Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Steps/Moves: Lower Tax Rates for Next 4 Years
Old 11-10-2016, 09:50 AM   #1
Recycles dryer sheets
 
Join Date: Jan 2008
Location: chicago suburbs
Posts: 240
Steps/Moves: Lower Tax Rates for Next 4 Years

Based on the election promises, I would expect that tax rates will be going down for the majority of us. As a result I was wondering what steps might be good to take assuming that rates will be lower for at least 2+ years? Assuming Retirement in 2017 and/or 2018?

Roth conversion?
Capital Gains?
Deferred Compensation?
__________________

__________________
capjak is offline   Reply With Quote
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 11-10-2016, 09:54 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,320
If income tax rates are going to drop (which is anything but certain of course): postpone Roth conversions, take capital losses now, delay income.
__________________

__________________
GrayHare is offline   Reply With Quote
Old 11-10-2016, 09:57 AM   #3
Full time employment: Posting here.
Al in Ohio's Avatar
 
Join Date: Jun 2013
Location: Columbus OH
Posts: 688
I highly doubt we see any changes. Most election promises are not kept unless you are an interest group who can afford a lobbyist to keep the pressure up.
__________________
Ohio INTJ ENG ER Hopeful
Al in Ohio is offline   Reply With Quote
Old 11-10-2016, 09:59 AM   #4
Moderator
rodi's Avatar
 
Join Date: Apr 2012
Location: San Diego
Posts: 8,738
I will start the planning and speculation when the legislation is being put up for a vote in the house or senate. Until then it is vapor-law.
__________________
Retired June 2014. No longer an enginerd - now I'm just a nerd.
micro pensions 7%, rental income 18%
rodi is offline   Reply With Quote
Old 11-10-2016, 10:29 AM   #5
Recycles dryer sheets
 
Join Date: Jan 2008
Location: chicago suburbs
Posts: 240
Agree until the law is implemented/voted on it would be hard to predict. I only have a 2 year window to retirement, so maybe do nothing as elections/choices for delayed comp are determined in December for the next year. 401k changes can occur throughout the year.

Also I am fortunate to have a pension with several choices (increased payments until 62, 100% joint, 50% etc...) finding the decisions very complex even without any potential tax changes.

My assumption has always been as the debt increases, retirement SS increases, taxes will have to increase. Thus making a Roth conversion a priority, i.e. taxes in future will be higher (remember I have a pension so my tax esp with RMD may be similar to pre retirement I believe).
__________________
capjak is offline   Reply With Quote
Old 11-10-2016, 10:32 AM   #6
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,633
Quote:
Originally Posted by rodi View Post
I will start the planning and speculation when the legislation is being put up for a vote in the house or senate. Until then it is vapor-law.
+1000
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-10-2016, 10:47 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 8,504
Jason Zweig hit the nail on the head in his WSJ column yesterday. The whole thing is worth reading, but behind a paywall so I'll just quote a few bits:

Quote:
The word “clearly” is the first reflex of prediction scoundrels pretending that they foresaw what would happen in order to cover up their abject failure to forecast what did happen.
...
the insidious word “clearly” makes you nod in agreement, creating the sense that you, too, have touched that comforting crystal ball that the pundit is holding.
...
Now more than ever, successful long-term investing is about self-control. The same punditocracy that predicted that Secretary Clinton would “clearly” win is no more likely, just one day later, to know what will “clearly” happen in the economy.
__________________
braumeister is online now   Reply With Quote
Old 11-10-2016, 10:52 AM   #8
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,269
Quote:
Originally Posted by braumeister View Post
Jason Zweig hit the nail on the head in his WSJ column yesterday. The whole thing is worth reading, but behind a paywall so I'll just quote a few bits:
Clearly

Quote:
Originally Posted by rodi View Post
I will start the planning and speculation when the legislation is being put up for a vote in the house or senate. Until then it is vapor-law.
Quote:
Originally Posted by W2R View Post
+1000
+1001
__________________
MichaelB is online now   Reply With Quote
Old 11-10-2016, 02:20 PM   #9
Thinks s/he gets paid by the post
DrRoy's Avatar
 
