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Author Topic: To Roth or not to Roth?  (Read 4926 times)
BrightAnarchist
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May 16, 2012, 11:47:41 PM
 #1

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )
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May 17, 2012, 12:32:27 AM
 #2

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

I personally have had zero interest in IRAs going back as far as 2000 (when I first had to start thinking about them.)  I don't remember the reason, but I suppose it had something to do with not trusting that the regulators of our financial markets were really on my side and I expected these pots of money to be far to tempting to those who had the means to dip into them.  A few years after that I started doing most of my saving in the form of physical PMs had have never looked back.

When the Bitcoin bug slammed into my windshield I took a position, but I have always considered it highly speculative.

I earnestly believe it quite likely that one of two things will happen:

1) Heavy-duty means testing.  That is, if you make it to retirement age...which is scheduled to be bumped up into one's senile years...anything you get from an IRA will be subtracted from what you get from SS.

or 2)  We'll be under an entirely different monetary system which somehow didn't seem to manage to tow IRA and SS pools along when it was implemented...maybe because they ended up being sludge pits when the covers were drawn back.

I may be wrong...I often am.


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May 17, 2012, 12:40:55 AM
 #3

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...

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May 17, 2012, 01:01:01 AM
 #4

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

https://www.bitcoin.org/bitcoin.pdf
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May 17, 2012, 01:06:07 AM
 #5

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
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May 17, 2012, 01:16:28 AM
 #6

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment.  Sure, I might never get the money back, but it sure is growing fast Wink.

https://www.bitcoin.org/bitcoin.pdf
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May 17, 2012, 01:25:22 AM
 #7

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment.  Sure, I might never get the money back, but it sure is growing fast Wink.

Ha, around the time I closed mine out it was unclear whether shorting would get you sent to Gitmo or not.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
BrightAnarchist
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May 17, 2012, 02:18:37 AM
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Meh, the vast majority of my Roth is in SPXU (3X short of S&P500) at the moment.  Sure, I might never get the money back, but it sure is growing fast Wink.

I am also short
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May 17, 2012, 02:20:20 AM
 #9

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



Your information on a Roth is wrong.  The tax savings of a Roth has nothing to do with the account value or making over 6 figures. 

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.
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May 17, 2012, 02:22:06 AM
 #10

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



Your information on a Roth is wrong.  The tax savings of a Roth has nothing to do with the account value or making over 6 figures. 

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

Bingo.

https://www.bitcoin.org/bitcoin.pdf
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BrightAnarchist
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May 17, 2012, 02:24:36 AM
 #11

Bitcoin. Gold if you need a hedge. Forget about putting government money into government companies on government terms. Peak government is here, it's a bad time to buy in.

Right, this is my sense as well: peak government. Many people much smarter than me have postulated that the end of the US as a superpower is neigh. And if we get a monetary reboot, whether through hyper-deflation or hyper-inflation ( or both in that order, at least that I what I am expecting ), then who knows what could happen.

Honestly I trust Bitcoin more than the dollar in many ways, mainly the fact that it's a real asset that is not someone else's liability ( or in someone else's control ). Also, I have been sued before, and I don't want to have to worry about my assets being taken by lawyers; I have read too many horror stories.
BrightAnarchist
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May 17, 2012, 02:28:03 AM
 #12

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

Correct on all points. That is why I love the Roth IRA, especially with the new loopholes that let you put 55K/year into it by rolling from a SEP IRA into a Traditional, and then into a Roth.

However, that said - when was the last time the government kept a promise? I have doubts that the dollar is even going to be worth much of anything 40 years from now when I start drawing on my nest egg, or that the government won't decide to "dip in" to those tastey retirement accounts when it is hungry for more tax base as the economy continues to deteriorate.

Just look at what happened to the original idea of SS with the SS "trust" fund. Didn't take long for politicians to bleed it dry and turn it into the ponzi scheme that it is today.

Making a deal with the government is like making a deal with a devil. Sure, you'll save taxes, trust us... but we can change the rules however we wish as we go along...
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May 17, 2012, 05:22:53 AM
 #13

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

Correct on all points. That is why I love the Roth IRA, especially with the new loopholes that let you put 55K/year into it by rolling from a SEP IRA into a Traditional, and then into a Roth.

However, that said - when was the last time the government kept a promise? I have doubts that the dollar is even going to be worth much of anything 40 years from now when I start drawing on my nest egg, or that the government won't decide to "dip in" to those tastey retirement accounts when it is hungry for more tax base as the economy continues to deteriorate.

Just look at what happened to the original idea of SS with the SS "trust" fund. Didn't take long for politicians to bleed it dry and turn it into the ponzi scheme that it is today.

Making a deal with the government is like making a deal with a devil. Sure, you'll save taxes, trust us... but we can change the rules however we wish as we go along...

Also some good points.

I am currently putting my money into a Roth 401(k) account that my employer offers.  I expect to claim more money at retirement than I am currently claiming.  I haven't completely analyzed when I expect that to change, perhaps somehwere in my thirties?  But then I expect to have kids to deduct & I'll likely still have a mortgage payment.

It takes a bit of time to figure out which is best and at the end of the day there are a TON of assumptions that go into it, but it's worth having the discussion and there should be someone (such as myself - a retirement actuary) who can help you out.  or a financial planner... just keep in mind, the analysis is only as good as the data and assumptions that go into it.

garbage in ... garbage out...

OH, and DON'T put all your eggs in one basket.  Leave some retirement money not in bitcoins.  We never know when all of us will get distracted by big shiney objects and stop buying bitcoins...

good luck, happy investing.

