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Message
re: Emergency Fund
Posted on 2/25/10 at 9:56 am to LSURussian
Posted on 2/25/10 at 9:56 am to LSURussian
quote:
I can also foresee withdrawals from Roth IRA's being fully taxable (on their earnings) for higher income taxpayers (ditto) by the time someone in his 20's starts taking money out in 40 years.
That will be the day that I sell the farm and show myself the way out the door.
1
Posted on 2/25/10 at 9:59 am to TheHiddenFlask
quote:It will be done using the "put a live frog in a pot and gradually turn up the heat" method, IMO. At first, only those taxpayers who earn, say $1,000,000+ will have to pay taxes on Roth earnings.
That will be the day that I sell the farm and show myself the way out the door.
Then, $500,000+....and so on. Once the precedent is set, the water just keeps getting hotter and then it's too late.
Posted on 2/25/10 at 10:12 am to LSURussian
quote:
It will be done using the "put a live frog in a pot and gradually turn up the heat" method, IMO. At first, only those taxpayers who earn, say $1,000,000+ will have to pay taxes on Roth earnings.
Then, $500,000+....and so on. Once the precedent is set, the water just keeps getting hotter and then it's too late.
No doubt that is what will happen, if it does.
Have you ever read the book "Atlas Shrugged"?
Posted on 2/25/10 at 10:21 am to TheHiddenFlask
quote:Oh, yeah. Years ago. Why?
Have you ever read the book "Atlas Shrugged"?
Speaking of books, I just got the book Nudge by Thaler and Sunstein. I've only thumbed through it (I'm bringing it with me for my airplane reading when I leave for Armenia tomorrow) but it looks intriguing. It's along the lines of Freakanomics regarding how small events can permanently affect our lives or even affect history.
Posted on 2/25/10 at 10:32 am to LSURussian
quote:
Oh, yeah. Years ago. Why?
Just thought it was relevant to the situation.
quote:
Speaking of books, I just got the book Nudge by Thaler and Sunstein. I've only thumbed through it (I'm bringing it with me for my airplane reading when I leave for Armenia tomorrow) but it looks intriguing. It's along the lines of Freakanomics regarding how small events can permanently affect our lives or even affect history.
Sounds good. I really have been wanting to catch up on my leisure reading, but it hasn't really been working out. I'll add that to my wish list on Amazon.
Posted on 2/25/10 at 6:06 pm to bayoudude
quote:
Whatever floats your boat....
I guess I just know too many people that have been unable to retire because of the way the market has done in the last 10yrs.
They were not able to retire because they didn't properly adjust their asset allocation as they aged not because they were in 401k's, ira's or the market.
Posted on 2/25/10 at 10:21 pm to LSURussian
quote:
It will be done using the "put a live frog in a pot and gradually turn up the heat" method, IMO. At first, only those taxpayers who earn, say $1,000,000+ will have to pay taxes on Roth earnings.
First they came for the Socialists, and I did not speak out -- Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out -- Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out -- Because I was not a Jew.
Then they came for me -- and there was no one left to speak for me.
Posted on 2/25/10 at 10:28 pm to Cash
quote:
They were not able to retire because they didn't properly adjust their asset allocation as they aged not because they were in 401k's, ira's or the market.
Guess you missed what the market has done in the last few years. Many people lost their arse in mutual funds and had to hurry up and freeze their retirement accounts and roll what was left into CD's.
Posted on 2/25/10 at 10:30 pm to bayoudude
quote:
Guess you missed what the market has done in the last few years. Many people lost their arse in mutual funds and had to hurry up and freeze their retirement accounts and roll what was left into CD's.
It all went way over your head didn't it.
Posted on 2/26/10 at 10:59 am to bayoudude
quote:
Sure the interest isn't as good as I could make in the market but I will never go negative
Except when inflation is higher than the interest raate.
Posted on 2/26/10 at 11:05 am to TigerDeacon
I guess I am just too financially conservative for this board. Had to listen to my coworker bitch this morning about being $3k negative into her principle right now 
She plays with one of those online trading sites.
She plays with one of those online trading sites.Posted on 2/26/10 at 12:02 pm to bayoudude
Which is not a horrible idea. However, I would look into annuities over cd's. 2 reasons, higher rate of return, and tax deferral.
Posted on 2/26/10 at 12:38 pm to LSURussian
quote:
It will be done using the "put a live frog in a pot and gradually turn up the heat" method, IMO.
I hear what you are saying and you are certainly not alone, but I think the political fallout from such an egregious bait-and-switch would be too great. I can't see the millions of people who have planned their retirement under one set of rules collectively stand by and let the rug be pulled out from under them. Those voting for this would be committing political suicide.
More likely are ordinary income tax increases, repeal of capital gains taxes, etc.
Posted on 2/26/10 at 12:41 pm to jmtigers
quote:
Emergency fund is separate from investments always.
False!
Posted on 2/26/10 at 1:25 pm to Dusty Bottoms
quote:
False!
Ok ... so please explain how you would invest an emergency fund
Posted on 2/26/10 at 1:35 pm to bayoudude
quote:
uess you missed what the market has done in the last few years. Many people lost their arse in mutual funds and had to hurry up and freeze their retirement accounts and roll what was left into CD's.
I'm amazed that people view equity funds as a "safe" class of investments.
Posted on 2/26/10 at 3:26 pm to jmtigers
quote:
Ok ... so please explain how you would invest an emergency fund
My emergency fund is a part of my taxable, liquid index fund portfolio. It's all about scale. Young professionals would probably be best served placing their EF in a safe savings vehicle. More established professionals with greater resources can take on more risk. For example, I could (and have) absorb a serious market crash while still maintaining a comfortable EF stash.
Posted on 2/26/10 at 3:37 pm to Dusty Bottoms
quote:
Ok ... so please explain how you would invest an emergency fund
I'll take it a step further and COMPLETELY disagree with those saying you should not use a Roth IRA as an EF vehicle. A Roth is an excellent place to put it, assuming you are not already maxing out on contributions and have satisfied the minimum term requirement for penalty free contribution withdrawal. Why? Because you can use it if you need it with no repurcussions; and if you don't need it (as will be the case for most) you have funded one of the best and most flexible retirement vehicles out there.
Posted on 2/26/10 at 3:43 pm to Dusty Bottoms
just how liquid is it though ? for cash in hand ?
Posted on 2/26/10 at 3:44 pm to Dusty Bottoms
quote:
no repurcussions
If you have to withdraw the money you can't just put it back in when you recover from the emergency. You can only contribute the max per tax year no matter if you have withdrawn previous contributions or not.
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