Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: jpato Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Pre vs Post Tax & LTBH Date: 6/1/2000 12:58 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Please excuse this post if it has been discussed in earlier posts, after a quick scan a some of the 401k posts, I only have more questions. Anyway,

Seems the conventional wisdom is pretax into company 401K plan. Pay the tax later.

Does the withdrawl of the funds get paid at the future tax rate (e.g.year 2030) or the rate at contribution (year 2000)? From what I've read, yes future rate but can be (at this time) average over ten years.

Would it be better to pay a lesser tax rate now than later or does the effect of reducing the Adjusted Gross Income each year win out over the long haul? Is it equal? Of course I am assuming taxes will rise. Not sure why :->

Does the future withdrawl affect the tax bracket at time of withdrawl? Again, from other posts I think it does but am I correct to say that the withdrawl can be limited (non lump sum) to an amount that leaves the AGI less than the higher tax bracket?

Just thought of this, suppose one holds company stock long term, to a point of acquiring an amount that adjusts the income bracket up. How is the tax calculated on the the sale? I would guess at the time of sale not purchase.

Thanks for the patience, this started with a simple question.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
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