401K Retirement: High Risk To Be Millionaire
#61
(2024-01-30, 09:02 PM)BrokeAssMillionaire Wrote: Seem like she didn't know much. As you know, most Viet people don't want to pay CPA unless they have business  Happy-smiley-emoticon

It's only shock them after they sell the house then fill the income tax return. Let say she gains 50k after selling the long term rental home, She probably pays 8K tax of 15% which it's not that much to be hassle. But 300k gain is big.

My agent even rejected a higher bids so the final bidding day, she told bank that I was the highest one :) while I offered lower.

1031 exchange is the one on case 1 that I mean trading new rental.

Foreign or other good advice for investing nowadays : NO ..lol.... no more investing, need to hurry spending and how to take out 401K to lower the tax. 20k/year would lower the tax bracket at 13% which will take 100 years to withdraw all... lol.. Do you think I can live that long?

I surmise that she would like to hear only what she wishes for. Some Asian business owners even try to get a CPA certificate as they do not trust people to handle their accounting or know private information.

Shall we "skinder" a bit? Let's say a single rental property's net sale is around $800k, with particular distributions to the invisible hefty interests, costs of previously repaired, and real estate capital gain taxes. She finally would accumulate an estimated $350k/each for more than a decade of investment. Worth it, eh?

Look how lucky you were! It would be best to invite her for a special dinner, wouldn't you? Wink

I am not sure if she qualifies for the 1031 Exchange or not. 

I lack experience with 401(k) cashing out and need your steer after you've done your withdrawal. Smiling-face-with-halo4

I have second thoughts about maximizing the lower tax bracket by contributing to the health savings accounts and the 529 (education expenses) plans besides 401(k). What would your opinions be? 

Don't worry! Your prosperous life will be longer than you expected!

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Kaos-1
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#62
"Shall we "skinder" a bit? Let's say a single rental property's net sale is around $800k, with particular distributions to the invisible hefty interests, costs of previously repaired, and real estate capital gain taxes. She finally would accumulate an estimated $350k/each for more than a decade of investment. Worth it, eh?"

You really can't say anything much here. Vietnamese are complicate .....lol.... Did she claim country/city as rental home? If she did, the utilities cost more home insurance cost less than primary. Then all repair cost need to deduce from tax return each year. Whatever the capital gain is is not relate to the repair cost. Rental will be taxed on any capital gain. You can't run away from tax if selling as a rental property.

Everyone is qualified for the 1031 Exchange as long as you get the new rental in 180 days.

When you withdraw 401k, it will deduce 20% right away. For example, you take out 100K, they will send you the check 80k. Then whatever the total income in that year base on your tax bracket, you may get back or pay more. 401k is pre-tax.

I usually use this info to adjust below 22%, it's not easy, you have to manage well, this would make you like living paycheck by paycheck. In my case, the rental property helped to over come the cash flow.

35% for incomes over $243,725 ($487,450 for married couples filing jointly)

32% for incomes over $191,950 ($383,900 for married couples filing jointly)

24% for incomes over $100,525 ($201,050 for married couples filing jointly)

22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)

As long as you contribute as pre-tax, it's 20% tax ahead. Only Roth is after tax, so no tax for gain.

529 plan is after-tax, no tax on gain.

Let say you earn 100k, contribute 401K 30K and 529k 30K. Then they only deduce 30K from 401k which you still end up 70K. So tax will be 24% for single and 22% for couples.

Pay attention to pre-tax and after-tax plans
-pre-tax is tax on any withdraw but can get tax deduction
-after-tax is money that already taxed, can't get tax deduction, no tax on capital gain. 

For me, pre-tax (401k) for 20 years and after-tax (Roth) for 4 years. Why Roth for 4 years? Because I am in the 24% bracket and no longer able to get away for low tax. So when I am ready to withdraw, I will start the pre-tax first, then keep the Roth continue to grow since it's no tax on capital gain. Then maybe I would take out all Roth when I reach over 70-80.

Happy new year!!!

Happy-smiley-emoticon

ps: when you fill income by yourself, read any question even it doesn't apply to you. You gain more knowledge.
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#63
(2024-02-02, 11:25 AM)BrokeAssMillionaire Wrote: "Shall we "skinder" a bit? Let's say a single rental property's net sale is around $800k, with particular distributions to the invisible hefty interests, costs of previously repaired, and real estate capital gain taxes. She finally would accumulate an estimated $350k/each for more than a decade of investment. Worth it, eh?"

You really can't say anything much here. Vietnamese are complicate .....lol.... Did she claim country/city as rental home? If she did, the utilities cost more home insurance cost less than primary. Then all repair cost need to deduce from tax return each year. Whatever the capital gain is is not relate to the repair cost. Rental will be taxed on any capital gain. You can't run away from tax if selling as a rental property.

