Stock Market- Will Rebound

[Horseman 2,353]

2 minutes ago, The Psychic Observer said:

Also assumes your AGI is under $150k

Google "backdoor roth" and "mega backdoor roth".  Educate yourself.   

[Horseman 2,353]

@The Psychic Observer

I'll break it down for you. Hopefully you can take advantage and it helps you reach financial independence sooner. I'll even do it with the new 2025 limits.  The amounts in parenthesis are catch up if over 50, for HSA it's 55.  

#1 Your 401k contribution can go into a Roth account, it just gets taxed before it gets taken out of your paycheck unlike regular 401k. You just have to make that selection with your employer. It's usually called 401k Roth. $23,500 (+7,500).

#2 The total 401k contribution limit is $70,000 (+7,500).  People normally think of anything above $23,500 as employer contributions or matches. But that's not the case, you can contribute up to those limits if your employer has what is called an "Aftet Tax 401k" option.  A lot of employers don't have that option, but as far as I can tell it's just because they don't know any better. If you don't have that option discuss it with your employer. I'd suggest pleading and begging.  70,000 total minus 23,500 that's going into 401k Roth leaves $46,500 (+7,500) of After Tax 401k contributions you can make.  Here is where it gets interesting....after you've contributed to a After Tax 401k option call up Fidelity, or whomever, and tell them you want to convert all your After Tax 401k to Roth.  Ta'da!  That's called the Mega Backdoor Roth.  

#3 HSA $8,550 (+1,000)  This is the best Tax sheltered retirement account because it's triple leveraged. Not only is it not taxed when you take it out, like a Roth, it isn't taxed going in either.  Do not use your HSA to pay your doctor bills.  Pay with cash and save the receipts because you can reimburse yourself at any time. This let's the money sit there and grow Tax free until you need it. Plus the Cares Act made all sorts of things HSA qualified, save those receipts too. 

#4 Roth IRA $7,000 (+1,000).  Screw the income limits. All you have to do is make an IRA contribution, then call the bank the very next day and tell them you want to do an IRA to Roth conversation.  This is called a Backdoor Roth. Note: you cannot do this if you already have an IRA account with money in it without tax implications because the government treats all IRA accounts you may have as one big account. If you do not carry an IRA balance there are no tax implications.   

 

Let's add it up!  That's $85,550 (+9,500) in tax sheltered (Roth&HSA) accounts in 2025 that you will never pay a penny of capitol gains tax on.  

That's real investing.  

You're welcome.  

 

[Horseman 2,353]

Note:  A caveat with regular 401k versus 401k Roth. Contributing to the Roth version is generally better earlier in your career when you are in a low tax bracket. If you are in your high earnings years (high tax bracket) it may be better to do regular 401k and wait to do the conversation after you retire - low income low tax bracket.  Eventually it all becomes a tax avoidance problem to solve.  

[Mark Davis 339]

57 minutes ago, Horseman said:

Note:  A caveat with regular 401k versus 401k Roth. Contributing to the Roth version is generally better earlier in your career when you are in a low tax bracket. If you are in your high earnings years (high tax bracket) it may be better to do regular 401k and wait to do the conversation after you retire - low income low tax bracket.  Eventually it all becomes a tax avoidance problem to solve.  

Correct.  My background was as a CPA but I was on the audit side.  I reviewed it back during Covid and it was better to leave as is.

[The Psychic Observer 496]

3 hours ago, Horseman said:

 

You're welcome.  

 

Didn't ask but cool post.

[Horseman 2,353]

29 minutes ago, The Psychic Observer said:

Didn't ask but cool post.

The more you know. Information is power.

They should teach that stuff in High School.  Roth has been around since 1997, inside the 401k since 2001. It's amazing how many people and employers haven't figured out it's full power.  My company didn't wake up until 2015.  Now they've made it so you can buy private company stock inside the Roth after an after 401k conversation. Never paying any capitol gains on  stock that spits out huge yearly returns. The kids now days have a huge advantage over what I did.  

