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Did the Bush tax cuts change anyone's FIRE plans?
Old 07-08-2008, 05:44 PM   #1
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Did the Bush tax cuts change anyone's FIRE plans?

Did the Bush tax cuts change anyone's FIRE plans?


dividends taxed at lower rates changed savings strategy


could retire on less than originally planned


the repeal of the tax cuts could delay retirement a year or two (or three...)

or something else not listed...
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Old 07-08-2008, 05:59 PM   #2
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The lower of dividends taxed coupled with the lower capital gains rate dramatically changed my portfolio composition. I shifted from growth orient stocks/funds to dividend paying individual stocks.

When ER in 99, my plan was to take a few years off than rejoin the work force in a lower paying, more fun job. The bear market of 2000-2002 increased my likehood of doing this. However the tax cut was a roughly a 10% increase in the value of my future income so it decreased the need to unretire.

If the bear market continues for another few years and Obama raising taxes on dividends/cap gains, I'd consider getting out of retirement.
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Old 07-08-2008, 08:38 PM   #3
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I did remember trying to capitalize on the lower dividend tax rate, and picked up some utility companies. I figured people would be willing to pay more for them, so I bought for cap gains, not just dividend, though that helped too. I held them for 3-4 years, and sold some for some profits when they appeared to top out, and still have some.

In the final analysis, during that period lots of stocks were going up, so I could have bought something else and had the same gains.
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Old 07-08-2008, 09:27 PM   #4
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No, but the capital gains tax rate went down from 28% to 20% under Clinton and that helped me BIG time, because it meant I could sell less company stock to reach my retirement goals. I really wasn't that eager to take profits on my stock with a 28% tax rate, but somehow the 20% rate made it much more palatable.

Then, after retiring, Bush provided more icing on the cake - 18%, then in a TOTAL surprise, 15% cap gains rates with the dividend tax cut. I really didn't expect that.

So, I have taken advantage.

And now it looks like things will reset to the higher rates - at least to 20%.

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