# we bought a new house, and got a bad roof job about 3 months ago, what do we do?

On 02/03/2016 12:46 PM, DerbyDad03 wrote:

I'm not in any high tax bracket as my wife and I are both on Social Security, I'm only pulling a small amount out of my 401k
I have enough in there that if I need to withdraw \$10k or so, it won't make much of an impact .
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On Wednesday, February 3, 2016 at 2:19:36 PM UTC-5, philo wrote:

It's not about a "high" tax bracket, it's about any given tax bracket. This is rough, but it explains the issue I am talking about.
Let's say your annual AGI is \$5K lower than the top of the 15% bracket. Right now, all of your income is taxed at 15%. Now let's say that you estimate that you will need a roof in 3 years to the tune of \$15K.
(To keep the numbers simple, let's ignore the fact that you need to take out more than \$15K to *net* \$15K after taxes by assuming you have other cash with which to pay the taxes.)
If you withdraw that \$15K out in one year, \$5K is going to be taxed in the 15% bracket, but the remaining \$10K is going to be taxed at 25%.
However, if you withdraw \$5K extra per year for the next 3 years, the entire \$15K will be taxed at 15% because you didn't bump yourself into a higher bracket in any given year. In the long run, you'll save yourself \$1000 in taxes.

Maybe not an impact on your "savings" but it may cost you more in taxes.
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On 02/03/2016 02:08 PM, DerbyDad03 wrote:

I better start saving up now
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DerbyDad03 posted for all of us...

How are potential gains affected by this?
--
Tekkie

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On Wednesday, February 3, 2016 at 5:10:42 PM UTC-5, Tekkie® wrote:

lf

As I said in an earlier post, you don't have to leave the distributions in cash, you can reinvest the net amount in the same investments that were use d in the qualified account.
Obviously there will be less to invest and the growth will be taxed in a different manner (capital gains and dividends instead of income) so the strategy should be considered with careful planning to determine if it makes sense.
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I thought personal financial matters are confidential ans private. Is this a contest for I am richer than you or I know more than you do? What an argument!
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On Wednesday, February 3, 2016 at 5:24:12 PM UTC-5, Tony Hwang wrote:

What the heck are you talking about?
All I was discussing was a tax planning strategy that could be employed by anyone that has money in a qualified account. There was no personal information shared or asked for and there was no "richer or smarter than" implied or intended.
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Sounds like no personal banker, lawyer, accountant.
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On 02/03/2016 07:22 PM, Tony Hwang wrote: ]
<snip>

You are correct, I have no personal banker, accountant or financial advisor. (Did hire a lawyer to do my will though)
A few times advisors have called on me and since I have been investing in the stock market for over 50 years and have been quite successful , I was the one who ended up giving them advice.
Started when I was 13 years old and my dad of course invested for me.
Mentioned this before somewhere but will repeat:
Choosing a good stock is not that difficult, the hard part is having the years of experience to know you can ride something out. VIZ: A cast iron stomach.
No matter what, the stock market has it's ups and downs and one must learn /not/ to panic and sell when things drop.
I started my daughter in the same tradition and she started calling the shots at even an earlier age then me. As a result the few thousand dollars worth of her childhood birthday and Christmas money grew sufficiently to put herself through college and graduate debt free.
I gave her a little help with car repairs etc but she has been damn independent.
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I hired a lawyer once. He ripped me off. Now he's RIP himself.

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On 02/03/2016 09:15 PM, Snuffy "Hub Cap" McKinney wrote:

The only other time I hired a lawyer was when I got divorced. since it was what they say a "friendly" divorce the fee was just \$175
I figured it was easier just to agree with her.
A friend of mine spent \$5000 on a lawyer and ended up having to give everything to his ex-wife anyway
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On Wednesday, February 3, 2016 at 10:36:12 PM UTC-5, philo wrote:

Everything except for \$5000.
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Divorce? Why married then? I am old fashioned.
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On 02/03/2016 11:38 PM, Tony Hwang wrote:

He was from China and needed to get married so he would not get deported.
He eventually found the right woman and things for him have been great.
A US citizen now and the head of engineering at a major firm
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That is what happens when you get married when you are not ready to marry someone. There was a guy in my office when I was working. He divorced 3 times and he said first time is harder but it gets easier afterward. I now understand why he never owned a house or any valuable asset.
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On 02/03/2016 11:43 PM, Tony Hwang wrote: X

I was divorced by the age of 30 but did not re-marry until I was 60
Plenty of time to think things through and all is right now.
That said, my first wife and I are still good friends.
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On 02/03/2016 10:36 PM, DerbyDad03 wrote:
X

Good point!
He invited me over to his apartment after she left
An incredible feat: The place was empty yet at the same time, a complete mess!
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philo wrote:

So you must be by now for sure a multi-millionaire?
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On 02/03/2016 11:37 PM, Tony Hwang wrote:

Hardly.
My initial investment was \$200. Had it been even as much as \$2000 though I very well might have been a millionaire now.
A million dollars today does not make one rich.
OTOH: I do have a rich life... my friends
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On Wed, 3 Feb 2016 12:08:14 -0800 (PST), DerbyDad03

Unless his income is low enough he's not paying any appreciable amount of taxes as it is. Your strategy would likely save "some" taxes - but significantly less.