But if you like money be careful who you vote for. Biden's Build Back Better would have taken all that away. God bless Joe Manchin.   

[peenie 1,896]

I'm glad Trump is back-peddling on his not well thought out tariffs plan in order to save the world markets from collapsing. 

[Hardcore troubadour 14,922]

10 minutes ago, peenie said:

I'm glad Trump is back-peddling on his not well thought out tariffs plan in order to save the world markets from collapsing. 

Another expert chimes in. 

[Tebok 303]

11 hours ago, RaiderHaters Revenge said:

Omg graph go down panic

You goons wouldn't recognize and whatabouted the stock market hitting a high under Biden.

MAGAturds eschew common sense.

[Hardcore troubadour 14,922]

9 minutes ago, Tebok said:

You goons wouldn't recognize and whatabouted the stock market hitting a high under Biden.

MAGAturds eschew common sense.

It hit a high under Reagan, Bush, Clinton, Bush, Obama, Trump, Biden and Trump. Why are you so stupid? 

[Tebok 303]

4 minutes ago, Hardcore troubadour said:

It hit a high under Reagan, Bush, Clinton, Bush, Obama, Trump, Biden and Trump. Why are you so stupid? 

When did it hit a high under the last Trump you mentioned?

The high was in December. Trump hadn't even taken office yet.

Geez, how much dumbass have you consumed tonight?

[jbycho 583]

21 minutes ago, Tebok said:

You goons wouldn't recognize and whatabouted the stock market hitting a high under Biden.

MAGAturds eschew common sense.

Poor Rusty. He's still in pain. 

[Hardcore troubadour 14,922]

7 minutes ago, Tebok said:

When did it hit a high under the last Trump you mentioned?

The high was in December. Trump hadn't even taken office yet.

Geez, how much dumbass have you consumed tonight?

On Feb 19, 2025 the S&P hit an all time high. How does my ass taste this time? You love it, obviously.  

[RaiderHaters Revenge 4,236]

47 minutes ago, Tebok said:

You goons wouldn't recognize and whatabouted the stock market hitting a high under Biden.

MAGAturds eschew common sense.

do you speak English?

[The Psychic Observer 496]

More red.  Imagine that.  Winning.

[Horseman 2,353]

30 minutes ago, The Psychic Observer said:

More red.  Imagine that.  Winning.

Lol

[peenie 1,896]

14 hours ago, Hardcore troubadour said:

Another expert chimes in. 

Oh, I'm sorry, what I meant to say:

I'm glad Trump put the world into a tailspin and where all of our retirements and stocks here in the USA lost money but of course, Trump's billionaire friends were able to make record profits by buying the dip. Meanwhile, the rest of us are praying that things just return to normal and that in fact, Trump's bright idea of tariffs have done absolutely nothing positive for our country or anywhere else in the world so far that any of us can see. 

[supermike80 1,800]

20 hours ago, Horseman said:

@The Psychic Observer

I'll break it down for you. Hopefully you can take advantage and it helps you reach financial independence sooner. I'll even do it with the new 2025 limits.  The amounts in parenthesis are catch up if over 50, for HSA it's 55.  

#1 Your 401k contribution can go into a Roth account, it just gets taxed before it gets taken out of your paycheck unlike regular 401k. You just have to make that selection with your employer. It's usually called 401k Roth. $23,500 (+7,500).

#2 The total 401k contribution limit is $70,000 (+7,500).  People normally think of anything above $23,500 as employer contributions or matches. But that's not the case, you can contribute up to those limits if your employer has what is called an "Aftet Tax 401k" option.  A lot of employers don't have that option, but as far as I can tell it's just because they don't know any better. If you don't have that option discuss it with your employer. I'd suggest pleading and begging.  70,000 total minus 23,500 that's going into 401k Roth leaves $46,500 (+7,500) of After Tax 401k contributions you can make.  Here is where it gets interesting....after you've contributed to a After Tax 401k option call up Fidelity, or whomever, and tell them you want to convert all your After Tax 401k to Roth.  Ta'da!  That's called the Mega Backdoor Roth.  

