cellio | last few days

Sorry; no big weighty thoughts tonight. It's been a randomly-busy week, as opposed to a contemplative one.

Tonight at a board meeting we were looking at some revenue/expense forecasts. I wonder how many people in the room actually read footnotes. (I do, always.) I silently noted, in particular, the entry labelled "SWAG" (actually "swag", but I decided not to correct him :-) ). I contemplated it, decided the number sounded reasonable to me, and concluded that anyone who might have been able to offer a better number had already been involved in the process, so I did not ask him to clarify the "S".

I'm beginning to rethink personal investment strategy. I've always maxed the IRA/401(k), because you just do. The result is that most of my long-term money is in a retirement account that I can't touch, rather than mutual funds that I can. And I'm not convinced that the income tax rate at retirement beats the taxes I would pay now. Hmm. (This thought brought to you, in part, by the annual review of funds with the financial planner on Wednesday.)

Choir practice on Monday was small but functional. For the last few weeks I've been the only one on my part; fortunately, I can handle that. Unfortunately, though, the fact that we have to go to Toronto for Pesach on the Saturday before (not the Sunday before as I had been planning) means that we won't have part coverage for an SCA event we were going to sing at. Mind, the world doesn't end if we don't sing there, but it's still unfortunate.

The latest CD from the Austin Lounge Lizards, from 2003, has a song with the refrain something like "why can't we blow up Saddam?". Some topics are just riskier than others for the songwriter. I hope they got some mileage out of it. :-) (I had forgotten just how much I enjoy having a working source of music in my car.)

It's looking like the D&D group is going to cut over to version 3.5, with some adjustments made to avoid penalizing players too much on things that got drastically changed for the worse. Saturday night we're having a rules discussion before the game.

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It will never get done...

Was wondering if you can recommend someone in the NYC area who might be willing to play the hammered dulcimer for the ceremony...or possibly allow you to use theirs (since you'd have the added advantage of knowing Jewish music).

Shabbat Shalom!

Devo

Your financial advisor may have told you this already, but....

Even if you'll be in the same tax bracket at retirement as you are now, the taxes will be taken off of your distributions from the IRA/401k, after they've had mumble-mumble years to accumulate tax-free compound interest. If, say, you had this money in a regular stock-market mutual fund, you'd be paying capital-gains tax every time the fund manager cashed in one security to buy another one.

If you're in a low tax bracket right now, you might want to consider converting your IRAs to Roth IRAs. You'll have to pay a tax at the time of conversion, but when you retire, distributions from a Roth IRA are completely tax-free. Also, you can withdraw the principal from a Roth IRA at any time (obviously, not a good thing to do unless you really need the money).

You can also talk to your bank about getting a Roth IRA/CD. The interest rate sucks, obviously, but since it's a CD, it's FDIC-insured, and since it's a Roth IRA, you can withdraw the principal in case of financial emergency, and enjoy tax-free interest on retirement if no emergency ever strikes.

You can withdraw funds from an IRA, but unless it's for a few specific purposes, you get hammered with deferred income taxes and a hefty (10%) penalty. A Roth IRA is a great idea, because the growth and withdrawal (at retirement) are both tax free. I'd open one in a heartbeat if our oppressive government weren't punishing me for having a decent job. :-)

Personally, I max out my 401(k), even though my employer doesn't match our contributions. I also make monthly contributions to the kids' 529 accounts, monthly transfers from checking (where my paychecks go) to savings, and monthly deposits into a mutual fund account, an annuity, and a brokerage account. That's essentially a reflection of my basic investment rules: save a lot (I try to save 15-20% of my gross income), save regularly, and diversify across a few different markets and types of investments.

Truly, though, if you're saving regularly, you're already ahead of most of our fellow citizens. The savings rate of Americans is just terrible.

Hmm, they seem to have adjusted the income thresholds for contributions. While there is still a substantial marriage penalty, that might be an option now. (The year we got married I lost elligibility and stopped checking back. Sadly, I had not had the foresight to take the option when I was single.)

Yeah, withdrawing from an IRA is something I wouldn't do unless really, really pressed. On the other hand, I could conceive of things I might spend the money on other than putting it into an IRA in the first place, but the decision is irreversible for all practical purposes. So it makes sense to occasionally ask if that's what I want to be doing. (For IRA, read also 401(k).)

That's essentially a reflection of my basic investment rules: save a lot (I try to save 15-20% of my gross income), save regularly, and diversify across a few different markets and types of investments.

I take pretty much the same approach. Not as much of mine is automated. :-)

Truly, though, if you're saving regularly, you're already ahead of most of our fellow citizens. The savings rate of Americans is just terrible.

Yup. We're paying double for retirement -- we pay fully [1] into SS, but it would be sheer folly to assume we'll see a cent from it. Our parents relied on SS, and our (rhetorical in my case) children will probably be exempt from SS payments because necessity will have forced some enlightenment about personal responsibility and the system will have morphed into something else. We get the unfortunate middle ground.

[1] Yeah, I know there's an income threshold above which you don't continue to pay. You might be there (I'm not prying); I'm not.

Poking around has commenced. More later. Shabbat shalom!

Yup. The gamble is income taxes on principal + (lower) capital gains on earnings now, versus income taxes on P&E at a currently-unknown tax rate later. I think it still makes sense to do, but I'm gambling against a 50% tax rate in 2030. Which I could know in advance which party would control Congress when I retire. :-)

You don't need to worry about prying. It's not a big secret that if I'm living in the New York City metro area, and have had three kids in yeshiva, I'm probably doing a bit better than minimum wage. :-) Even though the income threshold for a Roth IRA is higher for married couples, my income is still too high to be eligible (not that I'd want a pay cut just for that!). I hope that they'll raise (or eliminate) that threshold. National savings are too low in general, and preventing people likely to have some more disposable income from putting it into various savings-type investment vehicles strikes me as counterproductive.

I've been poking around the Jewish-music community, because the (general) hammer-dulcimer community has a very low concentration of people who know Jewish music. So far I've turned up one lead for you: Paul Morrisset, of the Klezmatics, is a tsimbl player (it's very similar to a hammer dulcimer; I think it's an eastern-European variant) who, according to the person who referred me to him, also does solo work. The Klezmatics are very good; I haven't heard him by himself. http://www.klezmatics.com .

I'll keep digging, but wanted to pass this one on.

thanks!

last few days

Because if I wait for Zach to ask...

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Roth IRAs and investment strategies

Re: Because if I wait for Zach to ask...

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Re: Roth IRAs and investment strategies

Re: Because if I wait for Zach to ask...

Re: Because if I wait for Zach to ask...