M4L, presumably you’ll be in a lower tax bracket post retirement so then your lower tax bracket in the future would have to rise above your current tax bracket. that would probably be a big jump, no? also, you’d be paying taxes on that income now, versus deferring payment for 30+ years, so also add in the difference of paying those taxes now versus being able to invest that money. etc. If you can afford it, putting away for retirement is a good thing. esp since we’ll probably won’t have social security benefits like currently paid out.
anyone thinks that the tax rate will be super high by time we’re eligible to withdraw from retirement accts – ie big enough increase in tax rates to eliminate the benefits of the deferral of current contributions?
Chicken, I’m all cash currently. cashed out recently when mkt stopped powering up. I was itchy to lock in the gains and partly so I can brag to my friends I’m up for the crisis vs they’re still climbing out of their holes. I would say my risk tolerance is high. in my mind, I would like to think I’m conservative but my actions reflect that of high risk investor – ie I usually have all $$$ in 5 or less equity positions
self contributions to 401k are not free money, they are taken out of your paycheck before taxes. it’s money that you’ve earned. so essentially it’s your own money but you are deferring your tax payment until when you withdraw it at retirement. if someone needs the cash now, then it makes sense for him to cease contributing to his 401k, as is his right.
the company match is free money but isn’t worth creating financial hardship for oneself just to make the 401k contribution.
Why would u opt out of 401K…it’s free money…u don’t have to buy equities…u can short them(SDS)…u can buy gold…u can buy a money mkt fund….it’s tax free money ’til Congress takes it away…..Slopefarm turn off the lights the party’s over….1st stop SPX 920…the forecast calls for PAIN….lots of it
Not spooked. Selloff has been widely anticipated and been the consensus viewpoint. it isn’t happening with any strength whatsoever. I believe we’ll get a string year-end rally as investment professionals are largely lagging the indices and show that they have too much cash. Clients aren’t going to want to see that at year end. Rally into year-end and then a sell off.
GDP numbers the next few quarters are likely to be surprisingly strong. Unemployment is a lagging indicator.
“chicken, you recommending all-cash, start short positions, go mainly cash,…?
Posted by: more4less at September 30, 2009 10:35 AM”
So much depends on your individual risk and liquidity profile – but would certainly have a decent slug in cash.
If you’re paying aggressively then small short positions with tight stops in industries with high operational leverage and have benefitted from replenishing inventories of late.
M4L, although a 5 stock portfolio is not truly diversified it’s also not necessarily high risk if they are low-beta and liquid.
I personally have ultra low risk tolerance for my own personal investments – I don’t need to be much wealthier but I can’t afford to be poor.
M4L, presumably you’ll be in a lower tax bracket post retirement so then your lower tax bracket in the future would have to rise above your current tax bracket. that would probably be a big jump, no? also, you’d be paying taxes on that income now, versus deferring payment for 30+ years, so also add in the difference of paying those taxes now versus being able to invest that money. etc. If you can afford it, putting away for retirement is a good thing. esp since we’ll probably won’t have social security benefits like currently paid out.
anyone thinks that the tax rate will be super high by time we’re eligible to withdraw from retirement accts – ie big enough increase in tax rates to eliminate the benefits of the deferral of current contributions?
Chicken, I’m all cash currently. cashed out recently when mkt stopped powering up. I was itchy to lock in the gains and partly so I can brag to my friends I’m up for the crisis vs they’re still climbing out of their holes. I would say my risk tolerance is high. in my mind, I would like to think I’m conservative but my actions reflect that of high risk investor – ie I usually have all $$$ in 5 or less equity positions
self contributions to 401k are not free money, they are taken out of your paycheck before taxes. it’s money that you’ve earned. so essentially it’s your own money but you are deferring your tax payment until when you withdraw it at retirement. if someone needs the cash now, then it makes sense for him to cease contributing to his 401k, as is his right.
the company match is free money but isn’t worth creating financial hardship for oneself just to make the 401k contribution.
Why would u opt out of 401K…it’s free money…u don’t have to buy equities…u can short them(SDS)…u can buy gold…u can buy a money mkt fund….it’s tax free money ’til Congress takes it away…..Slopefarm turn off the lights the party’s over….1st stop SPX 920…the forecast calls for PAIN….lots of it
two investment professional, two divergent opinions. Just goes to show that it’s a mug’s game…
Not spooked. Selloff has been widely anticipated and been the consensus viewpoint. it isn’t happening with any strength whatsoever. I believe we’ll get a string year-end rally as investment professionals are largely lagging the indices and show that they have too much cash. Clients aren’t going to want to see that at year end. Rally into year-end and then a sell off.
GDP numbers the next few quarters are likely to be surprisingly strong. Unemployment is a lagging indicator.
“chicken, you recommending all-cash, start short positions, go mainly cash,…?
Posted by: more4less at September 30, 2009 10:35 AM”
So much depends on your individual risk and liquidity profile – but would certainly have a decent slug in cash.
If you’re paying aggressively then small short positions with tight stops in industries with high operational leverage and have benefitted from replenishing inventories of late.