Oh man, you left out the best part:
I cashed out my 401k of about 80k and went all in on gme calls far out of the money.
Can’t wait until Republicans are in power and Social Security is privatized.
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On a completely unrelated note, I always wonder if mega wealthy people (e.g Bezos) get arsed up to do a back door roth. Apparently his accountant claimed some sort of minuscule child tax credit for him even after he became extremely wealthy, so maybe one of his people just does it for him as a matter of course.
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Question for the tax savvy. Are there circumstances where you can cash out a 401k but not roll it over into an IRA. If he was going to donk around why wouldn’t he at least do it in a tax protected account.
You can’t roll out of most 401k plans to an IRA without leaving your job. (I’m also not sure if any IRAs allow options trading. Probably these days some do.)
AFAIK you can always cash out your 401k if you want to pay penalties. If this guy was confident enough his calls would pay off like they did it’s even an easy decision to do so. Not that he should have been that confident, but it also illustrates that accepting the penalties is an insignificant level of dumb in his overall scheme.
I don’t think so. You can usually take a loan from your 401k, but most of the plans I’ve been involved in did not allow cashing out without leaving the job. I do know some, particularly those that offer after tax contributions, allow rolling out to IRAs. (This is how people do mega backdoor Roth’s.)
So I jinxed myself. Started the car today and got a bunch of different warnings and it idled really rough for a few minutes. Took it over to the garage where they ran diagnostics and they found several codes for cylinders misfiring.
I had forgotten that just when the pandemic started the car overheated a couple of times in bad traffic and we had narrowed it down to the head gasket failing when the engine got really hot. Since I’ve only been driving around town the past 18 months, I haven’t had any problems, but apparently this is likely all related.
This all goes back to running over a fence post on the highway about 5 years ago and piercing the radiator and overheating the engine stupidly driving it to the shop instead of pulling over and getting a tow. The shop thinks this overheating incident compromised the head gasket causing it to start failing many years sooner than expected. At least I got an extra 1.5 years out of it, but it looks like either several grand of work or time to move on.
Even if you hold the outlook that companies like Amazon, Walmart and so forth are evil - which they are in serious ways, you’re still going to be confronted with decisions that matter to you.
What I mean is that your dollar to Amazon basically goes unnoticed while the returns of your invested dollar for two decades could very easily become life changing money. Sure, you made that corrupt company a smidgen bit more evil but you also helped yourself.
So all the people I pegged as schmucks at my cigar lounge are now only talking about stocks and crypto. I think the bull run is done.
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This is a huge red flag actually. Huge.
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I think the Social Security implementation is a good topic. The current system is bad, because the payroll taxes are regressive, and it relies on current workers to finance a population that is living longer all the time.
The benefit calculation is pretty progressive, though, so that part would be good to keep and increase.
The money should come from societal productivity over the career of the beneficiary, but not via individual investment decisions (clearly). One idea is to shift from payroll taxes to VAT, maybe with a progressive refund. This would be more palatable (to corporations) than raising corporate taxes directly.
Having the Social Security trust fund invest directly in stocks and bonds is another idea, like pension funds do. With the amount of money involved, it could skew market dynamics.
Obviously, nothing remotely like this ever happens, because we can’t have sane discussions about anything, never mind rewriting Social Security laws.
I think Social Security investing in equities is a bad idea. You’re already seeing firms like Black Rock have enormous influence over corporate governance, if SS invests in stocks the government will have huge power ripe for exploitation by the donor class.
The donor class already exercises this power directly. Filtering some of it through another hand (government) isn’t going tho alter the status quo.
Bigger problem is the inevitable price inflation that big an influx of money will cause. It’s a huge huge bonus to the already wealthy so the entire notion is super regressive even if you could design out the other flaws.
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I think they should just eliminate the annual max SS contribution. It’s a privilege to make over the max, and anybody that does can easily afford to pay it on their entire salary. I would guess that would go a long way toward shoring up the system?
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I mean yes obviously. They also need to expand it to every form of income.
It’s such lizard brain Washington bullshit that we “have to” identify distinct revenue streams to “pay” for stuff. Hey democrats, you’re in charge of everything, blow our obviously broken system the fuck up and show you can lead.
A big part of this is it’s all fucking boomers in charge. They’re a hopeless generation of politicians.
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https://pluralistic.net/2021/06/19/dynastic-wealth/#caste
A week later, a very smartly turned out Barclays “tax specialist” came by the academic research center where I’d borrowed a desk to meet with me. She was wildly excited to discover that I was on a work visa and not a UK citizen.
She told me that this made me eligible to become a “non-dom” – someone living in the UK, but not “domiciled” there – and therefore not subject to any tax at all.
She laid out a whole plan for me: I could establish residence in one of the Channel Islands (Jersey, I think?), incorporate a shell company there, and continue to get free health care from the NHS, use the public roads, etc – all without paying a penny to HM Exchequer.
And when I was ready to buy a house, the whole thing would only get better: I could buy it through the shell company, reverse-mortgage it, rent it to myself, take fabulous deductions on the way, and pass it on tax-free by transfering the shell company rather than the house.
It was dizzying, and I kept asking her to go back and explain it again. She assured me that it was legal and normal, what every non-Briton living in the UK should do, and really poured the pressure on.
It was weirdly spellbinding, like a wizard was demonstrating an interdimensional portal to me and asking if I wanted to go through it to a magical land – a magical land that “everyone else” was already visiting on the reg.
During the pandemic, Jeff Bezos made 11 figures. Elon Musk probably made 12.
Start there if you’re looking for revenue streams.
Something I think can open peoples eyes is playing around with a compound interest calculator. If you put in annually say a max 401k contribution with an assumed 5% match plus a max Roth (which comes to about $26.5k) and run it out 30 years. But then back up to 25 years, 26 years, 27 years and see how much of a jump your money is making in those later years compared to the contribution that year. That’s in large part due to all those early contributions.
My problem was I couldn’t afford to max everything until I was about 48 y/o.
Playing with a compound interest calculator is also a good way to show people how much “only a 1% fee” really costs them.
Absolutely rekt. Long but worth it.
https://twitter.com/chrisbloomstran/status/1406377236966617089?s=21