UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: jesserivera67 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75791  
Subject: Re: You don't need a 401k- Just tax management Date: 11/29/2003 10:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I come up with $684,847 with starting balance of $100,000, 8% growth over 25 years in an IRA or 401k...assuming no inflation and no expenses. An assumption of about 1.47% expenses would give me the $475k. I missing something here...

yobria said, "If the 100K goes into a taxable account, you lose $25,000 off the top, and pay a 25% tax on short term/interest gains the year you incur them. Person B makes such investments, and pays the regular tax rate on 75% of his gains each year. After 25 years, he winds up with $323,418."

how does this relate to the 401k/IRA? seems like apples & oranges. if one is to use a taxable investment as a retirement vehicle why would they be impacted by short term gains? They should be touching the investment correct? btw, why would they lose $25k off the top? If the $100k is coming from some savings account (I'm assuming here...) why the "$25k off the top"? Taxes would have most likely already been paid on the $100k right? I can understand the taxes on any gains but not on the principal which I assume is the $100k.

I like the Person C example as many forget to include the fact that one can use a loss harvesting strategy to limit their losses and get a little something back from Uncle Sam...

I agree with your conclusion but can't seem to reconcile the calculations from your assumptions...Not sure what pieces I'm missing.





Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Smuggling Rice and Garlic
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement