Comments on: Ask Todd

By: Financialmentor

Financialmentor — Wed, 08 Feb 2012 22:48:48 +0000

@alexanderthegreat When younger I tend to favor tax deferred and tax free for two reasons – the first is exactly as you cited (tax deferred compounding), and the second is because it puts a legal fence around your fortune both in terms of asset/lawsuit protection and difficultly/high cost in accessing the cash during the inevitable setbacks you will encounter during life. In short, it gives you three important advantages and minimal disadvantages in comparison. Hope that helps you sort through your personal situation.

By: Financialmentor

Financialmentor — Wed, 08 Feb 2012 22:45:05 +0000

@grease It is net of taxes and adjusted upward by the tax rate within the calculator to determine total cost burden that your assets must overcome.

By: alexanderthegreat

alexanderthegreat — Wed, 08 Feb 2012 21:50:40 +0000

Need advice on whether to go ROTH or NOT. My wife and I are in our late 20s/early 30s and we’ve got investments in ROTH 401ks and Traditional 401Ks and we both have ROTH IRAs. We both max out our 401ks and IRAs. I like to go all out ROTH in 401ks AND IRAs because I like the tax free earnings that I would earn in retirement. We are currently in the upper end of the 25% tax bracket. Along with the tax free earnings, I’m not sure if we’ll be in a higher tax bracket in retirement so we prefer paying taxes today as everything suggests taxes will be higher 30 years from now. Are we doing the right thing by putting all our retirement savings in after tax accounts. Should we diversify our tax situation and put some in tax deferred accounts?

By: Todd Tresidder

Todd Tresidder — Fri, 27 Jan 2012 22:30:15 +0000

@Grease – It is net of taxes – spendable income or actual expenses. The calculator adds the taxes and adjusts for inflation to figure out true need. If you aren’t clear just look at the table provided and you can see the columns and how the numbers flow.

Hope that clarifies, and thanks for asking. I will add that to the instructions…

By: grease

grease — Fri, 27 Jan 2012 13:06:15 +0000

Hey Todd. I just ran across your “Ultimate Retirement Calculator” and have a question. In the ‘desired annual retirement incomet’ field, is this net of taxes or is this gross before taxes. In other words, are your calculations grossing up this income to account for the tax % entered or do I have to do that?

Thanks,

Dennis

Mooresville, NC

By: Financialmentor

Financialmentor — Wed, 18 Jan 2012 22:05:45 +0000

@jlmurf If I were in your situation I wouldn’t have any problem with spending 5K per month. Assuming your investments do nothing (don’t win or lose – easily achieved with T-Bills or comparable) that would 60K per year. When you figure in a basic investment return the risk of running out is very small. The key is to make sure you don’t lose significant principle along the way. Stated another way, you claim a 5% yield which almost equals your proposed spending in perpetuity. Again, as long as you don’t lose significantly to earn that return it should be a relatively sound spending pattern. What distinguishes your situation from my writing on safe withdrawal rates is your age. At 82 you can spend some principle (unless you’ve discovered a magic potion for eternal youth).

Hope that helps…

By: jlmurf

jlmurf — Wed, 18 Jan 2012 04:00:31 +0000

I just turned 82 years old and have about $1,008,000 in an IRA. I expect (hope) to live another 18 years.

I would like to withdraw about $5,000 a month. Question: will I run out of IRA money before my demise?

If so, when and, if so, how much should I be drawing out each month. My current portfolio is yielding about 5%.

By: Todd Tresidder

Todd Tresidder — Mon, 14 Nov 2011 21:16:39 +0000

@Penny – Thanks for the acknowledgement on this site. The reality is I have more work here than I can handle. You could offer up a guest post or two to try and bring a unique perspective or voice here. If people resonate and the writing is high enough quality you never know what can happen. The point being, if you are truly committed then just dig in and get started somewhere. Hope that helps…

By: Penny

Penny — Mon, 14 Nov 2011 17:32:18 +0000

I would like to know how I can get a job in this field. I did financial advising but felt like it did not connect well with the client sometimes because you were always being pressured to sell more than educate or help your client.

I do have a fairly strong financial background. I had my LLQP, secrities license, 2 courses towards my CIFP and 2 year Accounting diploma as well. My passion is to teach and help people with their finances, not just selling but helping them with their credit problems as well.

Please let me know what path I can take to do this type of work. I feel this would keep me motivated and feel like I have accomplished something in life as well.

Regards

Penny

P.S. I think this website is phenomenal and thank you.

By: Todd Tresidder

Todd Tresidder — Thu, 27 Oct 2011 04:52:54 +0000

@Joe – This would require a lengthy and thorough analysis to properly explain. Given that it doesn’t exist anywhere on my site that should probably tell you something. If you want to learn more about this there are plenty of sites on the web that will teach you all about it. Just be careful… they all have something to sell you besides education!