#3 HSA $8,550 (+1,000)  This is the best Tax sheltered retirement account because it's triple leveraged. Not only is it not taxed when you take it out, like a Roth, it isn't taxed going in either.  Do not use your HSA to pay your doctor bills.  Pay with cash and save the receipts because you can reimburse yourself at any time. This let's the money sit there and grow Tax free until you need it. Plus the Cares Act made all sorts of things HSA qualified, save those receipts too. 

#4 Roth IRA $7,000 (+1,000).  Screw the income limits. All you have to do is make an IRA contribution, then call the bank the very next day and tell them you want to do an IRA to Roth conversation.  This is called a Backdoor Roth. Note: you cannot do this if you already have an IRA account with money in it without tax implications because the government treats all IRA accounts you may have as one big account. If you do not carry an IRA balance there are no tax implications.   

 

Let's add it up!  That's $85,550 (+9,500) in tax sheltered (Roth&HSA) accounts in 2025 that you will never pay a penny of capitol gains tax on.  

That's real investing.  

You're welcome.  

 

I max out my HSA contribution but my employer wasn't taking it out pre tax.  My fault for not catching it until tax filing time--and After I filed my 2024 taxes.   Had to do an amended return.  What frosts me is I could have put that money into a Roth IRA instead, which would have been preferred.

Oh well.   I am too old to dump into a roth now, so regular ol' 401k it is.  And my HSA.  I agree with your post that an HSA is the absolute best thing to add money to.   

[Horseman 2,353]

31 minutes ago, supermike80 said:

I max out my HSA contribution but my employer wasn't taking it out pre tax.  My fault for not catching it until tax filing time--and After I filed my 2024 taxes.   Had to do an amended return.  What frosts me is I could have put that money into a Roth IRA instead, which would have been preferred.

Oh well.   I am too old to dump into a roth now, so regular ol' 401k it is.  And my HSA.  I agree with your post that an HSA is the absolute best thing to add money to.   

Not your fault. That's a pretty big screw up by the employer, I mean the whole point of the HSA is to use pre-tax dollars to pay for medical bills. You're willing to pay a higher deductible for that benefit.  

I wasn't smart enough to do 401k Roth early in my career either so I'm going the roll over during retirement route. Problem is I can't possibly get it all rolled over before RMDs kick in even though I retired 10+ years early.  Good problem to have I guess.   

[Hardcore troubadour 14,922]

3 hours ago, The Psychic Observer said:

More red.  Imagine that.  Winning.

You keep being wrong. Yet you won’t shut up. Shut up. 

[The Psychic Observer 496]

17 minutes ago, Hardcore troubadour said:

You keep being wrong. Yet you won’t shut up. Shut up. 

We were red 3 hours ago.  Not Wrong.  Make me.

[Hardcore troubadour 14,922]

4 minutes ago, The Psychic Observer said:

We were red 3 hours ago.  Not Wrong.  Make me.

Listen dummy, even if it goes down it’s going  to go back up. You’re just masturbating. 

[RaiderHaters Revenge 4,236]

graph go up

armageddon

[frank 2,276]

14 minutes ago, RaiderHaters Revenge said:

graph go up

armageddon

But are you gettin’ it?

 

[Cdub100 3,826]

Are you winning son?

[Horseman 2,353]

More green. Imagine that.  Imagine being all cash and missing the dow plus 6% and nasdaq plus 12% for the week.   

[The Psychic Observer 496]

35 minutes ago, Horseman said:

More green. Imagine that.  Imagine being all cash and missing the dow plus 6% and nasdaq plus 12% for the week.   

Aren't you flush with cash?

[Horseman 2,353]

8 minutes ago, The Psychic Observer said:

Aren't you flush with cash?

I've got plenty.  About 10%.  I know its a lot, but a guaranteed 4% in retirement years lowers risk along with what I have in fixed income.  

You should expect a higher return with the more risk you take on, when you're years out from retirement.  

I can imagine a day were I'm 50% fixed income and cash, but, it's not today. I can't imagine being 100%, that's just stoooopid.  

[The Psychic Observer 496]

Flush = 10%

Learn something new everyday.

[Horseman 2,353]

25 minutes ago, The Psychic Observer said:

Flush = 10%

Learn something new everyday.

10% is a large sum of cash for me. Probably 10 years of your salary or so. Understand now?  

Remember, we discussed this earlier, I couldn't find enough ways to get it all inside tax sheltered accounts or even retirement accounts.  I have more invested in a regular brokerage than anything else. 

It's a nice problem to have. 

[The Psychic Observer 496]

36 minutes ago, Horseman said:

10% is a large sum of cash for me. Probably 10 years of your salary or so. Understand now?  

Remember, we discussed this earlier, I couldn't find enough ways to get it all inside tax sheltered accounts or even retirement accounts.  I have more invested in a regular brokerage than anything else. 

It's a nice problem to have. 

I wish I was you.

[Hardcore troubadour 14,922]

Psychic   Cramer

[Horseman 2,353]

11 minutes ago, The Psychic Observer said:

I wish I was you.

Start now.

Step 1 - Read All About Asset Allocation by Richard Ferri

Step 2 - Invest the money sitting there on the sidelines based on what you learned. 

Step 3 - Get as much cash as you can, while on a payroll, inside tax sheltered retirement accounts. 

Step 3b - If you don't make enough money get a better or second job.  Balance your budget and curb spending. 

Step 4 - Leave politics and your TDS out of it.  It has nothing to do with becoming successful.  

You're Welcome.  

[The Psychic Observer 496]

11 minutes ago, Horseman said:

Start now.

Step 1 - Read All About Asset Allocation by Richard Ferri

Step 2 - Invest the money sitting there on the sidelines based on what you learned. 

Step 3 - Get as much cash as you can, while on a payroll, inside tax sheltered retirement accounts. 

Step 3b - If you don't make enough money get a better or second job.  Balance your budget and curb spending. 

Step 4 - Leave politics and your TDS out of it.  It has nothing to do with becoming successful.  

You're Welcome.  

Are you still flush with cash or have you invested it all this week?

[Horseman 2,353]

29 minutes ago, The Psychic Observer said:

Are you still flush with cash or have you invested it all this week?

I've got plenty and can be very selective.  Like I said the 10% is part of my allocation plan. It doesn't have to be invested until interest rates drop and I hope they never do.  

All I've done this week is picked up a little bit of cheap AMZN. My cost basis is now 176.00 when I sold about the same amount a while ago over 220.00.  Note: I wouldn't advise anyone to do that. 

Mostly what happens in a single week or two like this is completely meaningless to me. The vast majority of my money will be working for me for many years. That's why it's hilarious to see people react to a tiny point in time when they would invariably be better off to just set it and forget it.  You can't time the market. You can't predict what will happen tomorrow. But, we have a really really good idea where we will be 10 and 30 years from now.  

[The Psychic Observer 496]

16 minutes ago, Horseman said:

I've got plenty and can be very selective.  Like I said the 10% is part of my allocation plan. It doesn't have to be invested until interest rates drop and I hope they never do.  

All I've done this week is picked up a little bit of cheap AMZN. My cost basis is now 176.00 when I sold a while ago over 220.00.  

Note: I wouldn't advise anyone to do that. 

Mostly what happens in a single week or two like this is completely meaningless to me. The vast majority of my money will be working for me for many years. That's why it's hilarious to see people react to a tiny point in time when they would invariably be better off to just set it and forget it.  You can't time the market. You can't predict what will happen tomorrow. But we have a really really good idea where we will be 10 and 30 years from now.  

Do you have a wealth manager or you do everything with Charles Schwab?

[Horseman 2,353]

1 hour ago, The Psychic Observer said:

Do you have a wealth manager or you do everything with Charles Schwab?

My company provided me with a financial advisor for many years before I retired. I decided not to use them when I did retired because they started pushing their product, they all have one, when they knew I was going to leave the company.  Plus if you'd read the book I suggested you'd learn a couple things:

1 -  A financial firm and their suite of managed funds do NOT beat regular index funds 80% of the time. And the ones that beat it last year won't beat it this year, historically.  Your chances of teaming up with the next Warren Buffet is very very very unlikely.  

2 - The one thing you have absolute full control of is expenses.  It's not worth paying 0.5 to 1.5% off the top to a firm that is highly unlikely to beat say the S&P Index.  Your best friend is low cost index mutual funds or etfs.  Fidelity actually has a set of ZERO cost mutual funds (they did that in order to compete with Vanguard, the invenors of the low cost index funds).  

I have all my retirement accounts at Fidelity and my banking, brokerage and IRA accounts are at Bank of America where I am a Diamond Plus member.  

When I had a free financial advisor they were helpful reviewing my stuff, telling me if my interpretation of the rules were correct or not and fixing tax problems. My advise is they might be worth a set fee to do that kind of stuff for you, but, not to do the actual investing at a percentage.  Just read the book and follow the blueprint.  I would have kept my guy on for a few thousand a year, but, I didn't want the sales pitch from him every time we met. 

Hope that helps.  

[Horseman 2,353]

I have the most respect for Vanguard and everything they've done for investors by inventing low cost index funds and the Boglehead philosophy, but I've never used them directly. I do purchase many of their low cost (almost zero) etfs.  

Of the ones I've used: Fidelity, Bank of America/Merrill Edge and Schwab I like Fidelity the best. 

Fidelity is where my employer retirement accounts were and where they will stay.  And I have a Roth IRA there too for easy 401k conversations. Website is easy and they have a program called Active Trader Pro that you download to your desktop and does everything Schwab's Think or Swim does - at least as much as I use. Phone support, all that top notch. And their default cash sweep accounts automatically pay top interest.  

I'm sure Schwab is good, I actually have a few grand in an account I left there so I could use Think or Swim ( formerly TD Ameritrade) but really don't need it with Active Trader Pro. From what I remember I didn't really like their website and interface as much as Fidelity. 

Bank of America is a necessary evil. They are are real bank with branches and checking and savings accounts, but, they are integrated with Merrill Edge. Their websites link to each other and your investment accounts show up on your banking homepage. My brokerage and Roth IRA, along with my wife's IRA, Roth IRA and SEP accounts are there. It's convenient when doing contributions to these accounts because it come directly out of your ƁoA savings or checking account linked to Merrill Edge (unlike employer retirement açcounts that come out of your paycheck). They suck though because they are a bank and they hardly pay interest on savings or cash sweep accounts.  You have to get a "preferred deposite" option at Merrel Edge (and its almost like they hide it from you) to get a decent interest rate on cash and it's not a sweep. But it is next day when moving money around.  I take advantage of them as much as I can as a Diamond member getting a ton of credit card points etc.  

All these guys will bother you from time to time pushing a financial manager on you, I just tell them I already have one. 

[Tebok 303]

1 hour ago, Horseman said:

I have the most respect for Vanguard and everything they've done for investors by inventing low cost index funds and the Boglehead philosophy, but I've never used them directly. I do purchase many of their low cost (almost zero) etfs.  

Of the ones I've used: Fidelity, Bank of America/Merrill Edge and Schwab I like Fidelity the best. 

Fidelity is where my employer retirement accounts were and where they will stay.  And I have a Roth IRA there too for easy 401k conversations. Website is easy and they have a program called Active Trader Pro that you download to your desktop and does everything Schwab's Think or Swim does - at least as much as I use. Phone support, all that top notch. And their default cash sweep accounts automatically pay top interest.  

