Stock Thread 2018

[Reli]

If you mean a Roth IRA, yes you should always max that out before funding a generic brokerage account. The former grows tax-free. The latter generates dividends and capital gains that get taxed every year.

 

[afm199]

If you mean a Roth IRA, yes you should always max that out before funding a generic brokerage acct The former grows tax-free. The latter generates dividends and capital gains that get taxed every year.

x10

I only wish I had put more in mine. I may still convert a regular IRA to Roth and pay the damn taxes

 

[afm199]

Did you happen to catch how negative the sentiment was when the stock price was less than half what it is now.
Take Morningstar with a grain of salt

I don't follow it, so no. I take everything Morningstar says with a grain of salt, it's one of several sources I use. They do have some good core information.

 

[StuckIn3rd]

This is a bit old but might be helpful:

https://money.usnews.com/money/blogs/my-money/2012/06/20/should-you-contribute-to-a-403b-or-an-ira

Thanks everyone for the helpful info. I'll take a deeper look into which IRA to invest my money into.

 

[Blankpage]

I don't follow it, so no. I take everything Morningstar says with a grain of salt, it's one of several sources I use. They do have some good core information.

I check out the ratings also however with many of the stocks I've followed over a period of several years there seems to be little correlation between the rating and the stock performance.

 

[afm199]

I check out the ratings also however with many of the stocks I've followed over a period of several years there seems to be little correlation between the rating and the stock performance.

Yeah, I'm pretty cautious using morningstar but their charts and reports are pretty thorough. I just don't pay too much attention to their star ratings.

 

[afm199]

And here's a runner.

Eastman Kodak, once a top US stock and component of the Dow Jones, recently very much in the doldrums, just doubled in price to $5 on news that they will be taking a runner in Blockchain tech and issuing "Kodak Coins."

I wonder if GoPro will be next.

 

[Blankpage]

Yeah, I'm pretty cautious using morningstar but their charts and reports are pretty thorough. I just don't pay too much attention to their star ratings.

Back in 09 very few would have bought BAC at less than $5/share base on the stocks rating at that time.

Ratings seem more of a score of what a stock has done as opposed to what it will do. I look at the ratings but mostly ignore them.

 

[UDRider]

If you mean a Roth IRA, yes you should always max that out before funding a generic brokerage account. The former grows tax-free. The latter generates dividends and capital gains that get taxed every year.

Catch is between $118k and $133k how much you can get to contribute reduces, and after $133k it's zero. For single person.

 

[Yakoo752]

And here's a runner.

Eastman Kodak, once a top US stock and component of the Dow Jones, recently very much in the doldrums, just doubled in price to $5 on news that they will be taking a runner in Blockchain tech and issuing "Kodak Coins."

I wonder if GoPro will be next.

Digital rights. It actually makes sense and is a good use of block chain.

“An encrypted, digital ledger of rights ownership for photographers.”

 

[SteelerFanatic]

Ok, I didn't go to college so I will just start with that.

I have read the technical differences between an IRA and a ROTH and I still don't get it.

Can someone with real-world experience tell me why I should pick one or the other?

Investment Profile: age 30-40, has 401k, ESPP, and Stock Grants, believes in the power of dividends, can handle investments on the riskier side for now if growth is a potential, saves every single $2 bill he comes across.

 

[UDRider]

Ok, I didn't go to college so I will just start with that.

I have read the technical differences between an IRA and a ROTH and I still don't get it.

Can someone with real-world experience tell me why I should pick one or the other?

Investment Profile: age 30-40, has 401k, ESPP, and Stock Grants, believes in the power of dividends, can handle investments on the riskier side for now if growth is a potential, saves every single $2 bill he comes across.

Basic primer
Contribution/deduction limits based on income limits

 

[bikeama]

Ok, I didn't go to college so I will just start with that.

I have read the technical differences between an IRA and a ROTH and I still don't get it.

Can someone with real-world experience tell me why I should pick one or the other?

Investment Profile: age 30-40, has 401k, ESPP, and Stock Grants, believes in the power of dividends, can handle investments on the riskier side for now if growth is a potential, saves every single $2 bill he comes across.

Easy to do.

Put $1,000 in a stock lets say HRL Hormel Foods where I worked. If I would have done this in 1980 this would be the outcome

IRA $1,000 1980 dollars adjusted stock price in May 1980 $0.23* or 4347 share today. Today's value $36.40 a share. $158,260.00 ALL is taxable when you take it out. Say 20% or $31,652 in taxes you get to keep $126,607


Now Roth IRA same $1000 but you paid tax before you put it in the Roth IRA. So you are out an additional $200 if you are in a 20% bracket. Growth is the same and you still end up with the same $158,000 you get to keep it all without paying tax on it when you take it out after retirement.