Join Date: Dec 2015
Location: Michigan
Posts: 1,685
I would not do anything until the change is on the books.
__________________
"The mountains are calling, and I must go." John Muir
DrRoy is offline   Reply With Quote
Old 11-10-2016, 02:29 PM   #10
Full time employment: Posting here.
MuirWannabe's Avatar
 
Join Date: Oct 2009
Posts: 667
Sometimes threads like this just seem like a veiled attempt to want to talk politics.
__________________
“Of all the paths you take in life, make sure a few of them are dirt.” John Muir
MuirWannabe is offline   Reply With Quote
Old 11-10-2016, 04:34 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,548
If income taxes go any lower, then the IRS will be paying me to make my tax rate go negative. I just don't see that happening.
__________________
LOL! is offline   Reply With Quote
Old 11-10-2016, 04:51 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Mar 2009
Posts: 1,408
I can't speculate so I'm sticking to my plan of maxing out the 15% bracket with IRA distributions. At this stage I'm going the CD ladder route with extra cash while maintaining my 40/60 equity/bond allocation.
__________________
Retired in 2016. Living off dividends / interest and a mini pension. Freedom.
foxfirev5 is offline   Reply With Quote
Old 11-10-2016, 06:03 PM   #13
Recycles dryer sheets
 
Join Date: Jan 2008
Location: chicago suburbs
Posts: 240
Quote:
Originally Posted by MuirWannabe View Post
Sometimes threads like this just seem like a veiled attempt to want to talk politics.
I almost put a disclaimer in stating please totally disregard my question and talk politics but who knew it wasn't even needed....
__________________
capjak is offline   Reply With Quote
Old 11-10-2016, 07:12 PM   #14
Recycles dryer sheets
 
Join Date: Oct 2011
Posts: 399
If tax rates move substantially, those still working need to reconsider their deferred comp approaches.
__________________
Luck is when Preparation meets Opportunity.
Closet_Gamer is offline   Reply With Quote
Old 11-10-2016, 11:53 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,523
Quote:
Originally Posted by LOL! View Post
If income taxes go any lower, then the IRS will be paying me to make my tax rate go negative. I just don't see that happening.
It happened to me for a few years (kids were involved).
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 11-11-2016, 10:30 AM   #16
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,633
MODERATOR NOTICE


In the days immediately following the election the moderator team has deliberately overlooked a number of otherwise unacceptable political comments to allow members to express their emotions. That time has passed.

Effective immediately, strict enforcement of our Community Rules will be reinstated. Posting political comments will result in the deletion of the entire post. Repeated violations of our Community Rules will result in the loss of posting privileges on E-R.org
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-11-2016, 12:11 PM   #17
Full time employment: Posting here.
 
Join Date: Jan 2013
Posts: 996
I don't think we will know what any of the new administration's policies, including tax policies, will be until a cabinet is chosen and we start hearing from them and the congressional leadership. My concern right now is the increasing interest rates that will affect the economy and our wallets. Changes I make today are in reaction to that, not what may or may not happen politically.
__________________
Another Reader is offline   Reply With Quote
Old 11-11-2016, 02:19 PM   #18
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,354
Quote:
Originally Posted by LOL! View Post
If income taxes go any lower, then the IRS will be paying me to make my tax rate go negative. I just don't see that happening.
Tax credits can do that
__________________
Hamlet is offline   Reply With Quote
Old 11-11-2016, 04:12 PM   #19
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 2,979
I will not fire until I see the whites of their eyes...

If and when changes happen, make your changes then. Have a list of options. Capital gains harvesting, Roth conversions, selling RE, etc.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is online now   Reply With Quote
Old 11-11-2016, 04:20 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,934
I don't anticipate a meaningful lowering of my tax rate...
__________________

__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Reply


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
Would like to Retire in 5 years- I need help with next investment steps Foodeefish FIRE and Money 7 12-14-2005 08:12 AM
Diversifying Doesn't Lower Risk, But It Does Lower Potential Gain justin FIRE and Money 44 11-05-2005 05:16 PM

 

 
All times are GMT -6. The time now is 07:05 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.