CampBX for buying BTCs, Coinbase for selling BTCs or Vircurex or Cryptsy for trading alternate cryptocurrencies like DOGEs

PM me with any questions on these sites!  Happy to help!

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May 17, 2012, 12:33:16 PM
 #14

If you're under 50 I would suggest no Roth.  I look at Argentina and actually think that could happen in the US.  When they run out of money they'll be looking to take it from somewhere.

Don't put all your eggs in one basket.  Gold is cheap now.  

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May 17, 2012, 02:46:26 PM
 #15

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



Your information on a Roth is wrong.  The tax savings of a Roth has nothing to do with the account value or making over 6 figures. 

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

With a Roth your betting that your post retirement tax bracket will be higher then the your pre retirement tax bracket.  Unless you have a big fat amount in your IRA, your post retirement tax bracket will be LOWER then your pre retirement tax bracket.  So unless your making alot of money to have a very large IRA you DO NOT want a Roth IRA. 

That theory of an advancing career is becoming more and more of a pipe dream in this economy.  Lots and lots of folks are losing their jobs and having to take lower paying ones. 

My information on Roth is entirely correct.  Lots of folks end up giving the government their taxes now at a higher rate then they would pay at retirement, because they just know they will have a perfect career and a big huge nest egg at retirement..... 

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May 17, 2012, 04:40:09 PM
 #16

Note that I don't mean Roth IRA vs Traditional IRA -- I've already decided Roth is better.

I mean Roth IRA vs Bitcoin.

What say you?

Right now I'm in both to diversify. The more time that passes, however, the more confidence I gain and the more % of my assets I move into Bitcoin. But I haven't cracked my IRA at all to buy BTC, but sometimes I wonder why I have it if the government may decide to confiscate it some day anyway ( hey, Argentina has done it, as well as many other countries that got into financial problems... )

You make over 6 figures? If you don't Roth is probably going to cost you money.  Roth will only cost you less if you will have a very large IRA at retirement.

I wouldn't even dream of putting a significant chunk of retirement monies into BTC.  If BTC goes really mainstream, a few thousand USD into it now will turn into millions later.  BTC has several risk factors that could take it to near zero...



Your information on a Roth is wrong.  The tax savings of a Roth has nothing to do with the account value or making over 6 figures. 

A Roth is highly beneficial to young professionals in the long term.  The idea behind a Roth is that early on in a young person's career, that person will be making less money and his contributions to the Roth are taxed at a low rate.  Once the person reaches the age for qualified distributions from the Roth, he will theoretically be taxed at a higher rate (having advanced in his career, making more money, putting him in a higher tax bracket).  Since the distributions in a Roth IRA are tax free, the person has saved money by the contributions be taxed at the lower tax rate of the person's younger years.

With a Roth your betting that your post retirement tax bracket will be higher then the your pre retirement tax bracket.  Unless you have a big fat amount in your IRA, your post retirement tax bracket will be LOWER then your pre retirement tax bracket.  So unless your making alot of money to have a very large IRA you DO NOT want a Roth IRA. 

That theory of an advancing career is becoming more and more of a pipe dream in this economy.  Lots and lots of folks are losing their jobs and having to take lower paying ones. 

My information on Roth is entirely correct.  Lots of folks end up giving the government their taxes now at a higher rate then they would pay at retirement, because they just know they will have a perfect career and a big huge nest egg at retirement..... 



There is likely a crossover point where your point is valid, but while I'm young and paying 0 taxes, I'm going to put my retirement funds in a Roth.  If I ever start paying taxes above the minimum rate, I may look into other options.

Saying it's only good if you are making a lot of money is false.

https://www.bitcoin.org/bitcoin.pdf
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May 17, 2012, 04:51:53 PM
 #17

lol ok.  If your paying zero taxes, roth is the way to go..

I assumed you were at least making enuf to be paying taxes, lol.

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May 17, 2012, 04:59:39 PM
 #18

I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...

https://www.bitcoin.org/bitcoin.pdf
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May 17, 2012, 05:09:06 PM
 #19

I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...

When did I quote your reply?  or address it in any way?  Till post #17

Sorry I didn't address your special case making so little you don't pay any taxes at all, usually if your so poor you have near zero income you don't put money in an IRA, you buy FOOD.
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May 17, 2012, 05:23:24 PM
 #20

I make 5 figures in a good year.  How is it cheaper to pay taxes later on an IRA when I can pay 0 taxes and put my extra income in a Roth?

Quoting myself since you couldn't bother to read it last time...

When did I quote your reply?  or address it in any way?  Till post #17

Sorry I didn't address your special case making so little you don't pay any taxes at all, usually if your so poor you have near zero income you don't put money in an IRA, you buy FOOD.

I grow a lot of my food.  I'm not hungry.  I make plenty on an hourly basis, but I spend more time with friends and family than most people.  I also prefer to not support the fuckers that use other people's money to kill poor people in other countries so they can steal their resources.  I don't have a lot of extra money, but I'm by no means poor.  My low income is a conscious choice.  I have no desire to compete with others to see who can accumulate the most material goods.

As for my "special case", it would also apply to those who are in the lowest tax bracket, which is a lot of people.  Like I said, there is crossover point, but many young people aren't even close to it.  Hell, less than 30% of people in my age range are able to find work in the area they are trained.  Many are working fast food or retail because that's all that's available.

But, you keep fueling this fire-cult called America.  Eventually, all you'll have left is ashes.

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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