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#1
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7.4 Trillion! 7.4!!!!
"Dave" wrote in message
... On Tue, 25 Nov 2008 09:27:38 -0800, "Capt. JG" said: it isn't unless I sell or the company goes worthless, after which I can then call it a loss. You just keep telling yourself that. You'll sleep better. So, you're claiming that it's a loss, yet you haven't yet substantiated that with one thing. I sleep just fine. -- "j" ganz @@ www.sailnow.com |
#2
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7.4 Trillion! 7.4!!!!
On Tue, 25 Nov 2008 11:02:48 -0800, "Capt. JG"
wrote: "Dave" wrote in message .. . On Tue, 25 Nov 2008 09:27:38 -0800, "Capt. JG" said: it isn't unless I sell or the company goes worthless, after which I can then call it a loss. You just keep telling yourself that. You'll sleep better. So, you're claiming that it's a loss, yet you haven't yet substantiated that with one thing. I sleep just fine. All in the timing. Got a buddy about to retire who will roll his mostly equity 401k into FDIC insured IRA's to lock in his future retirement funds. Can't get that money out of the 401k until he retires. He says he'll get less than the contributions that came out of his pay checks. There's a reason the guv put a 1.00 par guarantee on 401k money market funds as one of the first acts of the current bailouts. Otherwise the entire 401k rationale could be destroyed. There would be no safe haven for your 401k retirement funds. I thought 401k's would be kaput before I heard of the guarantee. Always resented the non-free market nature of the 401k system. For fiscal conservatives like me, the money markets weren't competitive with what was available in the open market. Of course I'm only talking about my company's 401k offerings, but that fact is just more reinforcement of my notion. --Vic |
#3
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7.4 Trillion! 7.4!!!!
"Vic Smith" wrote in message
... On Tue, 25 Nov 2008 11:02:48 -0800, "Capt. JG" wrote: "Dave" wrote in message . .. On Tue, 25 Nov 2008 09:27:38 -0800, "Capt. JG" said: it isn't unless I sell or the company goes worthless, after which I can then call it a loss. You just keep telling yourself that. You'll sleep better. So, you're claiming that it's a loss, yet you haven't yet substantiated that with one thing. I sleep just fine. All in the timing. Got a buddy about to retire who will roll his mostly equity 401k into FDIC insured IRA's to lock in his future retirement funds. Can't get that money out of the 401k until he retires. He says he'll get less than the contributions that came out of his pay checks. There's a reason the guv put a 1.00 par guarantee on 401k money market funds as one of the first acts of the current bailouts. Otherwise the entire 401k rationale could be destroyed. There would be no safe haven for your 401k retirement funds. I thought 401k's would be kaput before I heard of the guarantee. Always resented the non-free market nature of the 401k system. For fiscal conservatives like me, the money markets weren't competitive with what was available in the open market. Of course I'm only talking about my company's 401k offerings, but that fact is just more reinforcement of my notion. --Vic You're right Vic. It's all about timing. One of the major problems is that older people are forced to withdraw money, which means they do take a loss. This needs to be addressed in my and others' opinions. -- "j" ganz @@ www.sailnow.com |
#4
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7.4 Trillion! 7.4!!!!
"Dave" wrote in message
... On Tue, 25 Nov 2008 14:35:08 -0800, "Capt. JG" said: One of the major problems is that older people are forced to withdraw money, which means they do take a loss. This needs to be addressed Well, at least you got it partly right. Your conclusion is incorrect, of course, if one accepts the proposition that there is no loss until assets are sold. The distribution rules are designed to make sure Uncle gets his cut. They require that once the taxpayer reaches 70 1/2 a minimum amount of assets be taken from the 401K each year and put somewhere else, and taxes are owed when the assets are taken out of the 401K. But there is no requirement that the assets be sold. They can be transferred to a taxable account, and held in that account however long you like. The problem is not the requirement to withdraw money, but the fact that the amount that must be withdrawn is based on the balance as of the close of the prior year. So if the total in the account is halved following the end of the last year, the withdrawal requirement of 5% becomes 10% of the current value of the account solely by operation of the formula. That wasn't what was intended when the Congress critters decided it was critical for Uncle Sam get its cut from all those rich oldsters. If the assets are "taken out" and the taxes are paid, then what becomes of the reduced assets is a loss. It's nice to know that you've finally agreed with me. -- "j" ganz @@ www.sailnow.com |
#5
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7.4 Trillion! 7.4!!!!
Dave wrote:
On Tue, 25 Nov 2008 15:38:10 -0800, "Capt. JG" said: If the assets are "taken out" and the taxes are paid, then what becomes of the reduced assets is a loss. Why? You haven't sold them. Under your theory, no sale, no loss. And what's with this "reduced assets?" You moved $10,000 in assets, let's say, from your 401K to a taxable account at your broker's, wrote a check from your checking account at the bank for the taxes on that $10,000, and continued to hold the $10,000 in assets in your account at the broker's. No loss, right? Another way of looking at it is if you must withdraw say 1000 a year from you 10000 retirement fund to live. Your 1000 is 10% of you retirement account. If the market drops by half you must now with draw 20% of the account to get the same 1000 required to live. If the market has historically returned 10% per year the return on the first scenario will match what you need to live. In the second scenario the return is only half of the 20% you need to with draw. In this scenario your retirement fund runs out in less than 10 years. Who is going to support these people when their retirement is gone. |
#6
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7.4 Trillion! 7.4!!!!
