I think that you need more taxable investments to serve as a secondary
EF.

Do you have any home equity? If not, are you considering buying a
home?

- quote -

That's good.

--
Ron

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"jIM" <noreplysoccer[at]hotmail.com> wrote
Re future tax rates and contributing only up to 401(k)
matching--
- quote -

Then for at least this year, to me it makes sense to
consider contributing only up to the matches and saving the
rest in taxable accounts. Thus you would pay tax at the 15%
rate on most of your income. If you hit the 25% bracket due
to putting less in your 401(k), then remember it is only the
dollars over the 15% bracket that are taxed at the 25% rate.
Specifically, at most, around $5000 would not go into your
401(k) this year, upping your federal AGI to around $68k.
For 2008, the federal MFJ 25% rate applies to the excess
over $65,100. So at most, around $3k will get taxed at 25%.
You would be paying maybe an extra $300 (= (25%-15%)*3000)
on federal this year due to just crossing over into 25%
territory. The state tax is not much.

- quote -


Naturally aim for more tax efficient vehicles for the
taxable retirement savings. Yahoo suggests PRPFX has a 37%
or so turnover, so it is not what I would call tax
efficient. Remember the special treatment long term capital
gains and qualified dividends get for 2008 (and 2009, knock
on wood)

Assumption: I personally think tax rates will be quite a bit
higher by the time you retire.

You are a regular here with plenty of insight yourself, so I
imagine you are aware of these notions and are merely doing
a double check on your analysis with other MIFP etc. folks.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Aug 30, 8:32*pm, "Elle" <honda.lion...[at]gmail.com> wrote:
- quote -

Both 401ks at least meet the match.

My match is 66% of first 6% I think (might be 50% of first 6%). I
contribute 11%.
Wifes match is 100% of first 4% and 50% of next 2% I think. She
contributes 6%.

Both Roths are maxed
Have EF of 12k (3 months expenses)
have additional taxable investments of 1k in PRPFX, looking to
increase this to 12k within 2 years as secondary EF.

age 35/34 ~200k in retirement accounts.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"jIM" <noreplysoccer[at]hotmail.com> wrote
- quote -

What are the matching terms, if any, on the 401(k)?

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

jIM wrote:

- quote -

Your governor suggested a 4.2% overall decrease from 2007 to 2008.

Given the minor changes in Federal, the slight increase in exemptions,
and bracket changes, why not just use the 2007 turbotax to start your
forcasting?

I agree your goal should be to top the 15% bracket, then go Roth.
Getting it dead on is tough, but within $1000 is a worthy goal.

Joe
www.blog.joetaxpayer.com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

On Aug 29, 8:25*pm, jIM <noreplysoc...[at]hotmail.com> wrote:

- quote -

http://www.retirementliving.com/RLstate3.html has some of the
information.

- quote -

There is a liability advantage to having your assets in retirement
accounts.

By moving your funds to a 401k, you can avoid state taxation by moving
to a low income tax state.

You will want to convert your 401k funds to Roth eventually.

--
Ron

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

I have been researching my personal income taxes. What I had in 2007,
what I will have in 2008, and some go forward issues.

Some questions and comments

2007
AGI 103k
taxable income 63k
federal tax owed $8700
8.4% effective tax
Ohio state tax owed $3800

**net- refund of $3000+ federal and owed state ~$300**
For last 3 years we get a larger federal refund each year and owe
state more and more each year. We have adjusted state withholdings
each year and it doesn't seem to work. Meaning we owe $120, so we
withhold $10 per month and next year we owe $240, so then we withhold
$20 per month extra and next year we still owe more than the $240 the
previous year.

2008- will add 2 dependants (kids)
income will drop slightly (one year thing- wife was on disability for
about 16 weeks). The raises we receive might offset this, not sure
yet. In June of 2008 wife adjusted withholdings so she has less
federal tax withheld and take home was increased. In 2009 this should
result in 0 federal refund.

Issue- I cannot find Ohio tax tables which look like the ones on
fairmark. First two pages of google search found nothing like these:
http://fairmark.com/refrence/index.htm
I found one site which would allow be to build my own spreadsheet for
the tables, but I am not sure if the information on the site is
current or accurate.

Anyone know of a good reference which shows state tax tables like
fairmark?

Second issue- taxable income is in 15% tax bracket (63k). 401ks are
NOT maxed. Roths ARE maxed. 40k of deductions coming from mortgage
and property taxes, plus some unreimbursed business expenses. Would
it make sense to not put money in 401k and leave extra investment
dollars in taxable accounts because paying 15% now is better than
paying 25% or more in retirement? Fine line because if I reduce 401k
contribution percentage for taxable accounts, I risk being put in 25%
bracket.

**aside- 20% of gross pay is set aside for retirement in Roths or
401ks, the question is maybe taxable accounts are better than 401k
provided we stay in 15% bracket**

Third- I am considering some 529 plans which give state tax deductions
but no federal tax deductions. Would the state tax deduction in any
affect my federal tax liability?

- quote -

think so (money would be taxed at federal level), but thought I would
ask.

Any comments welcome. Thank you.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.