Official Investing Thread

Discussion in 'The Mainboard' started by Joe Louis, Jul 12, 2010.

  1. Ty Webb

    Ty Webb Living rent free in Jigga's head
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    Right. It is simply a well known loophole to get money into a Roth account that has been around for some time now.
     
  2. Struggler

    Struggler Well-Known Member
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    Is there still a yearly maximum contribution for the Roth?
     
  3. momux

    momux AFAM Scholar
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    Yeah agreed. I think the original question can be reframed as “why is this allowed under the tax code?” which is a fair point given that the backdoor Roth is effectively a way to circumvent the income restrictions.
     
  4. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Yes, for a normal Roth IRA contribution. Not for the backdoor.
     
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  5. DrunkJester

    DrunkJester No longer drunk or funny.
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    I’m not sure what type of backdoor Roth we’re talking about here, but for the backdoor Roth where you contribute to a traditional IRA and then convert to a Roth IRA shortly after, your max annual contribution to the backdoor Roth is the max you can put into the traditional IRA (this year $6000 or $7000, depending on age). Of course, as far as I know there’s no limit to how much you can convert (e.g., if you have a traditional IRA that has a balance of $100,000, you can convert up to the entire balance to Roth after paying any applicable taxes). And then there’s the mega backdoor, which may increase the contribution limit to $56,000 for certain 401k plans. But otherwise, there’s a de facto annual contribution limit for backdoor Roth IRAs because you have to contribute to a traditional IRA first.

    Unless there’s something I’m missing, in which case I’d be very interested to learn because I’m a big fan of investing with no taxes on gains.
     
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  6. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    We were talking about mega backdoor
     
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  7. Ty Webb

    Ty Webb Living rent free in Jigga's head
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    upload_2019-8-8_16-38-30.jpeg
     
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  8. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

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  9. kinghill

    kinghill Cool American Flavour
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  10. PeterGriffin

    PeterGriffin Iced and/or sweet tea is for dirty rednecks.
    Florida State SeminolesPhoenix SunsTottenham HotspurAvengersSan Diego PadresBorussia MönchengladbachFormula 1

    You guys mentioned FLNT in here before. They had their earnings report yesterday and it was 50% above expectations. Can someone eli5 why it's down 34% today?
     
  11. NothingIsOT

    NothingIsOT Prom pic
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  12. Gallant Knight

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    Arkansas RazorbacksHouston AstrosRice OwlsAston Villa

    Down 5% today. The 7s are up 35% today and the 6s are flat

    :|
     
  13. Gallant Knight

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    go ahead and get under 7.00 for daddy
     
  14. Taques

    Taques sometimes maybe good sometimes maybe shit
    Staff Donor TMB OG
    The Real Movement

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  15. Gallant Knight

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    We work files for IPO this will be a fun ride
     
  16. NothingIsOT

    NothingIsOT Prom pic
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    happy lose thousands of dollars day.
     
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  17. Taques

    Taques sometimes maybe good sometimes maybe shit
    Staff Donor TMB OG
    The Real Movement

    should i lock in my gains and sell everything
     
  18. NothingIsOT

    NothingIsOT Prom pic
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    Miami MarlinsMiami DolphinsFlorida PanthersDetroit TigersMiami Heat

  19. Taques

    Taques sometimes maybe good sometimes maybe shit
    Staff Donor TMB OG
    The Real Movement

    hello GE puts
     
  20. letan

    letan Just looking for the gator board
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    Real MadridJacksonville JaguarsFlorida GatorsTampa Bay Rays

    Interesting article I just read regarding COKE vs KO. CEO of COKE and his fam have a good thing going.

    Investor Confusion Between KO And COKE Is Unfairly Benefiting COKE Shareholders. $COKE
    https://seekingalpha.com/article/4286808
     
  21. RockHardJawn39

    RockHardJawn39 #FranklinOUT
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    Penn State Nittany LionsSan Francisco GiantsPhiladelphia 76'ersPhiladelphia FlyersLiverpoolWrexham AFC

    How much do you guys put away in 529s per kid per year?
     
  22. MODEVIL

    MODEVIL Well-Known Member
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    6k per year. I know it’s not enough but ever bit will help down the line.
     
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  23. dahldennsull

    dahldennsull Living in the best state
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    Oklahoma City ThunderCleveland BrownsOklahoma SoonersHouston Oilers

    i've been putting in a lot but our kids are likely going to private K-12 based off our neighborhood location so now that I can use it for that, been trying to move a lot of my company stock grants to 529 accounts
     
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  24. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Right now we're putting $3000 / kid (for 3), plus my parents and in-laws give some birthday/Christmas money that goes in.
     
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  25. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Once I get to where I can consistently max my 401k, 2 Roth IRAs, and HSA, I'll bump it up more if I can. But for now, loans can be taken out for school, but not for retirement.
     
  26. Smuggy

    Smuggy Well-Known Member
    Alabama Crimson Tide

    What happens if your kid gets a full ride? Do you just get all of the money you contributed back?
     
