Comments on: It’s one thing learn something it’s another thing to actually act on the information http://myfinancialjourney.com/archive/its-one-thing-learn-something-its-another-thing-to-actually-act-on-the-information Sun, 03 Jul 2011 02:33:03 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: JohnR http://myfinancialjourney.com/archive/its-one-thing-learn-something-its-another-thing-to-actually-act-on-the-information/comment-page-1#comment-295 JohnR Thu, 22 Feb 2007 21:45:09 +0000 http://www.myfinancialjourney.survivingkids.com/archive/its-one-thing-learn-something-its-another-thing-to-actually-act-on-the-information#comment-295 1 more bonus... in the 15% marginal tax bracket, i'm taking a $1500 loan for 0% interest until i balance out my tax payments by filing an temporary change to my W4 in december. Speaking of that... I know there are penalties for owing too much at tax time. But, would there be any penalty for, say, claiming 25 deductions for most of the first part of the year, then claiming 0 and adding enough in the last month or 2 of paychecks in the year to balance out at near the point of owing 0 taxes? 1 more bonus… in the 15% marginal tax bracket, i’m taking a $1500 loan for 0% interest until i balance out my tax payments by filing an temporary change to my W4 in december. Speaking of that…

I know there are penalties for owing too much at tax time. But, would there be any penalty for, say, claiming 25 deductions for most of the first part of the year, then claiming 0 and adding enough in the last month or 2 of paychecks in the year to balance out at near the point of owing 0 taxes?

]]> By: JohnR http://myfinancialjourney.com/archive/its-one-thing-learn-something-its-another-thing-to-actually-act-on-the-information/comment-page-1#comment-296 JohnR Thu, 22 Feb 2007 21:39:40 +0000 http://www.myfinancialjourney.survivingkids.com/archive/its-one-thing-learn-something-its-another-thing-to-actually-act-on-the-information#comment-296 That is hilarious. But sounds like something I would do. I started reading personal finance blogs about a week ago and am already acting on suggestions from blogs. My move? I have about $55k in a 401k and $8k in my ROTH IRA and a spousal ROTH (just getting ready to do the 2006 contributions for those). Anyway, since $19k of the money in the 401k is from a previous employer, they allow you to roll that over even while you are still employed there. So, I'm rolling that over into an IRA. Then, I'm going to transfer about $10k of it into my Roth IRA. I'll pay the tax man next year for that ammount. Since I'm about $10k under the next tax bracket, I'll still pay lower taxes. Result: 1) Rolling to the roth effectively increases my retirement income. 2) I get closer to a 60/40 ratio of pretax retirement savings and post tax, keeping my current taxes under the next bracket while also managing the % I will pay at retirement. 3) Adding a bit of insurance against tax rates increasing. I know this would be moot if my employer had a roth 401k, but I still think I am taking a good step toward good retirement management. I plan to to the $10k rollover again next year and will also do more of this if I change jobs. That is hilarious. But sounds like something I would do. I started reading personal finance blogs about a week ago and am already acting on suggestions from blogs. My move?
I have about $55k in a 401k and $8k in my ROTH IRA and a spousal ROTH (just getting ready to do the 2006 contributions for those). Anyway, since $19k of the money in the 401k is from a previous employer, they allow you to roll that over even while you are still employed there. So, I’m rolling that over into an IRA. Then, I’m going to transfer about $10k of it into my Roth IRA. I’ll pay the tax man next year for that ammount. Since I’m about $10k under the next tax bracket, I’ll still pay lower taxes.

Result:
1) Rolling to the roth effectively increases my retirement income.
2) I get closer to a 60/40 ratio of pretax retirement savings and post tax, keeping my current taxes under the next bracket while also managing the % I will pay at retirement.
3) Adding a bit of insurance against tax rates increasing.

I know this would be moot if my employer had a roth 401k, but I still think I am taking a good step toward good retirement management. I plan to to the $10k rollover again next year and will also do more of this if I change jobs.

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