Social Security - your thoughts?

#727
#727
What if you want your children to be beneficiaries of the funds?

They’ll get no tax break if they inherit a 401(k) and 100% of it is taxable income to them.

But by borrowing from a 401(k) and investing in an appreciating asset, then the stepped up tax basis would kick in and the heir pays zero taxes on the money pulled out of the 401(k). Right? Or does the IRS code include an exception of some sort to prevent a possible tax avoidance?
 
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#728
#728
Thunder Good-Oil said:
What if you want your children to be beneficiaries of the funds?

They’ll get no tax break if they inherit a 401(k) and 100% of it is taxable income to them.

But by borrowing from a 401(k) and investing in an appreciating asset, then the stepped up tax basis would kick in and the heir pays zero taxes on the money pulled out of the 401(k). Right? Or does the IRS code include an exception of some sort to prevent a possible tax avoidance?
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Having just went through this, this is referred to as an inherited IRA. You have ten years to pull it out with annual minimum disbursements. There is a formula that you use to determine that disbursement. You pay income tax on that disbursement. You can take it all at once but my feeling was place it in an inherited IRA account and invest it hoping it will offset the tax. Mine has done well and has gained over 30% in about 18 months including the disbursements.

Edit: I didn't pay attention to who posted this. I'm sure you knew all that. 😅
 
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#729
#729
InVOLuntary said:
Having just went through this, this is referred to as an inherited IRA. You have ten years to pull it out with annual minimum disbursements. There is a formula that you use to determine that disbursement. You pay income tax on that disbursement. You can take it all at once but my feeling was place it in an inherited IRA account and invest it hoping it will offset the tax. Mine has done well and has gained over 30% in about 18 months including the disbursements.

Edit: I didn't pay attention to who posted this. I'm sure you knew all that. 😅
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I’m just wondering if there would be an advantage of pulling everything possible out of the 401(k) by borrowing against it and therefore replacing possibly volatile holdings in the 401(k) with a predictable distribution. Then invest more aggressively with what is borrowed after putting it into an after tax account. If investments lose money in the after tax account then they can be harvested and used to shelter gains in the after tax account. If the after tax investments take off, they can be passed on to heirs and avoid any tax by using the stepped up basis rule. If the current account holder needs cash then they can borrow against the after tax account. A downside is that there’d have to be enough cash available outside of the 401(k) to pay the interest back to yourself.
 
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#731
#731
hog88 said:
What peaks my interest is using it to buy property, if I'm loaning myself money and paying myself interest on an income producing asset how do I lose?

Also brings up a question, I wonder if you could use that loan to buy an asset to hold within a retirement account?
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I have at times loaned money from my self directed IRA. Mid-Ohio Securities specialized in managing IRAs for property purchases and real-estate lending.
 
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#734
#734
GroverCleveland said:
I have at times loaned money from my self directed IRA. Mid-Ohio Securities specialized in managing IRAs for property purchases and real-estate lending.
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This has me wondering if I can get a loan from my IRA instead of taking the current 34% tax hit when I need $10k. My 401k allowed it but I was forced to close it when I got laid off.
 
#736
#736
marcusluvsvols said:
This has me wondering if I can get a loan from my IRA instead of taking the current 34% tax hit when I need $10k. My 401k allowed it but I was forced to close it when I got laid off.
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Remember Charlotte was declared a federal disaster area the month you were let go so you might be able to avoid the penalties that way...
 
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#737
#737
BigOrangeMojo said:
Remember Charlotte was declared a federal disaster area the month you were let go so you might be able to avoid the penalties that way...
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I have a finance/tax situation i would love to discuss with you privately because I am pretty much flying blind. Unfortunately I didn't see this for 4 hours because I am an idiot who doesn't check the red bell up there^^^ but sometime soon when we are both on, I would like to give you my email so we could communicate if that's OK with you. I will post it here somewhere and then delete it after you grab it. Or, there's a couple guys who still post here that already have my email and or phone number...if you're in touch with them. Like Dink, Ape, Louder, McDad...
Anyway let me know and if you're busy man, I understand. No big deal.
 
#738
#738
marcusluvsvols said:
I have a finance/tax situation i would love to discuss with you privately because I am pretty much flying blind. Unfortunately I didn't see this for 4 hours because I am an idiot who doesn't check the red bell up there^^^ but sometime soon when we are both on, I would like to give you my email so we could communicate if that's OK with you. I will post it here somewhere and then delete it after you grab it. Or, there's a couple guys who still post here that already have my email and or phone number...if you're in touch with them. Like Dink, Ape, Louder, McDad...
Anyway let me know and if you're busy man, I understand. No big deal.
Click to expand...

Where do I send the nudes?
 
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