Everyone is qualified for the 1031 Exchange as long as you get the new rental in 180 days.

When you withdraw 401k, it will deduce 20% right away. For example, you take out 100K, they will send you the check 80k. Then whatever the total income in that year base on your tax bracket, you may get back or pay more. 401k is pre-tax.

I usually use this info to adjust below 22%, it's not easy, you have to manage well, this would make you like living paycheck by paycheck. In my case, the rental property helped to over come the cash flow.

35% for incomes over $243,725 ($487,450 for married couples filing jointly)

32% for incomes over $191,950 ($383,900 for married couples filing jointly)

24% for incomes over $100,525 ($201,050 for married couples filing jointly)

22% for incomes over $47,150 ($94,300 for married couples filing jointly)
12% for incomes over $11,600 ($23,200 for married couples filing jointly)

As long as you contribute as pre-tax, it's 20% tax ahead. Only Roth is after tax, so no tax for gain.

529 plan is after-tax, no tax on gain.

Let say you earn 100k, contribute 401K 30K and 529k 30K. Then they only deduce 30K from 401k which you still end up 70K. So tax will be 24% for single and 22% for couples.

Pay attention to pre-tax and after-tax plans
-pre-tax is tax on any withdraw but can get tax deduction
-after-tax is money that already taxed, can't get tax deduction, no tax on capital gain. 

For me, pre-tax (401k) for 20 years and after-tax (Roth) for 4 years. Why Roth for 4 years? Because I am in the 24% bracket and no longer able to get away for low tax. So when I am ready to withdraw, I will start the pre-tax first, then keep the Roth continue to grow since it's no tax on capital gain. Then maybe I would take out all Roth when I reach over 70-80.

Happy new year!!!

Happy-smiley-emoticon

ps: when you fill income by yourself, read any question even it doesn't apply to you. You gain more knowledge.

You might be right. The Vietnamese folks are calculating and shrewd scheming, especially when involved in taxes. 

Our conversations are slowly crawling to a parallel line now. Face-with-stuck-out-tongue-and-winking-eye_1f61c 
No, brother. She doesn't want to use the 1031 Provision to exchange for another rental property but plans to move in and treat it as her principal residence. After a few years, she would sell it to swap the recognition of gain and shield $500k in capital gain. I am unsure if she qualifies, as I heard tales of social media saying Congress tightened that loophole in 2004. Further, she owes the amount of deducted depreciation recapture taxes if she sold the property after turning it into a primary residence.

The 20% deduction is a lot to pay for withdrawing 401(k). Does that percentage affect all ages? Even if you've reached your retirement age?

It's good to hear that your rental property helped overcome the cash flow. Thanks for pointing out the tax brackets and pre/after-tax plans. Cheer

Yes, brother! I always respect and take heed of your crucial advice.   Tulip4
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#64
If that 's what her plan then 
-Single: no tax under 250k capital gain
-Couple: under 500k gain, no tax

Let say for couple: sell 800K, gain 500K, 2% for agent (16k of 800k) Then total gain is 500k-16K = 484k <----- No tax
The same above for single, then take 500k-250k-16k=234K <----tax bases on her tax bracket.

20% is applied to 401k for everyone, no matter how old the person is. It bases on tax bracket at that time. So you may take back if it's 13% or pay more if it's 24%

Tax bracket changes all the time, just google for tax bracket to figure out.  Shy That's how I monitor every year to see if I can adjust for AGI to lower tax.
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#65
(2024-02-06, 11:39 AM)BrokeAssMillionaire Wrote: If that 's what her plan then 
-Single: no tax under 250k capital gain
-Couple: under 500k gain, no tax

Let say for couple: sell 800K, gain 500K, 2% for agent (16k of 800k) Then total gain is 500k-16K = 484k <----- No tax
The same above for single, then take 500k-250k-16k=234K <----tax bases on her tax bracket.

20% is applied to 401k for everyone, no matter how old the person is. It bases on tax bracket at that time. So you may take back if it's 13% or pay more if it's 24%

Tax bracket changes all the time, just google for tax bracket to figure out.  Shy That's how I monitor every year to see if I can adjust for AGI to lower tax.

Thanks, brother. Our discussion lightened up my skeptical questions. Cheer 

Do you know about bond investments? Would you mind sharing your thoughts so VietBest's guests, members, and I can broaden our knowledge to grow wealthy?

ba8 super duper!
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#66
Happy-smiley-emoticon

I am not expert so don't follow me to death. I really never get into bonds. What I heard from my coworker is stock up bond down, stock down bond up. He did try 50% of bond and made some money but wasn't gain much. If he follows me for high risk in mutual funds, he would gain more by now. It was like I gain 90% while his gain is around 40%. All my accounts and individual Roth are in mutual funds: Large, Mid, and Small caps. These are kept until 60 so I keep buy and forget, don't bother to touch it. I guess I was lucky because I bought when it low, otherwise; it may not gain much. Only the recently that not gain much. You can see my previous post on page 4 that gains from 18% to 117%. The 117% gain was bought over 10 years I think. I am more interest in Mid and Small caps than Large cap. Even in my 401k, I have 60% of Mid, 20% of Small, and 20% of Large caps. 

