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View Poll Results: What % of your networth do you still have to pay tax on?
<10% 12 11.32%
10-20 5 4.72%
20-30 17 16.04%
30-40 13 12.26%
40-50 10 9.43%
50-60 12 11.32%
60-70 11 10.38%
70-80 13 12.26%
80-90 6 5.66%
>90% 7 6.60%
Voters: 106. You may not vote on this poll

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Old 12-11-2016, 09:39 AM   #21
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Originally Posted by audreyh1 View Post
...Do you mean what unrealized gains in your net worth will you eventually have to pay taxes on?
Yes, that's what the OP meant, when he mentioned "unrealized capital gains/loss, tax-deferred income from I-bonds", etc...

I've got to sit down to figure this one out. The amount that is yet to be taxed is going to be higher than what another thread asks about the values of tax-advantage accounts, because there are unrealized cap gains in after-tax accounts and interests in I-Bonds to be added to the full values of IRA and 401k.
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Old 12-11-2016, 10:23 AM   #22
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About half.... 6% unrealized gains on taxable account investments and the rest tax-deferred accounts.
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Old 12-11-2016, 10:48 AM   #23
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Originally Posted by FIREd View Post
For me, the calculation was pretty easy because my investments are very basic.

value of pretax 401K and IRAs + unrealized taxable capital gains + tax-deferred interests on I-bonds = ~24% of total assets are still potentially taxable (though I don't expect to pay much in income tax on it).

It was an interesting exercise.
Exactly the same situation here, and by coincidence the calculation also comes out to 24%.
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Old 12-11-2016, 10:48 AM   #24
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Originally Posted by audreyh1 View Post
Do you mean what unrealized gains in your net worth will you eventually have to pay taxes on? Assuming these aren't passed on to heirs and receive a stepped up basis.
Correct. In the OP, you will see examples of what portion of what types of accounts should be counted in the numerator. Denominator is your NW.
The logic is that a person with net worth 1M may have close to 90% of their net worth in 401k and unrealized capital gains. In which case they have to do a lot more tax planning to access that. OTOH there are those who may have 1M NW but most of it in Roth and bank CDs and their % of NW that still needs to go through the tax man will be negligible.
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Old 12-11-2016, 10:51 AM   #25
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The amount that is yet to be taxed is going to be higher than what another thread asks about the values of tax-advantage accounts, because there are unrealized cap gains in after-tax accounts and interests in I-Bonds to be added to the full values of IRA and 401k.
You mean in your case? Because for others it may be lower because of Roth.
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Old 12-11-2016, 10:56 AM   #26
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I happen to keep track of unrealized cap gains in each MF's spreadsheet so all I had to do was to add them up for the 4 funds in the taxable accounts. Then I added the total value of my tIRA and divided the sum by my NW. Using 11/30/2016 figures, the latest ones I have (so it doesn't include this month's run-up), I get 34%.


At the moment I viewed the survey results (46 votes), it's amazing how evenly spread out the responses are, 4-6 votes in all brackets except for the two lowest ones (2 each).
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Old 12-11-2016, 11:05 AM   #27
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I happen to keep track of unrealized cap gains in each MF's spreadsheet so all I had to do was to add them up for the 4 funds in the taxable accounts. Then I added the total value of my tIRA and divided the sum by my NW. Using 11/30/2016 figures, the latest ones I have (so it doesn't include this month's run-up), I get 34%.
I admit I don't track unrealized capital. I'm realizing that this forum is made up of people who are even more analytical than me.
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Old 12-11-2016, 11:23 AM   #28
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Even if you don't track it if you use Vanguard you can easily look it up. Probably other service providers too I suspect.
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Old 12-11-2016, 11:31 AM   #29
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I simply totaled all of my tax deferred accounts and did a simple percentage calculation. I did not include unrealized cap gains in my taxable accounts...because who knows what they will really be! Even if I added that to the mix, it wouldn't have moved the needle all that much and still puts me in the category I voted.

