Official Investing Thread

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

  1. Ty Webb

    Ty Webb A donut without a hole, is a Danish.
    Donor
    Nebraska CornhuskersChicago CubsChicago BullsDetroit LionsChicago BlackhawksTiger Woods

    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
    Donor
    Ohio State BuckeyesLSU TigersCincinnati RedsCincinnati Bengals

    Is there still a yearly maximum contribution for the Roth?
     
  3. momux

    momux AFAM Scholar
    Donor
    North Carolina TarheelsCarolina PanthersChelsea

    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
    Donor
    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.
    Donor
    Atlanta BravesNew Orleans PelicansNew Orleans Saints

    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
    Donor
    Clemson TigersCarolina Panthers

    We were talking about mega backdoor
     
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  7. Ty Webb

    Ty Webb A donut without a hole, is a Danish.
    Donor
    Nebraska CornhuskersChicago CubsChicago BullsDetroit LionsChicago BlackhawksTiger Woods

    upload_2019-8-8_16-38-30.jpeg
     
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  8. billdozer

    billdozer Well-Known Member
    Donor
    Clemson TigersCarolina Panthers

    Ty Webb likes this.
  9. PeterGriffin

    PeterGriffin Iced and/or sweet tea is for dirty rednecks.
    Florida State SeminolesAustin FCTottenham HotspurAvengers

    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?
     
  10. NothingIsOT

    NothingIsOT I got you COACH!
    Donor
    Detroit TigersFlorida State SeminolesMiami Dolphins

  11. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

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

    :|
     
  12. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

    go ahead and get under 7.00 for daddy
     
  13. Taques

    Taques let's mosey
    Staff Donor TMB OG
    Texas Tech Red RaidersBoston CelticsManchester CityTorinoNew Mexico UnitedPCd'I

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  14. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

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

    NothingIsOT I got you COACH!
    Donor
    Detroit TigersFlorida State SeminolesMiami Dolphins

    happy lose thousands of dollars day.
     
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  16. Taques

    Taques let's mosey
    Staff Donor TMB OG
    Texas Tech Red RaidersBoston CelticsManchester CityTorinoNew Mexico UnitedPCd'I

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

    NothingIsOT I got you COACH!
    Donor
    Detroit TigersFlorida State SeminolesMiami Dolphins

  18. Taques

    Taques let's mosey
    Staff Donor TMB OG
    Texas Tech Red RaidersBoston CelticsManchester CityTorinoNew Mexico UnitedPCd'I

    hello GE puts
     
  19. letan

    letan Just looking for the gator board
    Donor
    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
     
  20. RockHardEnis39

    RockHardEnis39 StEvIS_iN_cBuS/LandlordBob stalks me
    Donor
    Penn State Nittany LionsSan Francisco GiantsPhiladelphia FlyersLiverpool

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

    MODEVIL Well-Known Member
    Donor
    Los Angeles LakersChelseaLos Angeles Angels of AnaheimUnited States Men's National Soccer TeamLos Angeles Football ClubArizona State Sun Devils

    6k per year. I know it’s not enough but ever bit will help down the line.
     
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  22. dahldennsull

    dahldennsull Living in the best state
    Donor
    Oklahoma City Thunder

    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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  23. billdozer

    billdozer Well-Known Member
    Donor
    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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  24. billdozer

    billdozer Well-Known Member
    Donor
    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.
     
  25. Smuggy

    Smuggy Well-Known Member

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

    MODEVIL Well-Known Member
    Donor
    Los Angeles LakersChelseaLos Angeles Angels of AnaheimUnited States Men's National Soccer TeamLos Angeles Football ClubArizona State Sun Devils

    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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  27. billdozer

    billdozer Well-Known Member
    Donor
    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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  28. Ty Webb

    Ty Webb A donut without a hole, is a Danish.
    Donor
    Nebraska CornhuskersChicago CubsChicago BullsDetroit LionsChicago BlackhawksTiger Woods

    You can also change beneficiaries. Nieces, nephews, grand kids, etc
     
  29. billdozer

    billdozer Well-Known Member
    Donor
    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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  30. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

    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 $?
     
  31. Bo Pelinis

    Bo Pelinis WE GO HARD ON EARTH
    Donor TMB OG
    Nebraska CornhuskersBig 8 Conference

    Believe so. Or if you have grandkids you can make them the beneficiary some time in the future.
     
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  32. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

    lol fuck that
     
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  33. Bo Pelinis

    Bo Pelinis WE GO HARD ON EARTH
    Donor TMB OG
    Nebraska CornhuskersBig 8 Conference

    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).
     
  34. RockHardEnis39

    RockHardEnis39 StEvIS_iN_cBuS/LandlordBob stalks me
    Donor
    Penn State Nittany LionsSan Francisco GiantsPhiladelphia FlyersLiverpool

    daannng
     
  35. Joystick Izzy

    Joystick Izzy Well-Known Member
    Donor
    Georgia BulldogsAtlanta BravesTennessee TitansNashville Predators

    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.
     
  36. beist

    beist Hyperbolist
    Donor

    now thats high quality tax avoision
     
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  37. Gallant Knight

    Donor
    Arkansas RazorbacksHouston AstrosAston Villa

    gotcha i thought it was pre-tax.

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

    Bo Pelinis WE GO HARD ON EARTH
    Donor TMB OG
    Nebraska CornhuskersBig 8 Conference

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

    billdozer Well-Known Member
    Donor
    Clemson TigersCarolina Panthers

    Can also be used for computers and school supplies.
     
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