Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 01-18-2015, 11:23 AM   #41
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by LARS View Post
Needless-to-say, this sort of "planning" is fraught with much inaccuracy. And reality is if I thought for example $2 million was the number I'd add a nice cushion just to be safe. After all, that is what we all do on this site!

...
Agreed. Even the best planning can be disrupted by the unforeseen (asteroids), but a "nice cushion just to be safe" is a great if not imperfect insurance policy.

Speaking of unforeseen events (depending on degree of crystal ball cloudiness), presented without comment:

Obama Proposes New Tax Hikes on Wealthy to Aid Middle Class - Bloomberg

From the article:

Quote:
He would increase the top tax rate on capital gains and dividends to 28 percent from 23.8 percent. The rate was 15 percent when Obama took office in 2009, meaning that heís proposing to almost double it over his two terms in office.
__________________

__________________
Options is offline  
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-18-2015, 11:43 AM   #42
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,608
He's also proposing eliminating the step-up basis on inheritances. Limiting the step up to 500k on a primary residence and 200k in investments. This might be a big factor for those who do seek to leave an inheritance.
__________________

__________________
growing_older is offline  
Old 01-18-2015, 11:46 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,288
Quote:
Originally Posted by growing_older View Post
He's also proposing eliminating the step-up basis on inheritances. Limiting the step up to 500k on a primary residence and 200k in investments. This might be a big factor for those who do seek to leave an inheritance.
This is just posturing.

No way will the House and Senate pass this. These sorts of changes didn't even get enough support when the administration had the House and Senate.

Stop worrying... for now.

-ERD50
__________________
ERD50 is offline  
Old 01-18-2015, 12:03 PM   #44
Recycles dryer sheets
 
Join Date: Apr 2011
Location: Castro Valley
Posts: 402
Quote:
Originally Posted by Meadbh View Post
I would rather have money left over when I kick the bucket than risk becoming destitute. I am not going to make any attempt to "spend it down" until at least 5 years after ER, that is, until the retirement risk period is over I am sticking to ~3% WR. If things look good 5 years in, I will loosen the purse strings a little.
I feel exactly the same way. I'm 5 1/2 years into ER and in another 5 I'll start SS. At that time I'll look into significantly increasing spending.
__________________
jkern is offline  
Old 01-18-2015, 12:43 PM   #45
Thinks s/he gets paid by the post
 
Join Date: Apr 2005
Location: Midwest
Posts: 1,573
Quote:
I feel exactly the same way. I'm 5 1/2 years into ER and in another 5 I'll start SS. At that time I'll look into significantly increasing spending.
Whew! I thought I was the only one. All the projections indicate I am free and clear to up my spending, considerably. But I always end up saying... Better wait till I actually start getting socials sec.
__________________
razztazz is offline  
More difficult then you would think... spending down
Old 01-18-2015, 07:03 PM   #46
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 928
More difficult then you would think... spending down

Quote:
Originally Posted by meierlde View Post
As gcgang points out you can buy annunities and have nothing left at death (better buy a funeral in advance though or your survivors will be stuck paying for it). But that then is essentially making a bet with the insurance company (exactly the opposite bet of life insurance) that you will live longer than the company things, just like life insurance is essentially a bet you will die sooner.

The other thing the income annuity does is remove uncertainty.

We all talk about safe withdrawal rate, consensus being 4% is OK. Then we worry about market declines, maximum drawdown, or, as the OP here, leaving a bigger than desired remainder.

Using Vanguard immediate annuity quotes, assume a 65 year old with $2mm.

Almost 5% can be generated with $1.4mm ($8k/mo or 4.8%), leaving $600k. Then, income increases of $1k/mo in 5 and 10 years can be secured with another $167k, leaving $433k in reserves.

Yes, ALL uncertainty has not been removed, inflation being the major risk not addressed. But KNOWING there is $8-10k a month for the rest of your life, might be appealing to some.


Sent from my iPad using Early Retirement Forum
__________________
In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is offline  
Old 01-18-2015, 08:23 PM   #47
Thinks s/he gets paid by the post
 
Join Date: Jan 2008
Posts: 1,495
Quote:
Originally Posted by ERD50 View Post
This is just posturing.

No way will the House and Senate pass this. These sorts of changes didn't even get enough support when the administration had the House and Senate.