The above growth numbers are real. I did buy $25.00 in HRL stock each week when I worked. Wish I would have put it in a ROTH IRA.


*Many splits and lots of growth. I have not included the divided that is near 2% per year.

 

[SteelerFanatic]

Ah. It appears I don’t qualify for a Roth.

 

[afm199]

Ok, I didn't go to college so I will just start with that.

I have read the technical differences between an IRA and a ROTH and I still don't get it.

Can someone with real-world experience tell me why I should pick one or the other?

Investment Profile: age 30-40, has 401k, ESPP, and Stock Grants, believes in the power of dividends, can handle investments on the riskier side for now if growth is a potential, saves every single $2 bill he comes across.

Sure. Regular IRA is typically funded with earned money, which you do NOT have to pay taxes on. If you put $3k in your IRA today, and start pulling it out when you turn 70, you will be taxed at whatever rate is in effect at age 70.

ROTH IRA is funded with taxed money, you can't deduct it. If you put $3k in one today, you have to pay taxes on that income, or rather, you can't write off that income. BUT, when you turn 70 you pay no taxes on withdrawls.

So regular IRA earns money tax free but you must pay taxes on withdrawls.
ROTH IRA earns money tax free and you pay no taxes on withdrawls.

From my point of view, at retirement age, it's super nice to pull money out of the IRA, tax free. Every penny I take from an IRA is taxed.

 

[ABC]

I just became a part of calpers. I will eventually get retirement from liuna and I have a 401k setup through my employer as well.

I have never looked into ira's or Roths.

You can only put in one set amount of money and it matures over say 20 years or so?

So if i put in 5000 bucks how much would it be worth when i retire?

 

[UDRider]

Depends on what you invest in.

 

[rodr]

Easy to do.

Put $1,000 in a stock lets say HRL Hormel Foods where I worked. If I would have done this in 1980 this would be the outcome

IRA $1,000 1980 dollars adjusted stock price in May 1980 $0.23* or 4347 share today. Today's value $36.40 a share. $158,260.00 ALL is taxable when you take it out. Say 20% or $31,652 in taxes you get to keep $126,607


Now Roth IRA same $1000 but you paid tax before you put it in the Roth IRA. So you are out an additional $200 if you are in a 20% bracket. Growth is the same and you still end up with the same $158,000 you get to keep it all without paying tax on it when you take it out after retirement.


The above growth numbers are real. I did buy $25.00 in HRL stock each week when I worked. Wish I would have put it in a ROTH IRA.


*Many splits and lots of growth. I have not included the divided that is near 2% per year.

I think your regret is unfounded. In the Roth case you'd invest only $800 because that's all you'd have left after the tax bite. At the end you still have only the $126,607.

The difference is that with a standard IRA you are getting the tax break during your peak earning years when tax rates are higher. When you withdraw from the IRA your income and tax rate are presumably lower. This is the advantage of the standard IRA.

Be happy, chances are you did the right thing.

 

[Reli]

The difference is that with a standard IRA you are getting the tax break during your peak earning years when tax rates are higher. When you withdraw from the IRA your income and tax rate are presumably lower. This is the advantage of the standard IRA.

That applies to high earners who won't make as much when they retire. But believe it or not, there are actually some people who will maintain a similar income level in retirement (or even more if they keep working or have rental property)

Plus, with how bankrupt this nation is, most people believe tax rates will be higher in the future.

 

[bikeama]

That applies to high earners who won't make as much when they retire. But believe it or not, there are actually some people who will maintain a similar income level in retirement (or even more if they keep working or have rental property)

Plus, with how bankrupt this nation is, most people believe tax rates will be higher in the future.

This.

I saved and set up what I call an income stream* for my retirement. So far everything is working. I will be 68 and be looking at RMD from tax-deferred accounts in two years. I have been withdrawing for 8 years to keep the RMD lower. I am already on a higher income than when I retired. The RMD will kick my taxes up to a higher rate. Still better to have to pay the tax than not have the money.



*income stream = Pension, stocks, savings, tax-deferred accounts and rental property. Note on tax planning. Your home and rental property will pass to your kids at the current value. The only time you get to beat the tax man. No capital gains, all my property will pass to the kids.