It’s not only taxes. Just read these boards for a few month and you read a lot of stuff from people who have no idea what they are talking about.
OT: Need some interview/salary advice for a friend - Denouement!
- Thread starter DJ Spanky
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Yep and I assume these are the same folks who worry about being taxed on retirement minimum distributions from IRAs. I'd far rather have a lot more income and lose some of that to taxes than have a lot less income and pay less tax on it. Net should be all people care about unless there's some unusual complexity involved.
Your comment made me think about the taxes for IRA distribution. You can move to a country with no or low taxes like Singapore for a year or two and take out all your IRA without paying any taxes similar to people moving to Florida or Texas to escape state taxes. I would have to check with a tax lawyer to see if it can be done.
16 Countries with No Income Taxes
This article explores the top tax-free countries and potential issues you may face when planning to move to some of these zero-tax nations.
nomadcapitalist.com
Totally agree. Which is why I don’t think the Roth is as great a deal that people think it is, because you’re better of deferring taxes thanks to compound interest, and paying them when you take your distributions during retirement.
For lots of people, that's likely true. But for people who are on track to wind up with a lot of retirement income from various sources, it's not quite so easy to determine the best approach. Especially not 15-20 years in advance.
If you have lots of income from various sources you simply don’t withdraw from your IRA, and this way you never pay taxes on your IRA amounts. Or you only withdraw what you need, and pay taxes on amounts withdrawn.
If you don’t withdraw anything, you will never pay taxes on your IRA. I know people in this situation because they are able to live on their NJ State Pension and Social Security.
In this instance, Your heirs will pay taxes, when you pass on, once they withdraw.
It is a fact that your money will grow faster if you defer taxes, due to compound interest. It’s close to the first lesson taught in MBA Finance Class.
I guess everyone he knows kicks the can before 70 1/2.
even if you could hold on to it without withdrawing after 70 1/2 - why? Save it for your kids who are going to get crushed on taxes? Withdrawal it and pay the taxes owed.
Agreed, estate taxes are brutal. Plus a lot of people are working to almost 70 now so they hit the minimum withdrawal age rather quickly after they retire.
The RMD is now 73. When he mentioned let the kids pay the tax when they inherit it, their tax rate probably will be at their highest and maybe at the max since they will receive it in their 50-60’s. If you withdraw it Or transfer to Roth IRA it might be a lower tax rate. I have been withdrawal it before 73 and paying at the lower rate so the beneficiary receives more tax free money.
I’m fast approaching the RMD age.
I believe either 2022 or 23, my sister had it push back to 73.
IRAs: The RMD rules require individuals to take withdrawals from their IRAs (including SIMPLE IRAs and SEP IRAs) every year once they reach age 72 (73 if the account owner reaches age 72 in 2023 or later), even if they're still employed. Owners of Roth IRAs are not required to take withdrawals during their lifetime.Dec 20, 2023
This is a great thread and one that - like the OP's friend - I recently dealt with, myself. Obviously, every situation is different, as is how you deal with it in order to find a resolution that you're happy about.
In my case, just like someone else noted above, I was asked for a salary range before I even interviewed. But, lucky for me, my prospective employer posted a range for the position I was going to interview for. So, I chose a (narrow) range that was about 60% or so (i.e. better than the halfway point) of the range. The low end of that range is still more than what I was previously making. However, I was imagining that - if they offered me the job - it would be somewhere in the middle of the range I'd given. When they did offer me the job, they offered me the bottom of the range (just like someone else here mentioned happened to them) PLUS a signing bonus. I'm pretty sure that they immediately offered the bonus in order to snuff out any chance for a negotiation on my part. In retrospect, I thought, "How about you just up the salary by $X and you can keep the singing bonus". But, of course, hindsight is always 20/20.
My case - like everyone's - is different. It wound up that they offered me a position that WASN'T the one I applied for and the the salary range I'd given was likely more than what they'd ordinarily pay for this position. Thus, what they did offer -- even though it was the bottom my range -- was likely the mid or upper-end of what they would pay. Also, due to some administrative snafu on their part, I have to wait an additional few weeks before I can start. They called a few days ago to apologize and offer me an ADDITION to my signing bonus for my troubles. So, that was a nice.
In the end, I can live on the salary I'll be making and I'm satisfied with how this turned out. Happy? Maybe not. But, satisfied? Yes.
