What did I think of it??? I find it fascinating that you came up with that question and then dug for the answer. I would have lost a LOT of money betting the other way. 🤣 This kind of video should give your customers a better sense of security for choosing you. Well done!

There you go Kirk! Thanks for watching!

It is the loss of the year, 1 year, right? So take a loss on Tesla if down this year. It isn't a loss over the life span, that wouldn't make sense unless you are trading.

Actually, the way that dividends and capital gains are taxed now (up through 2025), it’s possible to pay 0% tax on them up to a certain level. Start by understanding that tax deductions (like $20k or more) offset the tax on income that’s taxed at an ordinary income tax level, and then the dividend and capital gain income beyond that income can be taxed at 0% up to say $45k or so. Also, taking a capital loss up to $3000 can wipe out the tax on another $3,000 of ordinary income tax. So, if one has a lot of tax deductions, it could make sense to plan to use those deductions with taxable income rather than paying more taxes than absolutely necssary to convert all tax-deferred income to non-taxable income. Thus it can be helpful to have assets in different kinds of “buckets” with different tax characteristics in order to adapt to the different circumstances you may have.

@dmulvany thank you for sharing. I know that you can pay 0% on capital gains and dividends, so long as they are long term / qualified and your income low enough. In this example they were showing investing 7k into a Roth vs into a taxable account consistently over a long period of time. I can't remember exactly the income tax bracket in the example, but I can't imagine that a taxable account would actually end up better for most people.

Also consider that the tax code is less likely to change regarding the Roth IRA vs the taxable account. The Roth is also protected from creditors/lawsuits.

Love it Yes! Will continue to expand on this topic with the same person

Thanks for watching! Glad you enjoyed that 😅

Ha! Glad you enjoyed that! Thanks for watching

I make 56k a year and can do these proposals the income doesn't matter so much. Maxing an IRA every year isn't hard it's less than the average car payment. If you get paid bi weekly it's 250 a paycheck. This stuff isn't just for the "Rich". You can have an income increase in retirement if you want.

All numbers are for this year (2024) when married filing jointly. IIRC single filters are about 1/2 these dollar amounts. Your standard deduction is $29,200. After that your traditional ira/401k withdrawal is going to be taxed at least 10%, which runs out after $23,200 more and then you are paying 12% on the next up to $94,300. If you invest instead in a taxable account, you can get a long-term capital gains rate on long-term gains and qualified dividends. This rate is 0% up to $94,050 and you still get that $29,200 standard deduction so no taxes on up to $123,250 income. And you can use the money any time without a 10% penalty. The only thing better than a taxable account is a Roth.

@@Sylvan_dB I don’t think you understand. You completely ignored the 30%+ in taxes you paid on the front end to get your income into a taxable brokerage account. With a traditional, you have the ability to pay no taxes on the contributions, no taxes on the growth, and no taxes on the withdrawals (with standard deduction). You also get the tax savings up front to potentially invest in a Roth IRA or taxable brokerage account for added growth. Plenty of videos on KZfaq explaining these aspects in detail. The traditional IRA or 401K makes a lot of sense for high income households, which is why it’s criticized as an advantage for the upper class who utilize it the most.

@@CalmerThanYouAre1 If you make enough to be in the 30% bracket, you won't be able to deduct a traditional IRA. 401k is your only option. And go ahead, do it. I did. And in the 30% bracket that's probably a decent choice. But I sure wish I had filled out the 24% tax bracket instead the last several years like I'll be doing this year and next while I do Roth conversions. A taxable account is a huge tax win if you are a highly compensated person. Taxes on cap gains are SO LOW you are almost certain to be in a higher bracket when you try to withdraw from your pre-tax accounts. Tthe no tax brackets are much higher for cap gains and qualified dividends than they are for pre-tax account withdrawals which are always ordinary income. And again, the gov't will take 10% if you need your money from a retirement account "early."

You are assuming making less in retirement than in one’s working years. My advisor informed me this would not be the case for me, so we are shifting my retirement investments to Roth Solo 401K , taxable brokerage accounts, HSA. I am no longer contributing to the SEP IRA, so I am no longer getting the upfront tax write-off that I had been. Edit: to a great extent her recommendations were based on tax brackets going up…