Case Shiller and other real-time indicators also have OER estimates. D'uh. Thankfully, the Fed has been slowly adopting this POV, which bodes well for the future. Progress!
OT: Stock and Investment Talk
- Thread starter RU-05
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So I was reading last night and found out I man not be able to fund a Roth without being taxed. This is because of the Pro-Rata Rule.
Backdoor Roth Conversions And The Pro Rata Rule Caveat
In this article we will evaluate some of the things you should know before converting, including the often overlooked pro-rata rule.www.forbes.com
Over 20 years ago I rolled over some money from a previous job into a IRA/Annuity fund through my bank. This account is now through Nationwide. I am in the process of pulling it from there because it's costing me about 2.5% in fees to keep it in there. Also what it is invested in is not so great. I guess this counts as a traditional IRA for me? If I open a Roth and fund it then I would be subject to this Pro-Rata Rule. Luckily I did not fund my Roth yet through Fidelity on the traditional I opened. Do any of you guys run into this problem if you have a traditional and then fund a Roth? Are there any ways around it?
This should not be considered tax or legal advice; but rather, general information/opinion. As others have suggested, consult a qualified CPA. Having said that my views are:
If a 401k or other qualified plan has both pretax and after tax contributions, the prorate rule comes open to play to track and calculate taxes on distributions.
Backdoor Roth doesn’t avoid taxes, it is a way to bypass restrictions on ability to do a Roth due to having too much income.
When you convert from tIRA to Roth you pay taxes on the distribution taken from the tIRA (using prorata if the distribution contains both pre-tax and after-tax dollars)
If you made a non-deductible contribution to a qualified plan (e.g, tIRA, Simple IRA, SEP) in the current year or any previous year you file Form 8606 to track non-deductible and calculate the prorata percent for tax purposes.
Again these are just opinions and my understanding. Please see below.
Rollovers of after-tax contributions in retirement plans | Internal Revenue Service
Single Distribution Rule for Retirement Plans
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Pretty sure that you can’t have funds in traditional IRA, otherwise you pay tax because you have to do full Roth conversion. I’ve been doing backdoor for years because I didn’t start with any funds in a traditional.
See above. IRA rollovers from workplace 401k/403b's don't count. But yes, if you personally opened a traditional IRA yourself, the pro-rata is required.
We have been doing backdoor Roth contributions since it was approved by Congress during GWB's admin. Such a great loophole! :)
If anyone is interested in an alternative view on what is going on with the Fed and the dollar, this guy has been nailing it for almost two years:
tomluongo.me
The War for the Dollar is Already Over Part I - Gold Goats 'n Guns
And the Fed has won. In the words of Ambassador Kosh from the classic television series Babylon 5, “The avalanche has started. It is too late for the pebbles to vote.” For nearly the past two years I’ve been a nearly lone voice in the wilderness questioning the financial orthodoxy over the...
tomluongo.me
I did email my tax guy and am waiting for a response. If not I see him on Wednesday night. I was researching this last night and I think you are right. Step 6 on IRS form 8606 states this. One way around it would be for me to roll over the existing tIRA into a 401k. Problem for me is my work does not have one. I have an annuity through work and am unable to add to it.
This guy talks about it in here in step #5. He says another way around it is to get yourself a employee identification number and open your own 401k that way. Or he says if the account is small just convert it and pay the taxes now. Im leaning towards this. The account has around 40k in it and at some point I'm gonna have to pay taxes on it. Maybe it's wise to do it now? Would I be able to convert this whole amount to a Roth or am I limited by the yearly amounts? When I get my taxes done on Wednesday hopefully I get everything cleared up.
17 Backdoor Roth IRA Mistakes to Avoid | White Coat Investor
I thought the Backdoor Roth IRA was so simple nobody would screw it up. Boy was I wrong. Here's how to get it right and make contributions a simple task.
www.whitecoatinvestor.com
Here’s someone trying to tackle the outdated inflation measures we use.
whitepaper.truflation.com
Litepaper
whitepaper.truflation.com
A Twitter engineer says at least 2 bodyguards accompany Elon Musk around Twitter HQ — even to the restroom
The bodyguards are "tall" and "bulky" and look like they're out of a "Hollywood movie," a Twitter employee told the BBC.
They have UK at over 16%Here’s someone trying to tackle the outdated inflation measures we use.
Litepaper
More importantly - has anyone seen the Feb CPI projections that will come out next week (which is all that matters since the Fed just reacts to inflation data)?
CPI YoY inflation may drop a full point due to the base effect. Last year, energy and food skyrocketed due to Putin/Ukraine. Very different dynamics now. Use more accurate shelter data and MoM will be well negative once again.
