Welcome to the North American Subaru Impreza Owners Club Sunday May 9, 2021
Home Forums Images WikiNASIOC Products Store Modifications Upgrade Garage
NASIOC
Go Back   NASIOC > NASIOC Miscellaneous > Off-Topic

Welcome to NASIOC - The world's largest online community for Subaru enthusiasts!
Welcome to the NASIOC.com Subaru forum.

You are currently viewing our forum as a guest, which gives you limited access to view most discussions and access our other features. By joining our community, free of charge, you will have access to post topics, communicate privately with other members (PM), respond to polls, upload content and access many other special features. Registration is free, fast and simple, so please join our community today!

If you have any problems with the registration process or your account login, please contact us.







* As an Amazon Associate I earn from qualifying purchases. 
* Registered users of the site do not see these ads. 
Reply
 
Thread Tools Display Modes
Old 04-02-2021, 04:37 PM   #10051
edkwon
Scooby Specialist
 
Member#: 453
Join Date: Oct 1999
Location: 小さいӔ
Vehicle:
2020 Kia Telluride
2015 911 Turbo

Default

Quote:
Originally Posted by Tim_ View Post
Yes, however if you take the proceeds from the sale to buy another rental, you can defer the capital gains tax indefinitely (forever) by doing a 1031 exchange. You have a short window to pull that off though and typically need to identify the new investment before selling and be able to close on the next property within 6 weeks.
The paperwork involved with a 1031 exchange is also a more involved pain in the ass that gets even more invasive in the details of your finances with a lot more paperwork that makes applying for a regular home loan seem easy by comparison.

They make dodging gains taxes on the sale of an investment property possible, but not easy.
* Registered users of the site do not see these ads.
edkwon is offline   Reply With Quote
Sponsored Links
* Registered users of the site do not see these ads.
Old 04-02-2021, 04:49 PM   #10052
Tim_
Scooby Specialist
 
Member#: 304128
Join Date: Dec 2011
Location: Baltimore
Default

Quote:
Originally Posted by edkwon View Post
The paperwork involved with a 1031 exchange is also a more involved pain in the ass that gets even more invasive in the details of your finances with a lot more paperwork that makes applying for a regular home loan seem easy by comparison.
What sorts of extra documentation is needed?

EDIT: just checked, Looks like there a bit more involved of course due to the fact that you have to arrange for an intermediary to handle the funds and the actual exchange to make it legal.

Last edited by Tim_; 04-02-2021 at 05:01 PM.
Tim_ is offline   Reply With Quote
Old 04-02-2021, 05:45 PM   #10053
hooziewhatsit
Scooby Newbie
 
Member#: 143938
Join Date: Mar 2007
Chapter/Region: NWIC
Location: Oregon
Default

Oof. Paperwork doesn't sound fun. Besides, there's nothing else in this price range available to buy with the proceeds.

Rental agreement is month to month, so I can raise the rent anytime, I just haven't gotten around to it The new laws here limit the yearly increase to just under 10%, unless they move out (which they almost did last summer).

I did try to refinance it to a 15 year @3.3ish, but the bank came back and said we didn't have enough employment history. Though the same bank did the refi on our primary without an issue I'll have to try somewhere else.

Our rental agent is going to drive by and let me know what she thinks.

Thanks for the thoughts.
hooziewhatsit is offline   Reply With Quote
Old 04-03-2021, 05:42 PM   #10054
Tim_
Scooby Specialist
 
Member#: 304128
Join Date: Dec 2011
Location: Baltimore
Default

Quote:
Originally Posted by hooziewhatsit View Post
I did try to refinance it to a 15 year @3.3ish, but the bank came back and said we didn't have enough employment history. Though the same bank did the refi on our primary without an issue I'll have to try somewhere else.
some lenders are not good with investment property loans and it only gets more difficult if you own in an LLC (which I do). So with that said, you just have to reach out to other lenders til you find one that will work with you. Get a little canned email template with your financials (credit score, household income) and the numbers on the property (current loan balance and rate, current monthly rent) and shoot it out to some lenders. Once you get some quotes then you can take the best ones and price match them. I would encourage you to go with a 30 over a 15. You'll have better cash flow and its better for your DTI as well. Some lenders will not even bother looking at YOUR finances as long as the rent covers the mortgage on the rental.
Tim_ is offline   Reply With Quote
Old 04-03-2021, 07:04 PM   #10055
drstuess
Scooby Newbie
 
Member#: 252955
Join Date: Jul 2010
Chapter/Region: NESIC
Location: great wall-> on the good side
Vehicle:
/\__ /(__

