Better rates than a CD ? Featured

See that was useful although I am not sure AT&T is all that wonderful but you can't go wrong selling Americans sugar water. The yields are still in the 2s.

On Sat, 17 Apr 2021 01:26:51 +0000 (UTC), danny burstein posted for all of us to digest...

Don't forget the Fentanyl by China both through Mexico.

If I had 2 million, I probably would not need a CD.

:-)

.4% is not great, but better than the .1% that my savings pay.

So I make $1 instead of 25 cents.

:-)

That is the one that gets me with those people who say they adjust their withholding so they end up paying a little or even a lot each year to the IRS. They say they don't want to lose the interest on the money for that time. Personally I would rather get a good sized check back from Sammy than to play chicken with them for the 0.1% the bank is giving me. That "penalty and interest" thing the IRS does could wipe out a lifetime of your 0.1% in one unusual tax year.

Since both .4% and .1% are way less than the rate of inflation, both are losing strategies. Dump the CD, which is something that should have been done 15-20 years ago.

Ideally, you'd want to come out as close to even as possible at tax time. Whether you owe them or they owe you, the amount should be as small as possible and everyone is happy, most notably the IRS.

Some people are unable to manage their money. Those folks tend to increase their tax withholding really high so that they get a big refund back at tax time. They see it as free money, a windfall, somehow not realizing that they're getting back their own money, without interest. The rest of us simply call that giving the IRS an interest-free loan and we don't like it. The IRS doesn't mind, of course.

The third scenario is reducing your withholding to the minimum so that you have more money to play with every month, but you owe a bigger tax bill at tax time. That approach has some problems and is where the IRS starts talking about penalties for under-calculating your withholding. They may even ask for quarterly estimated tax payments if things get too lopsided.

You sound like the folks described above who are unable to manage their money. That "good sized check" is costing you.

I try to adjust my tax so I come out abut even. This year I did a fair job in getting back about $ 650 from the feds and had to pay about $ 550 to the state.

I never did like to get much back from the feds. Being retired I don't want to get into the problem of sending them quartly tax money so I have some taken out every month from the pension money and a lump sum taken out of the IRA money I take out.

I have not messed with the CD's in around 20 years. There is no profit in those any more. I would rather take my chances with the mutual funds in the IRA. I keep what I think I may want to spend for a year or so in a money market account so if the stock market goes down for a year it does not make much difference.

Starting next year I will have to take the RMD and it will be more than I want to spend. Not too sure what to do with the excess money. Guess I will look into the mutual funds and pick one to put the money in.

I do play around with the stock market with about 5 % of the money I have just for the fun of it. So far I have been doing well with it by concnetrating on just a couple of stocks that go up and down about every day. I probably average buying and selling those couple of stocks about once a week. Made enough last year to build a carport garage I had been looking into for a few years.

OK let's see how much it is costing me. Say I got $5000 back and it was put in there evenly over a year. I put this in my financial calculator using $416.67 a month for 12 months at .25%. (what my bank pays) I lost a whopping $5.77. That is pretty cheap insurance against having a windfall towards the end of the year that blew out my withholding and got me stuck in paying quarterlies or worse, some kind of penalty. Said another way that is a Mocha Venti Frappachino starbucks. I can afford it. I have plenty of cash on hand.

YOu are ok with that small amout.

Now try throwing the same numbers in that calculator and an interist rate of 15 % over a period of 10 to 20 years and see how much it is costing you in the long run.

You are allowed a certain ammout of under payment on the federal taxes. I think it may eveh have something to do with the tax the year before, but not sure.

Maybe I am just lazy or maybe I don't like paying short term capital gains taxes but I try to buy stocks I will keep at least a year. Some are just on autopilot. SWKS was a speculative play that worked out nicely but it wasn't a CVCO that I bought before the housing crash for $10 when Centex spun it off. Centex bought my pool. CLNE was a scary dive to the bottom for me and I sat on a loser for quite a while until they were able to blow the ballast tanks and now I am looking at a double. I should have been dollar cost averaging that one. Shares in February 2020 were two bucks and now it is over 11. T Boone may have actually been holding them back. Ironically the only loser I am holding is IBM and those are "zero basis" shares so it is just losing what could have been not any real money I spent.

I pay quarterly estimated in 4 equal payments because I don't like the thought of dealing with my taxes 5x/year. There is a federal web site, EFTPS at

Pay tax on it :) I set it up so money is automatically withheld.

I got penalized for two years underpaying the state and was not told for a couple of years which compounded the interest owed.

I had made the mistake of not filing quarterly with them figuring I would just pay up at the end of the year. This was because they made it difficult to establish quarterly payment. Form were not readily available and when I had to do it several days of calling were necessary.

I had a pleasant surprise this year getting nearly $500 back from both federal and state. Usually I have to pay the feds a few bucks and get a little bit back from the state. What did it was not having to take the RMD for 2020.

Yet another right wing myth. At least that one won't create an insurrection.

Even though the article is from 2016, the options are still valid:

While valid, they don't help me.

1. Invest--I may invest some in stocks but that still just gives me more money with nothing I really want to do with it. The needs and wants of me and the wife are not much.

1. Invest QLAC Have to live to 80 or 80 years old, I may not make it that long.

2. Life Insurance I would have to die and that would not do me any good. I don't have any on me or my wife. Waste of money for us at this point in life being over 70 years old and the ammount of money we have. Nursing home will probably get it anyway later in time.

1. Charity Again that is just giving the money away and will not help me.

I will probably just spend it on things that I may want,but never thought about buying or needing. Like just went through over $ 30.000 to build a carport garage and new larger lawn tractor to put in it. May have the master bed room remodeled next year. Seems that about every 2 years the wife wanted another room redone or painted or new flooring.

Like Ralph said, if you're using .25% as your rate you're doing it wrong. You can't swing a dead cat without hitting investment opportunities that pay 5%, 8%, 10%, and if you're willing to play with stocks, 15-25% and up.

Very conservatively, I'd say your $5000 refund is costing you at least $500. You have plenty of cash on hand so $500 isn't going to affect you, but I'd hate to see others follow your bad example if they didn't know any better.