As far as quarterly Investment Performance Reports of my 401k, I have seen Mid and Large have equally gain more than Small cap. 

-Target plans: 5-10%
-Bonds: 6-7%
-Large cap: 11-12%
-Mid cap: 11-12%
-Small cap: 12-14%
-International: 9-10% <----- I have 5% in here, this was the bad one in the last 20 years. (gain then loss, and keep repeating)

Don't forget, the more you gain, the more you loss too if stock is down because these are high risk. One of my coworker jumps in/out so he didn't gain much because when stock is up too fast, he is scared to get in so he stuck in cash saving 401K that gains only from 05-1.5%. I believe it was when Trump became president and he heard the news that stock will go down ....lol.... I just didn't care and didn't touch anything. So when Trump was in office, some of us gained over 200k while he gained nothing. During 2016-2020, Large Mid and Small caps gained from 18%-23%. That was the best years I have ever seen.

Note: The bold text gives you the idea:
Why I am in high risk? This would NOT work for you if you don't have pension so DON'T try in high risk like me.  Even I lose all in 401k and stock to 0$, I am still able to survive with pension.  Shy  So these funds are just a bonus for me with/without it.

Alright, get ready for new year. The year of dragon. I think it would be the best year of stock. I can't wait to see the DOW reaches 40K pts. That's where I reach my dream goal.  2leluoi


[Image: Happy-New-Year2024-02.png]
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#67
(2024-02-09, 12:20 PM)BrokeAssMillionaire Wrote: Happy-smiley-emoticon

I am not expert so don't follow me to death. I really never get into bonds. What I heard from my coworker is stock up bond down, stock down bond up. He did try 50% of bond and made some money but wasn't gain much. If he follows me for high risk in mutual funds, he would gain more by now. It was like I gain 90% while his gain is around 40%. All my accounts and individual Roth are in mutual funds: Large, Mid, and Small caps. These are kept until 60 so I keep buy and forget, don't bother to touch it. I guess I was lucky because I bought when it low, otherwise; it may not gain much. Only the recently that not gain much. You can see my previous post on page 4 that gains from 18% to 117%. The 117% gain was bought over 10 years I think. I am more interest in Mid and Small caps than Large cap. Even in my 401k, I have 60% of Mid, 20% of Small, and 20% of Large caps. 

As far as quarterly Investment Performance Reports of my 401k, I have seen Mid and Large have equally gain more than Small cap. 

-Target plans: 5-10%
-Bonds: 6-7%
-Large cap: 11-12%
-Mid cap: 11-12%
-Small cap: 12-14%
-International: 9-10% <----- I have 5% in here, this was the bad one in the last 20 years. (gain then loss, and keep repeating)

Don't forget, the more you gain, the more you loss too if stock is down because these are high risk. One of my coworker jumps in/out so he didn't gain much because when stock is up too fast, he is scared to get in so he stuck in cash saving 401K that gains only from 05-1.5%. I believe it was when Trump became president and he heard the news that stock will go down ....lol.... I just didn't care and didn't touch anything. So when Trump was in office, some of us gained over 200k while he gained nothing. During 2016-2020, Large Mid and Small caps gained from 18%-23%. That was the best years I have ever seen.

Note: The bold text gives you the idea:
Why I am in high risk? This would NOT work for you if you don't have pension so DON'T try in high risk like me.  Even I lose all in 401k and stock to 0$, I am still able to survive with pension.  Shy  So these funds are just a bonus for me with/without it.

Alright, get ready for new year. The year of dragon. I think it would be the best year of stock. I can't wait to see the DOW reaches 40K pts. That's where I reach my dream goal.  2leluoi


[Image: Happy-New-Year2024-02.png]

Smiling-face-with-halo4

Yes, brother. I'll keep this slogan, "Never follow someone to death," especially in money and love.  Face-with-stuck-out-tongue-and-winking-eye_1f61c

Thank you for the exhaustive explanation. Tulip4 

The presidential election will happen this year, and the stock market might be affected. Oh well, the Year of Dragons wishes us prosperity in everything. 

Shall we go back to the self-management of rental properties? Would you guide me on your secret tricks for making renters pay on time and do the most minor damage to the house? 


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#68
....lol.... I don't know if I should laugh or cry for this issue. It's actually luck not not. Either self-management or property management, both would end up the same. When a tenant doesn't pay, it would take 3-6 months to get eviction done. 