Default

Does anyone use Blockfi for their interest rates? I have a little bitcoin there, but contemplating moving some cash to take advantage of the 8.6 % on stablecoin like GUSD. I know there is some risk as they aren't insured? However seems relatively low risk as long as its not my whole savings.
drstuess is offline   Reply With Quote
Old 04-11-2021, 07:40 PM   #10056
Salvation27
Scooby Specialist
 
Member#: 292403
Join Date: Aug 2011
Chapter/Region: Tri-State
Location: In Van Down By Rockaway River
Vehicle:
2012 Legacy
Graphite

Default

Can someone explain why I canít take old 401ks and turn them into a 529 for my son/ get a little for a car down payment? Or is this a completely foolish idea?
Salvation27 is offline   Reply With Quote
Old 04-11-2021, 07:51 PM   #10057
YungBoba
Scooby Specialist
 
Member#: 450808
Join Date: Jul 2016
Chapter/Region: SCIC
Location: Irvine
Vehicle:
2017 WRX Premium
WR Blue Pearl

Default

Quote:
Originally Posted by Tim_ View Post
some lenders are not good with investment property loans and it only gets more difficult if you own in an LLC (which I do). So with that said, you just have to reach out to other lenders til you find one that will work with you. Get a little canned email template with your financials (credit score, household income) and the numbers on the property (current loan balance and rate, current monthly rent) and shoot it out to some lenders. Once you get some quotes then you can take the best ones and price match them. I would encourage you to go with a 30 over a 15. You'll have better cash flow and its better for your DTI as well. Some lenders will not even bother looking at YOUR finances as long as the rent covers the mortgage on the rental.
Fannie and Freddie recently (as of this month) made it harder to get loans on investment properties by both tightening up eligibility requirements and lowering the number of investment loans they'll back moving forward. Investment properties are already inherently more risky and therefore harder to get a loan for than a primary, but these changes definitely don't make it any easier.

https://www.fool.com/millionacres/re...roperty-loans/

+1 for a 30 vs. 15 year as far as cash flow/DTI. Most lenders don't charge prepayment penalties anymore. Find an amortization calculator online (or ask your lender to crunch the numbers for you) to figure out how much extra you'd have to throw at the mortgage each month to pay off the 30 in the same time as the 15, while simultaneously reaping the benefits of the lower monthly obligation and having the additional cash in case you need in a crunch.
YungBoba is offline   Reply With Quote
Old 04-11-2021, 09:29 PM   #10058
f4phantomii
Scooby Specialist
 
Member#: 58504
Join Date: Mar 2004
Chapter/Region: South East
Location: Ready to try OpenECU.org!!!
Vehicle:
2004 STi
Aspen White / Silver

Default

Quote:
Originally Posted by Salvation27 View Post
Can someone explain why I canít take old 401ks and turn them into a 529 for my son/ get a little for a car down payment? Or is this a completely foolish idea?
Nearly every financial advisor would tell you not to put the college savings ahead of your retirement.

I'd strongly recommend keeping the 401ks or rolling them into an IRA.

Find another way to fund the 529, even if it's a small contribution.

So in order of priority:

Emergency living expenses
401k / retirement savings
529
f4phantomii is offline   Reply With Quote
Old 04-12-2021, 06:44 PM   #10059
Salvation27
Scooby Specialist
 
Member#: 292403
Join Date: Aug 2011
Chapter/Region: Tri-State
Location: In Van Down By Rockaway River
Vehicle:
2012 Legacy
Graphite

Default

Damn. Ok.
Just wish I could do more than that.
Salvation27 is offline   Reply With Quote
Old 04-12-2021, 08:11 PM   #10060
f4phantomii
Scooby Specialist
 
Member#: 58504
Join Date: Mar 2004
Chapter/Region: South East
Location: Ready to try OpenECU.org!!!
Vehicle:
2004 STi
Aspen White / Silver

Default

Quote:
Originally Posted by Salvation27 View Post
Damn. Ok.
Just wish I could do more than that.
One other thing to note.

401ks are fairly well protected from lawsuits.

Both IRAs and 529 may have protection from lawsuits, but laws vary by state. You may want to check on the specific laws in your state.
f4phantomii is offline   Reply With Quote
Old 04-16-2021, 03:39 PM   #10061
jargon
Scooby Newbie
 
Member#: 107150
Join Date: Feb 2006
Chapter/Region: TXIC
Default

Just want to echo a comment someone made on here (or Reddit, can't remember) that when transferring securities from one brokerage to another, make sure the new brokerage has the cost basis correct.