  27. MODEVIL

    MODEVIL Well-Known Member
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    Full ride :pffft:

    I have 2 - one might have a chance at academic grants etc but we will likely be unable to get scholarships due to income level. My younger one will be a frat star, not very coordinated/athletic but the class clown and friend of all.

    Here is some info on unused 529 funds:

    https://www.savingforcollege.com/article/5-ways-to-spend-leftover-529-plan-money
     
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  28. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    You can take money out equal to the scholarships penalty free. If they don't go to school at all, you can take contributions out and a penalty and taxes on the gains.
     
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  29. Ty Webb

    Ty Webb Living rent free in Jigga's head
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    You can also change beneficiaries. Nieces, nephews, grand kids, etc
     
  30. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    That too. Hopefully I'll be able to roll some from my oldest down to the others since we were saving a bunch more when we had just the 1.
     
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  31. Gallant Knight

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    so worst case scenerio for the 529 is the funds aren't used for your kids and you can just treat the funds like a 401k and pay a penalty when you withdraw $?
     
  32. Bo Pelinis

    Donor TMB OG
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    Believe so. Or if you have grandkids you can make them the beneficiary some time in the future.
     
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  33. Gallant Knight

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    lol fuck that
     
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  34. Bo Pelinis

    Donor TMB OG
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    And you can use the 529 funds for room and board, as well. I talked to a lady that bought an investment property where her daughter went to college and charged her daughter rent and paid it via the 529 (also had roommates).
     
  35. RockHardJawn39

    RockHardJawn39 #FranklinOUT
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    daannng
     
  36. Joystick Izzy

    Joystick Izzy Well-Known Member
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    Money in a 529 is after-tax money. So not like a 401k at all. Depending on your state laws, you can get a state tax reduction, but it isn't tax-deferred money. Using it for anything other than education is a terrible use of the money.
     
  37. beist

    beist Hyperbolist
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    now thats high quality tax avoision
     
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  38. Gallant Knight

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    gotcha i thought it was pre-tax.

    so the only benefit of a 529 is not having to pay capital gains taxes?
     
  39. Bo Pelinis

    Donor TMB OG
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    Pretty much. It's a roth for college with the option of a state income tax deduction depending on your state/plan.
     
  40. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Can also be used for computers and school supplies.
     
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  41. Dale Doback

    Dale Doback Well-Known Member
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    Looking for some help/criticism on my current investment portfolio. Me and my wife both max out 401Ks and Backdoor Roth. With Td, i have a deposit go in every 2 weeks and make the purchases below. Should i move anything around? Anything obvious jump out as wrong or that i could be doing better? Also, we have a kid coming at the end of the year so i need to start looking at 529s.

    401Ks
    TRowe 2055 Fund (100% of wife's)
    Vanguard 2055 Fund (80% of mine)
    VFIAX (20% of mine

    ROTH
    Vanguard 2055 Fund (66%)
    VTI Total Market (33%)

    Investment in TDAmeritrade
    SPAB (30%)
    SPDW (10%)
    SPTM (60%)
     
  42. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    Main comment would be on matching the target date funds with the S&P or total market funds. I assume you are working to overweight the US market compared to that held in the target funds. The target fund is 54% total stock. If so, that's fine, was just making sure you understood what was happening there.
     
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  43. Dale Doback

    Dale Doback Well-Known Member
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    I don’t think I quite follow you. Do you mind explaining a little further?
     
  44. billdozer

    billdozer Well-Known Member
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    Clemson TigersCarolina Panthers

    For example, in your 401k you are 80% 2055 and 20% VFIAX (S&P 500). The 2055 fund is 54% total stock, which is made up of around 80% large cap (S&P 500), 13% mid cap, and 7% small cap (off memory). So you really already have vfiax in the 2055 fund.

    Your Roth is easier to see, 66% 2055, 33% total stock. So really you have 66%x.54=35.64%+33%=68% total stock in your Roth.
     
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  45. Dale Doback

    Dale Doback Well-Known Member
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    I have not looked at it that way before but it makes sense and does not bother me. Thanks for the input and new info.
     
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  46. RockHardJawn39

    RockHardJawn39 #FranklinOUT
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    Do any of you guys work with/know a lot about mortage rates? I got into mine at 4.5% in 2018 before it jumped to 4.75. Obviously a time to refinance, but do you think it'll go much lower than it is currently?

     
  47. WillySaliba

    WillySaliba Well-Known Member
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    Philadelphia 76'ersArsenal

    Depending on your situation you’re going to save a fuck load regardless. I don’t think it’s going to move much lower.

    Also I saved over 60k in one day because of Brexit and this thread a few years ago. Also cut down to 15, currently under ten now. My monthly payment went up like $100.
     
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  48. RockHardJawn39

    RockHardJawn39 #FranklinOUT
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    I was talking to a mortgage specialist with USAA and I'd be looking at roughly $20k in closing costs, so it'll take roughly 13 years to break even there.
     
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  49. WillySaliba

    WillySaliba Well-Known Member
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    Philadelphia 76'ersArsenal

    Not going to pretend to be a mortgage expert but we do have a few on the board. They frequent the homeowners thread if you have any questions I'd start there.
     
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