Stop worrying... for now.

-ERD50
I view them as smoke signals from the upcoming 2016 elections. Discussions regarding taxes are inevitable, sooner rather later:

Inside Obama's middle class tax plan | PBS NewsHour

From the article:

Quote:
And the two things that the parties have agreed on — and you have seen this in a number of potential Republican presidential candidates, you have heard it from former Secretary of State Hillary Clinton, and the White House is really pressing on this issue — is that the middle class is need — in need of help, and that wages are stagnant, and while GDP is growing and unemployment rate is at new lows, the middle class is still really struggling and requires some targeted measures to try and build them up.

And so what you’re going to hear the White House and Democrats do when they get with these measures, this package that the president is going to roll out on Tuesday in his State of the Union address, is put the ball in Republicans’ court to say, OK, well, what are your proposals? What do you — what do you want to do? And if you don’t support this, then what do you support?

And so it’s the — it’s designed to, even if it doesn’t pass, move the debate along to where the two sides are having to stake out their territory ahead of the 2016 election.[Emphasis added]
__________________
Options is offline  
Old 01-18-2015, 09:05 PM   #48
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,473
He might be trying to return it to the level where it was historically. The rate was 25% under Eisenhower, Kennedy and most of Johnson's administration. Under Nixon it really jumped, came down a bit under Carter, then way down under Reagan, but under Reagan went back up to 28%. It dropped significantly at the end of the Clinton Administration, but under Bush, along with the other tax cuts, it went to 15% where it has remained, while the national debt soared.

Historical Capital Gains and Taxes

Excessive cutting of taxes didn't do the national debt any good. Unless we're willing to cut the 1/2 trillion in defense spending or the $141 billion in education spending, or cut Medicare, at some point the government needs to pay its way. I'd rather move toward a balanced budget and pay some taxes on the free money my money is making for me then have the government borrow money to pay it's bills.
__________________
EastWest Gal is online now  
Old 01-18-2015, 09:29 PM   #49
Full time employment: Posting here.
gcgang's Avatar
 
Join Date: Sep 2012
Posts: 928
Quote:
Originally Posted by EastWest Gal View Post
He might be trying to return it to the level where it was historically. The rate was 25% under Eisenhower, Kennedy and most of Johnson's administration. Under Nixon it really jumped, came down a bit under Carter, then way down under Reagan, but under Reagan went back up to 28%. It dropped significantly at the end of the Clinton Administration, but under Bush, along with the other tax cuts, it went to 15% where it has remained, while the national debt soared.

Historical Capital Gains and Taxes

Excessive cutting of taxes didn't do the national debt any good. Unless we're willing to cut the 1/2 trillion in defense spending or the $141 billion in education spending, or cut Medicare, at some point the government needs to pay its way. I'd rather move toward a balanced budget and pay some taxes on the free money my money is making for me then have the government borrow money to pay it's bills.

Capital gains have not remained at 15%, current max rate is 23.8%, I think.

The national debt hasn't soared due to lack of capital gains taxes. It's the economy, _____. Table below shows debt soaring in 2009 due to significant drop in revenues (lousy economy) and increased outlays. In like manner, only time budget balanced was 1998-9 with a booming economy.

http://www.taxpolicycenter.org/taxfa....cfm?Docid=200



Sent from my iPad using Early Retirement Forum
__________________
In theory, there's no difference between theory and practice. In practice, there is. YB
gcgang is offline  
Old 01-19-2015, 12:50 PM   #50
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,487
Thanks for an interesting discussion.
.
.

__________________

__________________
MichaelB is online now  
Closed Thread


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
If Money Doesn't Buy you Happiness, Then You Probably Aren't Spending It Right Major Tom FIRE and Money 20 04-28-2014 08:37 AM
When to do you start purposely spending down capital? LARS FIRE and Money 82 08-17-2010 10:56 AM
Few more months, then riding the freedom train... Spartacus Hi, I am... 9 10-16-2009 08:00 AM
Are you keeping a low profile in these difficult economic times? FIREd FIRE and Money 156 03-27-2009 07:54 AM
AF Sergeant...18 years in...6 more and then ER cmonkjr Hi, I am... 17 08-30-2007 02:07 PM

 

 
All times are GMT -6. The time now is 06:14 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.