Tax "advantages" of an IRA

Discussion in 'Economy' started by SpidermanTuba, Mar 8, 2009.

  1. SpidermanTuba
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    SpidermanTuba BANNED

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    disappear in bad economies.


    I had a small brokerage account that I had set up as an ordinary, non-IRA account. I took an $800 realized loss on it in 2008 - which sucks - but unlike an IRA - I was able to write the losses down on my taxes.
     
  2. Jon
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    Jon The CPA

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    Depends on what your IRA is invested in. Mine are invested in bank CD's, so there is little risk involved. You wrote down an $800 loss, I had a gain.

    Also, writing down the losses is all great fun for tax savings this year, but it will bite you in the ass when you cash in.
     
  3. SpidermanTuba
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    SpidermanTuba BANNED

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    I'm only 31. Why would I put my retirement savings in CD's?

    The loss was from Fannie Mae. I seriously doubt they are coming back any time soon.
     
  4. Burp
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    Burp Always carry, never tell

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    You move it to CD's because they are safe.

    Must be nice to be able to lose $800.00 and not worry about it.
     
  5. SpidermanTuba
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    What's the point of worrying? its gone. I'm just happy to get 15% of it back in less taxes.

    I'll start moving my retirement money to CD's and treasuries when I start hitting 40 or 45.
     
  6. Burp
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    Burp Always carry, never tell

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    Let's see. Don't move you money to something safe while the market is tanking.

    But your good news is that you get 15% back (less taxes).

    You will ignore what the market does for 9 years (or more) and then start moving your money around.

    Yep. A sound investment strategy.

    Betting on a BO handout no doubt.
     
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  8. Burp
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  9. SpidermanTuba
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  10. Skull Pilot
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    The only IRA anyone should bother with is a Roth IRA.

    There really is no long term benefit to tax deferred retirement accounts. the one exception being an account with an employer match. In which case you should contribute just enough to get the maximum match. Then fund a Roth , if eligible and invest the rest in a diversified portfolio.

    The reason being, is that the government will recoup all those deferred taxes in the first few years of retirement and traditional IRAs and other tax deferred accounts are subject to required minimum withdrawal rules based on your age. you have to take out a mandated amount every year or you are penalized. This is just a way for the government to squeeze out of you every last penny of taxes that it can before your croak. And all that money is taxed as regular income which is generally a higher rate than long term capital gains.
     

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