So...based on just investable assets it's 22%
Based on total net worth it's 13.9% **
** except some of this net worth is an asset in a family business and I pay tax on a K1 each year...so I'm not sure how to factor that in. I suppose I categorize that as income and don't take it into this calculation. I added into net worth only the baseline "estate value".

I have far less in deferred accounts than in taxable accounts I've already paid tax on.
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Old 12-11-2016, 11:43 AM   #30
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How are we doing...why am I still working?

1.7M non taxable [cash, Roths, cost basis]
485k deferred tax
550 taxable
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Old 12-11-2016, 12:42 PM   #31
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You mean in your case? Because for others it may be lower because of Roth.
I never lumped in Roth accounts with IRA & 401k. Roth money is really golden.

That said, I only have about 7% of investable assets in Roth, not being able to convert much.
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Old 12-11-2016, 12:52 PM   #32
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39% , but will drop to 33% after 2017 conversion to Roth.
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Old 12-11-2016, 03:57 PM   #33
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Originally Posted by pixelville View Post
Correct. In the OP, you will see examples of what portion of what types of accounts should be counted in the numerator. Denominator is your NW.
The logic is that a person with net worth 1M may have close to 90% of their net worth in 401k and unrealized capital gains. In which case they have to do a lot more tax planning to access that. OTOH there are those who may have 1M NW but most of it in Roth and bank CDs and their % of NW that still needs to go through the tax man will be negligible.
Well - that can be all over the map. If someone bought assets at very low prices and they appreciated considerably, maybe. But if someone hasn't held assets that long and/or they've been paying out dividends and distributions over many years, and occasionally rebalancing, maybe the basis isn't that much lower than the current value.

I don't think I'll be figuring this out. Too many assets spread over too many accounts......
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Old 12-11-2016, 04:31 PM   #34
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I don't think I'll be figuring this out. Too many assets spread over too many accounts......
My attitude as well! Who is paying me for this work and what is the answer worth? I imagine the answers will come from those with relatively simple portfolios. So the sample will be skewed.
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Old 12-11-2016, 04:51 PM   #35
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I do not know exactly to the 1%, but I have an approximation to the 10%.

It is important not to draw down the after-tax accounts too much, lest you need a lot of money in a hurry. Buying a home with cash is an extreme situation, but I like to have a good chunk of tax-free money on hand. I have always wanted a lot of room to maneuver, a lot of options.
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Old 12-12-2016, 07:20 AM   #36
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For me, not too hard since I know the balances in each account and account type. And unrealized gains are listed by the brokerage. My number was 57% including home. If you just look at investments, it was 70%.

This was interesting as I new my untaxed percentage was on this high side, but had not calculated (not drawing money from investments yet)
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Old 12-12-2016, 07:25 AM   #37
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For me, the calculation was pretty easy because my investments are very basic.
Our investments are fairly complex but the calculation was even easier than yours: I stuck my thumb up & said that's about right.
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Old 12-12-2016, 08:12 AM   #38
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My attitude as well! Who is paying me for this work and what is the answer worth? I imagine the answers will come from those with relatively simple portfolios. So the sample will be skewed.
Agree. My portfolio is virtually all in taxable accounts. I know my tax basis so also know my imbedded gains and tax rate on cap gains. Probably a good thing to know especially if you have plans to sell down. Probably too complicated for some people to calculate frequently though.
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Old 12-12-2016, 08:25 AM   #39
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Interesting question. In our case, the percentage is around 37%. About 3/4 of the money that hasn't been taxed is in 401Ks and traditional IRAs.

Also interesting that it was requested as percentage of net worth, instead of just investments.
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Old 12-12-2016, 08:45 AM   #40
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When I do my net worth calculations, I calculate the market value, cost basis and tax liability on the unrealized gains so my Net Worth is after paying taxes on unrealized gains. Thus the percentage of my net worth that is taxable is 0%. I assumed everyone did it this way.....yeah yeah never assume. if you don't calculate this way, how can you figure out your annual withdrawal rate? A person withdrawing 3% of a money market annually is much different than a person withdrawing 3% of an 401K that was never taxed.
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