Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Buehler445]

Originally Posted by Bugeater

Ah hell. Should've known it wasn't that simple. Apparently the only way to itemize deductions is to have a giant mortgage and a shitload of kids.

Something else occured to me, lewdog mentioned that the max we can put in the 401k is $18,000/yr, and the Mrs' pension buyout will well exceed that. So her idea of putting it all in 401k won't work then. Maybe we should just take the tax hit and buy a Corvette. /shrug

Can you roll the pension into a 401 or IRA? Typically rolls are not taxable unless you're rolling from traditional IRA to Roth. Then you have to pay tax on the amount to make it after tax contributions.

[Bugeater]

Originally Posted by Buehler445

Can you roll the pension into a 401 or IRA? Typically rolls are not taxable unless you're rolling from traditional IRA to Roth. Then you have to pay tax on the amount to make it after tax contributions.

I don't know, you're the accountant here. I fix toilets for a living.

[Rain Man]

Originally Posted by Buehler445

Can you roll the pension into a 401 or IRA? Typically rolls are not taxable unless you're rolling from traditional IRA to Roth. Then you have to pay tax on the amount to make it after tax contributions.

If it's a pension payout, you can definitely roll it over into an IRA without any taxes or penalties. You have to do within a certain amount of time after receiving the payment, though.

I would definitely go that route. If you use it to buy rental property, it's the equivalent of paying 45 percent above the asking price since you're going to get taxes and penalties.

It is possible to buy a rental from within your IRA, but it's really hard to do. I looked into it once.

[DRU]

Originally Posted by Bugeater

Ah hell. Should've known it wasn't that simple. Apparently the only way to itemize deductions is to have a giant mortgage and a shitload of kids.

Something else occured to me, lewdog mentioned that the max we can put in the 401k is $18,000/yr, and the Mrs' pension buyout will well exceed that. So her idea of putting it all in 401k won't work then. Maybe we should just take the tax hit and buy a Corvette. /shrug

Create a small business out of your hobby. Now you're itemizing, and many of your personal expenses can become business expenses, so you get an above-the-line deduction on lots of stuff you aren't right now.

Also, with a small business with no employees (other than you and your spouse) you can each contribute up to $18k like you said, but then the business can also contribute 25% of your salary up to $38k, giving you a total contribution limit of $56k. That's for each of you, too, so that's $112k contribution you could make to a traditional or ROTH 401k if you so choose to (many would argue there are better investment opportunities with that much cash.)

Also, with a small business you can hire your kids if you have any and get all sorts of tax breaks there, too. I've gone into detail about some of these things in threads under DC.

Nothing beats owning a business when it comes to keeping your money in your own pocket. Keep working your job, start a small business on the side, and you will get to keep a LOT more of your earned income from both the job and your small business. This extra money can be used to get out of debt more quickly, and then start buying more assets that generate more cash flow...sending you on lovely journey of wealth building.

[O.city]

Originally Posted by Rain Man

If it's for your own business, that might be great. But in the long run, I think commercial real estate is going to be a declining market. Retail sales places are in a slow race toward bankruptcy as shopping continues to move online, and I think even service businesses are downsizing due to things like telecommuting and offshoring. I don't see much indication that commercial real estate demand is going to go up in the long term.

Hadn't thought of that. Good stuff man.

Although, my plan is to avoid retail stuff if I can. An insurance agency, maybe a pharmacy etc.

[Buehler445]

Originally Posted by Bugeater

I don't know, you're the accountant here. I fix toilets for a living.

There is a million different ways those things are set up. You need to talk to the plan administrator BEFORE you do anything. If they send you a check it becomes about impossible to undo.

If you can roll it do it.

[TigeRRUppeRRcut]

Very informative thread. I've flirted with the idea of real estate and rentals, of course my financial advisor who manages my ROTH/401k has dissuaded me from this as he has vested interest in how my portfolio does. In a down market I can't help but think about the potential of buying up a few small town homes in a college town to use as rentals. Heck, even a couple of condos to function as airbnbs seems profitable.

[Demonpenz]

Does your pension roll out count towards the max per year you can put in an ira? I might just say max out 401k and keep everything simple so you boke ride more and not do work.

[Rain Man]

Originally Posted by Demonpenz

Does your pension roll out count towards the max per year you can put in an ira? I might just say max out 401k and keep everything simple so you boke ride more and not do work.

Nah, rollovers don't count toward your annual contribution. They're just moving around past contributions.

[Bugeater]

Originally Posted by Demonpenz

Does your pension roll out count towards the max per year you can put in an ira? I might just say max out 401k and keep everything simple so you boke ride more and not do work.

Originally Posted by Rain Man

Nah, rollovers don't count toward your annual contribution. They're just moving around past contributions.

So there's no limit on a rollover from pension-->401k? We can do that straight shot with no issues?

And yeah, retiring so I can bike ride more and not do work is what I'm hoping for.

[lewdog]

Originally Posted by Bugeater

So there's no limit on a rollover from pension-->401k? We can do that straight shot with no issues?

And yeah, retiring so I can bike ride more and not do work is what I'm hoping for.

Here boo

https://www.fool.com/knowledge-cente...ver-rules.aspx

[Bugeater]

Originally Posted by lewdog

Here boo

https://www.fool.com/knowledge-cente...ver-rules.aspx

Thanks bae.

That seems like the most sensible thing to do. Like Rain Man pointed out, it wouldn't make sense to take the tax hit just have the opportunity for all the headaches a rental property would bring.

[lewdog]

Originally Posted by Bugeater

Thanks bae.

That seems like the most sensible thing to do. Like Rain Man pointed out, it wouldn't make sense to take the tax hit just have the opportunity for all the headaches a rental property would bring.

Definitely agree. If you don't need the income, a rental property doesn't make sense.

[scho63]

Originally Posted by Rain Man

If it's for your own business, that might be great. But in the long run, I think commercial real estate is going to be a declining market. Retail sales places are in a slow race toward bankruptcy as shopping continues to move online, and I think even service businesses are downsizing due to things like telecommuting and offshoring. I don't see much indication that commercial real estate demand is going to go up in the long term.

Not in major markets. Commercial real estate is moving towards open centers with lots of upscale food restaurants as tenants.

The DC market place including Northern VA and Maryland are all on fire. Occupancy in class A and B+ properties are mostly 90-95%. It's crazy.

Look at all the REITS like DDR, Federal Realty, KImco, Regency Centers, Brixmor, all have great returns from high occupancy.

Vornado out of New York just merged with JBG, a local DC powerhouse in commercial real estate.

[Hog's Gone Fishin]

Looks like another opportunity to buy U.S. Steel (X)is developing . Currently at $22. The Trump relations with China has driven it back down. I think this could make 100% profits in the next 12 months. I have all my stock funds tied up right now but may have to sell some off to jump in on X