I'm sure Schwab is good, I actually have a few grand in an account I left there so I could use Think or Swim ( formerly TD Ameritrade) but really don't need it with Active Trader Pro. From what I remember I didn't really like their website and interface as much as Fidelity. 

Bank of America is a necessary evil. They are are real bank with branches and checking and savings accounts, but, they are integrated with Merrill Edge. Their websites link to each other and your investment accounts show up on your banking homepage. My brokerage and Roth IRA, along with my wife's IRA, Roth IRA and SEP accounts are there. It's convenient when doing contributions to these accounts because it come directly out of your ƁoA savings or checking account linked to Merrill Edge (unlike employer retirement açcounts that come out of your paycheck). They suck though because they are a bank and they hardly pay interest on savings or cash sweep accounts.  You have to get a "preferred deposite" option at Merrel Edge (and its almost like they hide it from you) to get a decent interest rate on cash and it's not a sweep. But it is next day when moving money around.  I take advantage of them as much as I can as a Diamond member getting a ton of credit card points etc.  

All these guys will bother you from time to time pushing a financial manager on you, I just tell them I already have one. 

Your household income was low enough to qualify to participate in a ROTH.

Way to go, Maj. Moneybags.

[Horseman 2,353]

4 minutes ago, Tebok said:

Your household income was low enough to qualify to participate in a ROTH.

Way to go, Maj. Moneybags.

Another idiot that thinks income limits matter?

HFS.    And you're a pretend investment advisor? 

Read and learn dipchit:

On 4/10/2025 at 2:22 PM, Horseman said:

@The Psychic Observer

I'll break it down for you. Hopefully you can take advantage and it helps you reach financial independence sooner. I'll even do it with the new 2025 limits.  The amounts in parenthesis are catch up if over 50, for HSA it's 55.  

#1 Your 401k contribution can go into a Roth account, it just gets taxed before it gets taken out of your paycheck unlike regular 401k. You just have to make that selection with your employer. It's usually called 401k Roth. $23,500 (+7,500).

#2 The total 401k contribution limit is $70,000 (+7,500).  People normally think of anything above $23,500 as employer contributions or matches. But that's not the case, you can contribute up to those limits if your employer has what is called an "Aftet Tax 401k" option.  A lot of employers don't have that option, but as far as I can tell it's just because they don't know any better. If you don't have that option discuss it with your employer. I'd suggest pleading and begging.  70,000 total minus 23,500 that's going into 401k Roth leaves $46,500 (+7,500) of After Tax 401k contributions you can make.  Here is where it gets interesting....after you've contributed to a After Tax 401k option call up Fidelity, or whomever, and tell them you want to convert all your After Tax 401k to Roth.  Ta'da!  That's called the Mega Backdoor Roth.  

#3 HSA $8,550 (+1,000)  This is the best Tax sheltered retirement account because it's triple leveraged. Not only is it not taxed when you take it out, like a Roth, it isn't taxed going in either.  Do not use your HSA to pay your doctor bills.  Pay with cash and save the receipts because you can reimburse yourself at any time. This let's the money sit there and grow Tax free until you need it. Plus the Cares Act made all sorts of things HSA qualified, save those receipts too. 

#4 Roth IRA $7,000 (+1,000).  Screw the income limits. All you have to do is make an IRA contribution, then call the bank the very next day and tell them you want to do an IRA to Roth conversation.  This is called a Backdoor Roth. Note: you cannot do this if you already have an IRA account with money in it without tax implications because the government treats all IRA accounts you may have as one big account. If you do not carry an IRA balance there are no tax implications.   

 

Let's add it up!  That's $85,550 (+9,500) in tax sheltered (Roth&HSA) accounts in 2025 that you will never pay a penny of capitol gains tax on.  

That's real investing.  

You're welcome.