Narratives change very quickly with the market. Plan accordingly.
CPI YoY inflation may drop a full point due to the base effect. Last year, energy and food skyrocketed due to Putin/Ukraine. Very different dynamics now. Use more accurate shelter data and MoM will be well negative once again.
Narratives change very quickly with the market. Plan accordingly.
And growth stocks have responded by moving upwards. Is the worst priced in?
You can convert the whole thing at once. Just be careful as that adds 40k to your earnings for the year. So, depending on what tax bracket you are in, or how close you are to hitting the next one, it could have a major implications. Also, if you get any salary driven breaks on things like real-estate taxes, ACA premiums, etc, you need to consider those as well. Not tax advice but your guy should be able to answer all of those questions for you based on your 2022 taxes.This guy talks about it in here in step #5. He says another way around it is to get yourself a employee identification number and open your own 401k that way. Or he says if the account is small just convert it and pay the taxes now. Im leaning towards this. The account has around 40k in it and at some point I'm gonna have to pay taxes on it. Maybe it's wise to do it now? Would I be able to convert this whole amount to a Roth or am I limited by the yearly amounts? When I get my taxes done on Wednesday hopefully I get everything cleared up.
17 Backdoor Roth IRA Mistakes to Avoid | White Coat Investor
I thought the Backdoor Roth IRA was so simple nobody would screw it up. Boy was I wrong. Here's how to get it right and make contributions a simple task.
Look for the Fed to change their narrative again very soon. Current Fed officials need support for new terms and other jobs:
WASHINGTON (Reuters) -The Federal Reserve should "take a breath" as it looks poised to push interest rates even higher than previously expected after recent data showed less progress than central bank officials had hoped for in lowering inflation, a White House official said on Tuesday.
Asked about Fed Chair Jerome Powell's comments earlier in the day that it would be appropriate to raise rates more than expected in the face of those setbacks, and possibly at larger steps, the White House official said it was important not to be over-reliant on a single month's data.
"The White House isn't going to interfere with the Fed's management," the official said. "But we're dealing with one month of data and people need to sit back and take a breath."
There is always a seesaw between growth and value funds. Perhaps that is what you're seeing today. I think the play is on the value side but I haven't totally baked it out yet.
Not a bad idea. I don't now how often they rebalance that ETF but it probably is somewhat frequently.
" Annual inflation is still at 4.7% so I see no data reasons to stop increasing rates" ..or something like that. What a fracking a hole.
It was over 9% and now half that trending down and his soft landing is quite possible but Mr. Hard Head just wants to keep fracking injecting constraints.
Would inflation at 4% right now be so bad if they stopped and the market and people's invested money jumped 15-20% ?
4% inflation is fine as long as wage increases are in the same ballpark. Remember, real inflation was only 3% at peak (since wages were up 6%). Seriously, all this nonsense for 3%? LOL!
Don't worry, all this will be over soon. Stick to your plan and buy at these discounts.
Health care is ripe for a run. PRHSX or VHT.....or RXL for a little extra fun.
Labor market is so tight. My son in supply chain is constantly getting calls for same job at significant salary increase.
Ringoes post office looking for help at $20/hr. Never seen them do that.
2 year yield at 5%
Don't get into a fight with you know who....
Don't get into a fight with you know who....
Agreed, just received my largest annual raise ever percentage wise in a non-promotion year
+1
Outstanding raise this year. My company also added an inflation kicker for employees lower on the comp scale. It was nice to surprise some of my younger team members with this. :)
Life is Good.
was due to energy polices of administration, the ukie war was cover for failed admin policies on fossil fuels
The raises are absurd. It will not help drive down inflation. My wife who sold her dermatology practice just received a 40% raise. This is insane.
There is absolutely nothing the Fed can do to address the worker shortage for many industries. Absolutely nothing. Only tech and automation will solve this problem. Guess where I'm investing? :)
The crypto market losses another player:
www.cnbc.com
Silvergate shutting down operations and liquidating bank
Silvergate Capital announced on Wednesday that it will wind down operations and liquidate Silvergate Bank.
Delayed earnings. Down 30% overnight. This has been a slow motion train wreck. Can't believe anyone was buying it with all the news that's been out the last few months.
Crypto bank Silvergate sinks after delaying annual report
Shares of Silvergate Capital Corp slumped 29% in premarket trading on Thursday, after the cryptocurrency-focused lender warned it was delaying its annual report and said it was evaluating its ability to operate as a going concern.www.reuters.com
Just announced liquidiation
The crypto market losses another player:
$162 stock less than 12 months ago…unbelievableSilvergate shutting down operations and liquidating bank
Silvergate Capital announced on Wednesday that it will wind down operations and liquidate Silvergate Bank.