One of my brokerages shut my account down a few years back because I was working overseas and apparently there was some sort of conflict with how they run their business. They liquidated some assets without telling me and then transferred the others to a crappy brokerage. I only recently got everything transferred back to a common brokerage, recently sold some stocks, and of course the cost basis showed 0.

I went in to talk to the first brokerage today and the guy, although helpful, acted like he had never had to look up a report from a few years back. I'm inferring by this that most people don't check to see that their cost basis is correct if they're transferring.

Anyway...make sure you check this; otherwise, the new brokerage will assume your cost basis was 0 and you'll be taxed way more than you should be when you decide to sell.
jargon is offline   Reply With Quote
Old 04-16-2021, 08:05 PM   #10062
Jack
Add Lightness
Moderator
 
Member#: 13699
Join Date: Dec 2001
Chapter/Region: NESIC
Location: Hopkinton, MA
Vehicle:
2021 Building
It Better

Default

Good advice. Only needed for taxable account. IRA, 401k, Roth, doesn't matter.
Jack is offline   Reply With Quote
Old 04-19-2021, 05:10 PM   #10063
Tilapia
Scooby Newbie
 
Member#: 42454
Join Date: Aug 2003
Chapter/Region: SWIC
Location: AZ
Default



Quote:
Today, the APY on your Wealthfront Cash Account is decreasing from 0.35% to 0.10% because the favorable bank relationship we secured last year has expired.
Tilapia is offline   Reply With Quote
Old 04-19-2021, 07:20 PM   #10064
shiplemw
Scooby Newbie
 
Member#: 203905
Join Date: Feb 2009
Location: MI
Default

Yeah. Time to move for different interest rates.

Is it better to drop it into a fidelity account and grab a low risk bond that can pull 3%? Maybe not if you have to pay capital gains after a year I guess.
shiplemw is offline   Reply With Quote
Old 04-20-2021, 08:43 AM   #10065
Salvation27
Scooby Specialist
 
Member#: 292403
Join Date: Aug 2011
Chapter/Region: Tri-State
Location: In Van Down By Rockaway River
Vehicle:
2012 Legacy
Graphite

Default

Figured it'd get more traction here:

Starting a new job. New Jersey.
Need to fill out W4 etc.

I have (1) son, 7 months, wife, house, etc.
How many allowances do I claim?
And I definitely list my son as a dependent?
Salvation27 is offline   Reply With Quote
Old 04-20-2021, 10:17 AM   #10066
vapore0n
Scooby Specialist
 
Member#: 21356
Join Date: Jul 2002
Chapter/Region: NESIC
Location: Can't catch me!
Vehicle:
2017 Subaru Corolla
STI Limited SE-R Type (R)

Default

Might want to use this to estimate how much will be withhold based on allowances and dependents:
https://www.irs.gov/individuals/tax-...ding-estimator

More allowances, less withholding, more you might have to pay at end of year.

gripe: I might have to think about that too for next year
vapore0n is offline   Reply With Quote
Old 04-20-2021, 10:23 AM   #10067
Jack
Add Lightness
Moderator
 
Member#: 13699
Join Date: Dec 2001
Chapter/Region: NESIC
Location: Hopkinton, MA
Vehicle:
2021 Building
It Better

Default

I hate, HATE owing. I've also got a not-insignificant 1099 income (selling tradelines), so both wife and I claim zero, withhold at single rate. I also use fed refund to buy paper iBonds, so want $5k minimum to be coming back to me. Hit it pretty close for 20 return, getting back the bonds plus $99.
Jack is offline   Reply With Quote
Old 04-20-2021, 07:31 PM   #10068
f4phantomii
Scooby Specialist
 
Member#: 58504
Join Date: Mar 2004
Chapter/Region: South East
Location: Ready to try OpenECU.org!!!
Vehicle:
2004 STi
Aspen White / Silver

Default

Quote:
Originally Posted by Jack View Post
I hate, HATE owing. I've also got a not-insignificant 1099 income (selling tradelines), so both wife and I claim zero, withhold at single rate. I also use fed refund to buy paper iBonds, so want $5k minimum to be coming back to me. Hit it pretty close for 20 return, getting back the bonds plus $99.
This is what I used to do too. When the wife stopped working and we had kids, I started taking a couple of deductions.

I kept my state tax withholding at zero.