"Keith nuttle" wrote in message
... Dave wrote: On Tue, 25 Nov 2008 15:38:10 -0800, "Capt. JG" said: If the assets are "taken out" and the taxes are paid, then what becomes of the reduced assets is a loss. Why? You haven't sold them. Under your theory, no sale, no loss. And what's with this "reduced assets?" You moved $10,000 in assets, let's say, from your 401K to a taxable account at your broker's, wrote a check from your checking account at the bank for the taxes on that $10,000, and continued to hold the $10,000 in assets in your account at the broker's. No loss, right? Another way of looking at it is if you must withdraw say 1000 a year from you 10000 retirement fund to live. Your 1000 is 10% of you retirement account. If the market drops by half you must now with draw 20% of the account to get the same 1000 required to live. If the market has historically returned 10% per year the return on the first scenario will match what you need to live. In the second scenario the return is only half of the 20% you need to with draw. In this scenario your retirement fund runs out in less than 10 years. Who is going to support these people when their retirement is gone. You've identified the problem, basically. Now, I don't know your situation, but for me, I don't have to touch anything. I can wait out the return in value without taking a loss, since nothing in my portfolio will change. Who's going to support these people? The taxpayers of course! We already do that for millions of people. We do that via programs like welfare, medicare, social security, etc. It's a good and bad thing. It's good because we (well, most of us) care about our fellow citizens. It's a bad thing (especially now) because the price is so high and we can't continue forever at such a high price. We need to find solutions, and claiming, as Dave does, that it's solely the function of the private sector is a fantasy at best. The ultimate "private sector" scenario transfers all social programs, including police and fire to those who can afford them, which is a non-serious argument. -- "j" ganz @@ www.sailnow.com |
#7
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7.4 Trillion! 7.4!!!!
"Dave" wrote in message
... On Tue, 25 Nov 2008 17:46:14 -0800, "Capt. JG" said: The ultimate "private sector" scenario transfers all social programs, including police and fire to those who can afford them, which is a non-serious argument. You do indeed love straw men, Jon. Totally not strawman argument. Those services are part of the social safety net. Do you dispute this? If not, then why is privatizing them wrong? You seem to think that social security is a bad thing. -- "j" ganz @@ www.sailnow.com |
#8
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7.4 Trillion! 7.4!!!!
On Tue, 25 Nov 2008 20:34:20 -0500, Keith nuttle
wrote: Dave wrote: On Tue, 25 Nov 2008 15:38:10 -0800, "Capt. JG" said: If the assets are "taken out" and the taxes are paid, then what becomes of the reduced assets is a loss. Why? You haven't sold them. Under your theory, no sale, no loss. And what's with this "reduced assets?" You moved $10,000 in assets, let's say, from your 401K to a taxable account at your broker's, wrote a check from your checking account at the bank for the taxes on that $10,000, and continued to hold the $10,000 in assets in your account at the broker's. No loss, right? Another way of looking at it is if you must withdraw say 1000 a year from you 10000 retirement fund to live. Your 1000 is 10% of you retirement account. If the market drops by half you must now with draw 20% of the account to get the same 1000 required to live. If the market has historically returned 10% per year the return on the first scenario will match what you need to live. In the second scenario the return is only half of the 20% you need to with draw. In this scenario your retirement fund runs out in less than 10 years. Who is going to support these people when their retirement is gone. Sounds like a very good argument for keeping Social Security as strong as possible. |
#9
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7.4 Trillion! 7.4!!!!
"Dave" wrote in message
... On Tue, 25 Nov 2008 15:38:10 -0800, "Capt. JG" said: If the assets are "taken out" and the taxes are paid, then what becomes of the reduced assets is a loss. Why? You haven't sold them. Under your theory, no sale, no loss. And what's with this "reduced assets?" You moved $10,000 in assets, let's say, from your 401K to a taxable account at your broker's, wrote a check from your checking account at the bank for the taxes on that $10,000, and continued to hold the $10,000 in assets in your account at the broker's. No loss, right? ?? If I had stock that was worth $100K, then, after the drop in stock market, it would be worth say 1/2 that; however, no actual loss happens unless I move the reduced assets to another set of instruments. If I do that, I have built in the loss. If I don't move them, and the stock market comes back, nothing changes except time. Are you really confused or just trying to cover yourself? -- "j" ganz @@ www.sailnow.com |
#10
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7.4 Trillion! 7.4!!!!
"Capt. JG" wrote in message easolutions... ?? If I had stock that was worth $100K, then, after the drop in stock market, it would be worth say 1/2 that; however, no actual loss happens unless I move the reduced assets to another set of instruments. If I do that, I have built in the loss. If I don't move them, and the stock market comes back, nothing changes except time. Are you really confused or just trying to cover yourself? At the age of 18 one puts $10,000 away in a retirement account. By age 58 it is worth $1,000,000. The market crashes and at age 68 upon withdrawal it is worth $10,000. No loss eh? Inflation? Time value of money? "Nothing changes except time". All right, loan me 100K$ today, I'll pay it all back in 25 years, every cent and you wouldn't have lost anything. It's only time. Here's an MBA prep power point slide. Maybe you zoning out that day in class: itc.utk.edu/spotlight/archive/murphy/MBA_Prep_Summer_Tech.ppt |
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