"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amount that must be withdrawn is based on the balance as of the close of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

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.

"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

"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

"Dave" wrote in message
...
On Wed, 26 Nov 2008 09:09:24 -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.

It seems you don't understand what a straw man argument is, Jon.

A straw man argument consists in setting forth an argument no one has made
and then knocking it down, rather than dealing with an argument actually
made. The above is a classic example. You set forth the argument that
police
and fire protection should not be provided by government--an argument no
one
has made. You then proceed to knock down that argument rather than
addressing whether other programs should be run by the guvmint.

I suspect that if you can't understand the previous paragraph, others can,
so I'll try not to belabor the point when you come back with the
inevitable
reply.


Really? Try google. You'll like it.

http://mediafilter.org/CAQ/CAQ54p.police.html

http://www.schneier.com/blog/archive...te_police.html

http://eclecticdem.blogspot.com/2008...ze-police.html


--
"j" ganz @@
www.sailnow.com

"Dave" wrote in message
...
On Wed, 26 Nov 2008 10:16:36 -0800, "Capt. JG"
said:

A straw man argument consists in setting forth an argument no one has
made
and then knocking it down, rather than dealing with an argument actually
made. The above is a classic example. You set forth the argument that
police
and fire protection should not be provided by government--an argument no
one
has made. You then proceed to knock down that argument rather than
addressing whether other programs should be run by the guvmint.

I suspect that if you can't understand the previous paragraph, others
can,
so I'll try not to belabor the point when you come back with the
inevitable
reply.


Really? Try google. You'll like it.

Now you're simply making yourself look foolish.


QED

--
"j" ganz @@
www.sailnow.com

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.

"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

"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

"Dave" wrote in message
...
On Tue, 25 Nov 2008 17:39:50 -0800, "Capt. JG"
said:

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?

Not at all confused. Just trying to straighten out your muddled thinking.
Take this example:

Case 1: Your GM stock has fallen 80%. You sell all your GM stock and put
the
proceeds into a money market fund. 2 days later the price of GM is the
same
and you decide that selling was a mistake, and you buy the stock back,
using
funds from the money market fund.

Case 2: Your GM stock has fallen 80%, but you decide it will come back, so
you decide not to sell.

Assume there's no tax on the transactions, because the stock is in a 401k.
Under your theory, you lost money in Case 1, but didn't lose money in Case
2. Yet in both cases the value of your GM stock on day 4 is precisely the
same.

An absurd conclusion? It should be obvious to anyone it is.


?? There is NO theory involved. If there's no sale transaction, how can
there possibly be a loss unless the business goes out completely??? Case 2:
I decide it will come back, I'm right, it does. My stock has the same or
greater value.

--
"j" ganz @@
www.sailnow.com