We usually get a refund, or owe a small amount, usually because our small biz did exceptionally well. That won't be a problem for 2020!
f4phantomii is offline   Reply With Quote
Old 04-21-2021, 04:00 PM   #10069
shiplemw
Scooby Newbie
 
Member#: 203905
Join Date: Feb 2009
Location: MI
Default

Is it possible to have too heavy of an investment in a 401k? If someone maxed it out from age 24-65 they would have more than 3+ million dollars inside it (55k starting salary, 3% growth, 6% return assumed). If a dual income house did this, you'd have double that in 401k's.

The reason this came up is that I never knew that there were required minimum distributions after age 72 and that they are based on your balance and expected life span. As I ran some calculations assuming a (~3M balance at age 72) you'll be required to pull out ~4% or 137k. But by the time you get to age 80 the number climbs up to 5% or roughly 187k. Those figures double if you have two accounts. There is a tipping point in there that you'll be pulling out more due to requirements than you ever made as income over the course of your working career. Which has some serious tax implications or I would think it does anyway.
shiplemw is offline   Reply With Quote
Old 04-21-2021, 04:18 PM   #10070
shikataganai
Scooby Guru
 
Member#: 92634
Join Date: Aug 2005
Chapter/Region: RMIC
Default

Quote:
Originally Posted by shiplemw View Post
Is it possible to have too heavy of an investment in a 401k? If someone maxed it out from age 24-65 they would have more than 3+ million dollars inside it (55k starting salary, 3% growth, 6% return assumed). If a dual income house did this, you'd have double that in 401k's.

The reason this came up is that I never knew that there were required minimum distributions after age 72 and that they are based on your balance and expected life span. As I ran some calculations assuming a (~3M balance at age 72) you'll be required to pull out ~4% or 137k. But by the time you get to age 80 the number climbs up to 5% or roughly 187k. Those figures double if you have two accounts. There is a tipping point in there that you'll be pulling out more due to requirements than you ever made as income over the course of your working career. Which has some serious tax implications or I would think it does anyway.
The solution to this "problem" is to retire before age 65. Solved.
shikataganai is offline   Reply With Quote
Old 04-21-2021, 04:26 PM   #10071
Sloth
Scooby Newbie
 
Member#: 4052
Join Date: Feb 2001
Location: OT Bored Regular
Vehicle:
I am Sloth and
I approve this message

Default

Quote:
Originally Posted by shiplemw View Post
Is it possible to have too heavy of an investment in a 401k? If someone maxed it out from age 24-65 they would have more than 3+ million dollars inside it (55k starting salary, 3% growth, 6% return assumed). If a dual income house did this, you'd have double that in 401k's.
I was contributing at 12% until I hit a somewhat arbitrary # and then pulled back to the % needed to get the match. I guess it's a question of when you pay the tax, at this point I prioritized having cash that has already been taxed.
Sloth is offline   Reply With Quote
Old 04-21-2021, 04:37 PM   #10072
shiplemw
Scooby Newbie
 
Member#: 203905
Join Date: Feb 2009
Location: MI
Default

Quote:
Originally Posted by shikataganai View Post
The solution to this "problem" is to retire before age 65. Solved.
That assumes that someone has also been prioritizing non-retirement assets as well because you can't access the 401k until 59.5. Even if the person retired at age 55 and stopped contributing and assuming they had funds to cover the next 10 years to 65. You'd still end up with >2+MM in the 401k. At some point due to RMD's you'll still likely be pulling out more in required disbursements than you were making in income during your working career. Note this does not include any other income you'd have like say social security (assuming it is still around).

Quote:
Originally Posted by Sloth View Post
I was contributing at 12% until I hit a somewhat arbitrary # and then pulled back to the % needed to get the match. I guess it's a question of when you pay the tax, at this point I prioritized having cash that has already been taxed.
I'm doing some reading and this is along the lines of what I'm seeing. Some articles are talking about diversity and most people say yes (mutual funds, stocks, bonds, etc) but it comes down to a diversity of where the funds are located for taxes (tax deferred, taxable, tax free, etc).
shiplemw is offline   Reply With Quote
Old 04-21-2021, 04:41 PM   #10073
the_saintusa
Scooby Newbie
 
Member#: 171486
Join Date: Feb 2008
Chapter/Region: International
Location: Hiding from The Google
Vehicle:
2019 911 GTS
Silver

Default

Quote:
Originally Posted by shiplemw View Post
Is it possible to have too heavy of an investment in a 401k? If someone maxed it out from age 24-65 they would have more than 3+ million dollars inside it (55k starting salary, 3% growth, 6% return assumed). If a dual income house did this, you'd have double that in 401k's.