In my case, just like someone else noted above, I was asked for a salary range before I even interviewed. But, lucky for me, my prospective employer posted a range for the position I was going to interview for. So, I chose a (narrow) range that was about 60% or so (i.e. better than the halfway point) of the range. The low end of that range is still more than what I was previously making. However, I was imagining that - if they offered me the job - it would be somewhere in the middle of the range I'd given. When they did offer me the job, they offered me the bottom of the range (just like someone else here mentioned happened to them) PLUS a signing bonus. I'm pretty sure that they immediately offered the bonus in order to snuff out any chance for a negotiation on my part. In retrospect, I thought, "How about you just up the salary by $X and you can keep the singing bonus". But, of course, hindsight is always 20/20.
My case - like everyone's - is different. It wound up that they offered me a position that WASN'T the one I applied for and the the salary range I'd given was likely more than what they'd ordinarily pay for this position. Thus, what they did offer -- even though it was the bottom my range -- was likely the mid or upper-end of what they would pay. Also, due to some administrative snafu on their part, I have to wait an additional few weeks before I can start. They called a few days ago to apologize and offer me an ADDITION to my signing bonus for my troubles. So, that was a nice.
In the end, I can live on the salary I'll be making and I'm satisfied with how this turned out. Happy? Maybe not. But, satisfied? Yes.
I don’t think so, I think the 10% penalty applies to withdrawal before 59 1/2. I actually have been moving it over to ROTH IRA.
The taxes on heirs is one reason we've started gifting our son (up to $36K allowed, tax-free per year) and making more charitable donations. The rest doesn't matter much if you have more than enough for retirement. If I have to take out more than I need and pay some tax on it, I'm still in a pretty good spot...
Makes me think back to my start of my career at IBM in 1981- IRA's had just came out and as a 18 y/o- I didn't care about them....I wanted as much of my $13 k a year in my pocket- though, I did do their direct stock investment- you got 25% off market price if taken direct from your paycheck(max- 20% of your pay)- they also actually mailed you the physical stock or stocks when you earned them.
As a dumb ass- I would get my stock- run to the IBM CU and cash them in with the auto 25% profit on each one. I recently looked at my 12 year earnings were back in those days- and how many stocks I had purchased/sold. And the calculations based on splits etc. I would have invested about 170k into their stocks and they would now have been worth almost 2 mil.
As a dumb ass- I would get my stock- run to the IBM CU and cash them in with the auto 25% profit on each one. I recently looked at my 12 year earnings were back in those days- and how many stocks I had purchased/sold. And the calculations based on splits etc. I would have invested about 170k into their stocks and they would now have been worth almost 2 mil.
Definitely missed that part. Glad they did it. Of course I’m now just starting to think about retirement as I’m getting closer to mid 50s. If the market remains good for the next 10 years it could be a bit sooner than I ever envisioned.
As was pointed out already, it's not always that simple. Also, depending on the size of an estate, passing on that tax burden to the kids may not be the best idea.
Also, I'm not suggesting that people not put pre-tax money away and let compounding work for them. Again, for most people, maximizing their pre-tax retirement savings for the entire career is going to make the most sense.
But for certain people with less common income and tax situations, there can be other considerations and other approaches with better outcomes that maximize growth and minimize taxes down the road.
We're not in wild disagreement. I'm just saying that one size doesn't fit all situations.
The salary negotiation trick that works 'time and time again,' according to an ex-Goldman Sachs recruiter
More than 1 in 4 workers in the U.S. now lives in a place where they're entitled to see pay ranges on job ads.
So I wanted to bring this full circle. I appreciated all of the advice from this thread and shared it with my friend. She was able to negotiate to place her in the midpoint of the salary range, which they agreed to give her after her 3 month probationary period. That just came through today so all is right in the world.
Again, thanks to everyone for chiming in.
Again, thanks to everyone for chiming in.
The problem with probation- unless it is an entry level position into sales- and even then- it is most likely an easy out for an employer.
I wish it were longer. i have an employee who restrained his bad behaviors until after the probation period ended. now i have to deal with PIP's and "coaching"
While walking on eggshells. It sucks you can't just say put on your adult clothes and get to work. Play time is over.
They may have offered her the job because of the lower range she said. I think she should determine what she needs for a salary and tell them that in the next call, and say it's firm. She may have to prepare to not get the job though. If it is her dream job maybe she should be flexible with the salary.
Btw- glad your friend got the offer she wanted. I also hope she just stays aware. Tge 3 month probation thing to get to where she really wants to be is a BS move by employers but no matter what- this economy is rough on anyone looking
I hear that from some, but my friends in pharma and finance, at least, tell me things are still pretty good. Heck, I keep getting approached by headhunters 4 years after retiring, based on my Linked In profile, as well as from a few consultants I worked with over the years. On the other hand, our son in tech says finding a good job is tough (he has a good one, but has been looking some). I certainly don't have enough data to know for sure.
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