Here are a few examples:
-------------------------------
-My cousin rents to a VNese for 6 years without problem except they call all the time to fix but not that's big problem.

-My friend rented to section-8 where they kept outside dirty which he had to kick them out. For section-8, they don't dare to destroy your property because when you report them, they will lost section-8 program. He rented to another regular one which he took the home back so he can live there where he had to give that family $2K to move out ....lol...

-I rented to a Mexican family for 6 years, on time 1st of the month payment. Then come to relative, they complain all the time even a small issue.

-My cousin gave the key to a Mexican guy to fix the house before getting new tenant, that Mexican guy moved his family in so police couldn't do nothing because he got the key to the house. That guy was able to live there for 6 months free before eviction. ....lol...


And the problem is on us too:
---------------------------------
-If we buy cheap house in ghetto places, no wealthy or middle class would rent so we're stuck with low class that can be trouble.

-If we have money in the upper class area, we would be able to rent out to working middle class without problem. But at these places, we may not able to afford.

The best options:
-----------------
-To request them to submit verification of employee and credit score
-Ask them to provide previous rental so you can call to check
-Write clearly in Rental Agreement and how often you would raise the rent and how much

If something is happened then we really can't avoid or do anything about it. Accept for whatever it's coming then get over it. 
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#69
I like this phrase " A lot people are millionaire in Califorina by choice" Lol

Happy New Year!

How do you manage your money so you dont have to call yourself "broke" again? Rollin
Tôi chọn cuộc sống cho mình hạnh phúc 
chứ không phải sống để người khác ngưỡng mộ!
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#70
(2024-02-16, 03:12 PM)BrokeAssMillionaire Wrote: ....lol.... I don't know if I should laugh or cry for this issue. It's actually luck not not. Either self-management or property management, both would end up the same. When a tenant doesn't pay, it would take 3-6 months to get eviction done. 

Here are a few examples:
-------------------------------
-My cousin rents to a VNese for 6 years without problem except they call all the time to fix but not that's big problem.

-My friend rented to section-8 where they kept outside dirty which he had to kick them out. For section-8, they don't dare to destroy your property because when you report them, they will lost section-8 program. He rented to another regular one which he took the home back so he can live there where he had to give that family $2K to move out ....lol...

-I rented to a Mexican family for 6 years, on time 1st of the month payment. Then come to relative, they complain all the time even a small issue.

-My cousin gave the key to a Mexican guy to fix the house before getting new tenant, that Mexican guy moved his family in so police couldn't do nothing because he got the key to the house. That guy was able to live there for 6 months free before eviction. ....lol...


And the problem is on us too:
---------------------------------
-If we buy cheap house in ghetto places, no wealthy or middle class would rent so we're stuck with low class that can be trouble.

-If we have money in the upper class area, we would be able to rent out to working middle class without problem. But at these places, we may not able to afford.

The best options:
-----------------
-To request them to submit verification of employee and credit score
-Ask them to provide previous rental so you can call to check
-Write clearly in Rental Agreement and how often you would raise the rent and how much

If something is happened then we really can't avoid or do anything about it. Accept for whatever it's coming then get over it. 

Gosh, almighty! It's ostensibly all the landlords have problems with similarities. The self-management of your faraway rental property gets more destitute since the renters notice you're not around, eh? Contrarily, my acquaintance's exultant bragged that she had eight rental properties, and her renters even deposited into her bank account before the 1st. They barely deducted monthly rental money to fix the tiny damages. 

Every cloud has its own dimmed lining, brother. Friends leased out a lake scenery premises with a gated community in Scottsdale. They informed me there wasn't much on rental income as they had to pay for the high HOA fees and well-tended garden under the community's rules.

Hey brother, my perspective of growing wealthy with the most minor headaches is becoming a lender.  Wink

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#71
When I reach 60, I can take out to spend  Happy-smiley-emoticon no longer broke after that. It's just there that I can't touch at the moment. I am counting 4 more years while living on pension. 

I am tired of renting, going to get rid off the rental home soon. Even you have property management, you still have stress for it. It 's not easy like you just sit there and collect monthly rent. Like the wind damages the roof, tenant can't fix it, you have to do it yourself or hire someone, and a lot of them don't want to fix a small damage unless replace the whole roof. That's ridiculous. 

I think a bun of my coworkers bought home in Arizona during 2005-2010 to invest, they hired property management then all went bankrupt after 5 years.  Shy

I already have plans to keep the money growing without losing anything at low risk. At 5% CD, it can give me interest and dividend 50k-100k/year. If something changes, I can go whatever options available. 

Btw, you want to keep cash in stock account instead of banks because banks interest is low. Now is easy to transfer cash from stock account to bank or vice versa. Cash in stock account (Fidelity) pays at least 2-3% monthly interest. Sometimes, it pays dividend as well.  Shy
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