The reason this came up is that I never knew that there were required minimum distributions after age 72 and that they are based on your balance and expected life span. As I ran some calculations assuming a (~3M balance at age 72) you'll be required to pull out ~4% or 137k. But by the time you get to age 80 the number climbs up to 5% or roughly 187k. Those figures double if you have two accounts. There is a tipping point in there that you'll be pulling out more due to requirements than you ever made as income over the course of your working career. Which has some serious tax implications or I would think it does anyway.
This is why you need to have a plan.

BUT, what if you cannot work until 65 and have to start drawing earlier?

At some point some will have 'too much' money saved up. But you could always take out more than you need and just spend it, paying at the highest tax bracket.

i.e. 65 years old, $6M in saved, and just say F*** it and take $500k out one year, pay huge tax obligation and spend the excess on a vacation / car / property etc.

As a self-employed contractor I do not get a pension. So effectively have to save to generate enough cash to meet my expected/desired lifestyle.

I am planning on stopping at 60, the wife wants me to stop at 55. But if I have to stop at 50 I will be glad that I am saving at the rate that we are.

As you alluded to, most 80 yr old people are not burning through $187k/year, thus depending on where they park it (hopefully not a checking account) then their wealth may start to grow again.

Not perfect case scenario (meaning you saved to much) is that you saved too much and that your wealth continues to grow until you are dead. You are taking out less than you are able to spend, but continuing to save the 'excess'. There are many cases of people in their 90s who saved too much that are worth $10M+ b/c of this problem

We are in the fortunate position that assuming I can work until 60 (meaning not draw on savings), that we don't need to save any more in a tax sheltered manner due to having more than you need b/c you are forced to start withdrawing your $$$. As mentioned above, every advisor has told me to start buying property rather than putting $$$ in the stock market.

But depending on if you can incorporate and save within the corporation this is not a forced issue. We save most of our savings within the corporation where it too can grow sheltered.

Real issue is that we will never be in the situation of being F-You rich, but have enough to not worry within reason.

F-you rich is all relative, having $1M in the bank will be F-you rich, but to others even $10M will not be there. Even ULNWI at the bottom end ($30M+)are on the cusp of F-you $$$. One of my colleagues best friend is worth $100+ M and is upset he had to sell his jet (based on crunching the numbers)

Most of the people I work with are in a similar scenario, meaning you die being HNWI (<$5M) to very HNWI ($5M +). Some will be UHNWI. My best friends will likely be seeing a $10-100M payout from the sale of a company that is in the works.

The only difference between the different very HNWI and UHNWI is how many homes you have, how many luxury cars you CAN have, and the vacations you take.

The other difference is how you earned your $$$. All the UHNWI I know are in business, invented something etc. The HNWI saved and invested like regular people saving (albeit larger amounts), with a much higher percentage investing in individual stocks versus mutual funds.

Bottom line
Financial planning would be much easier if you knew the following:
1. When you would stop working (or would be forced to stop working)
2. How long you would need the savings to generate income (for whomever dies last).
3. Will you be needing to be in a nursing home. For some this is an increased cost. For others, this drops their annual expenditures. i.e. people living on $200k+/year are spending less in a nursing home.

4. If you are trying to be responsible, you may end up saving too much.
the_saintusa is offline   Reply With Quote
Old 04-21-2021, 05:06 PM   #10074
shikataganai
Scooby Guru
 
Member#: 92634
Join Date: Aug 2005
Chapter/Region: RMIC
Default

Solution to the 59.5 problem is substantially equal periodic payments.
shikataganai is offline   Reply With Quote
Old 04-21-2021, 07:48 PM   #10075
f4phantomii
Scooby Specialist
 
Member#: 58504
Join Date: Mar 2004
Chapter/Region: South East
Location: Ready to try OpenECU.org!!!
Vehicle:
2004 STi
Aspen White / Silver

Default

I believe there is also a "Rule of 55" that allows you to make penalty-free 401k withdrawals at age 55 if you are laid off, furloughed, or quit your job.

You are still required to pay the taxes, and only your most recent employer's plan may be used. Other 401ks from previous employers are not eligible.

Your employer sponsored 401k plan automatically withholds 20% of withdrawals for Fed Income Tax. But you do not incur the 10% penalty.

You should check to see if your plan allows "Rule of 55" withdrawals.

This does not apply to IRAs.
f4phantomii is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

All times are GMT -4. The time now is 07:20 AM.


Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
Powered by Searchlight © 2021 Axivo Inc.
Copyright ©1999 - 2019, North American Subaru Impreza Owners Club, Inc.

As an Amazon Associate I earn from qualifying purchases.