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re: Dividend stocks and DRIPs as a long term investment vehicle
Posted on 6/24/13 at 8:35 am to ThaBigFella
Posted on 6/24/13 at 8:35 am to ThaBigFella
quote:
Ace Midnight thanks, I made under $90k for the first 12 years I worked, what would happen if I had that plan and my income exceeded that threshold say this year?
Let's assume you maxed out contributions (Roth, so no tax benefit upon contribution) and worked 2001 to 2012 - limits were $2k in 2001, when to $3k for 2002 to 2004, $4k through 2007, $5k until this year, so you would have (presumabably bought an index or large cap fund with your strategies) about $48k (plus growth) of your own contributions in a fund that, if you follow the rules, will produce tax-free income from 59 1/2 on. My best guess is around $80k, depending on your allocation and if you did not get the benefit of an employer match.
You would not be eligible to contribute in years you exceed the income cap, but the money would still be there, growing, waiting for you at 59 1/2, or disability or death (then to your heirs).
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