| To: MathematicalInvestor who wrote (32654) | 4/12/2024 8:59:40 AM | | From: J.B.C. | | | | | Greetings. Not necesselsarilly a dividend growth investor here. But in 2021 when I retired I did buy a basket of Dividend stocks (5 stocks is all). Thru my technical work, 4 have been sold but I still own IRM from that time and with dividend reinvestment has paid off (~100% gain). I had OKE originally, but I had to sell when it technically broke down. Repurchased in Nov ‘23. Most of my funds are currently in equities at this time. |
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| To: Po'boy who wrote (32653) | 4/17/2024 6:38:17 AM | | From: robert b furman | | | | Hi Po'boy,
You did say debt free.
Congrats you are well on your way to accumulating wealth.
Now know yourself.
Do you want speculation or slower methodical wealth accumulation?
Most want to be able to sleep at night. Knowing where that threshold is can be a learning experience all by itself.
Welcome to SI.
Bob |
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| To: Po'boy who wrote (32653) | 4/17/2024 10:41:57 AM | | From: Kirk © | | | | Welcome to the group.
One thought is look into ROTH IRAs. I stopped contributing to my regular IRA once I started working for myself and didn't get an employee match. IF you can afford it, contributing after tax money to a ROTH is better in my opinion.
Often you take money out of an IRA in retirement and the income can push you into a level where your Social Security payments are taxed. Get even more successful as many of us here have, and the required RMDs push you into higher Medicare brackets where the government punishes us for saving rather than spending our money when we made it.
Even if you don't reach the levels to lose benefits, Money taken out of regular IRAs are taxed as regular income but if you invest in index funds or individual stocks with taxable funds, then the income years later is taxed at capital gains rates. IF your total income in retirement is low enough, there is no Fed tax on long-term capital gains.
From irs.gov
A capital gains rate of 0% applies if your taxable income is less than or equal to:
- $44,625 for single and married filing separately;
- $89,250 for married filing jointly and qualifying surviving spouse; and
- $59,750 for head of household.
Don't forget that as seniors, we get a bonus to the standard deduction so the total income we can earn and pay zero capital gains tax is significantly higher.
irs.gov
Additional standard deduction – You're allowed an additional deduction if you're age 65 or older at the end of the tax year.
Even if you are successful with your regular IRA and RMDs plus SS push you above the 0% rate, your capital gains tax rate is still significantly lower than the fixed income rate
Again From irs.gov
A capital gains rate of 15% applies if your taxable income is:
- more than $44,625 but less than or equal to $492,300 for single;
- more than $44,625 but less than or equal to $276,900 for married filing separately;
- more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse; and
- more than $59,750 but less than or equal to $523,050 for head of household.
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| To: Kirk © who wrote (32657) | 4/17/2024 4:42:09 PM | | From: Don01022 | | | | *****more than $89,250 but less than or equal to $553,850 for married filing jointly and qualifying surviving spouse*****
If your income is $99,250, is it correct to say that you would only pay the cap gain tax on the $10,000 (the amount over the $89,250 ?? |
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| To: Don01022 who wrote (32658) | 4/17/2024 4:50:40 PM | | From: Kirk © | | | | | I don't give tax advice or answer those specific questions... don't want to get in trouble nor become the unofficial unpaid tax advisor but my reading of the rule says if you enter that data into Turbotax to check, that would probably be the result. I'd check with a pro or buy Turbotax and see for sure. |
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