Author Topic: New Roth IRA limitations proposed today  (Read 19182 times)

Paul der Krake

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Re: New Roth IRA limitations proposed today
« Reply #100 on: September 25, 2021, 03:53:25 PM »
Just get rid of 401ks and income limits and let everyone put $X (hopefullly at least $40-$50k) in an IRA.

None of this should be based on employment luck.

Completely agree with this. But the premise that this bill kills mustachians is wrong. It lowers the price of the ACA and gets rid of the cliff it also gives more targeted money to parents and people.looking to buy EVs. Losing mbdr for the ACA alone is worth it 10 fold for people who plan to retire early.
Yesssssss.

There are already a dozen options, but oh no, my name is John McJohnnnyJohnson from the great state of Statefulstate, and after lengthy consultation with my constituents, I am introducing this bill that will add option #13, but this one is simpler and better than all the others, promise.

Every. Goddamn. Year.

NaN

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Re: New Roth IRA limitations proposed today
« Reply #101 on: September 29, 2021, 06:07:42 PM »
The people who feel entitled to a particular tax advantaged "Beautiful mind" like retirement process I think are completely missing the point, in my opinion, of being retired. A+ for effort and doing your homework and following through with setting it all up - kudos and no judgement on taking advantage of a legal process. If one tax change screws over your FIRE plan, causing you to fret out it like you are seeing Jason with a pair of mustache trimmers then, to me, that sounds like a whole bunch of stress filled paranoia living that you really should leave right next to your Swingline stapler on your way out.

ender

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Re: New Roth IRA limitations proposed today
« Reply #102 on: September 29, 2021, 06:09:09 PM »
The people who feel entitled to a particular tax advantaged "Beautiful mind" like retirement process I think are completely missing the point, in my opinion, of being retired. A+ for effort and doing your homework and following through with setting it all up - kudos and no judgement on taking advantage of a legal process. If one tax change screws over your FIRE plan, causing you to fret out it like you are seeing Jason with a pair of mustache trimmers then, to me, that sounds like a whole bunch of stress filled paranoia living that you really should leave right next to their Swingline stapler on your way out.


.... huh?


NaN

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Re: New Roth IRA limitations proposed today
« Reply #103 on: September 29, 2021, 06:30:54 PM »

.... huh?



Tax changes are a fact of life. There is a lot of complaining about this proposed law change and my point is put yourself in a position where you are resilient to tax changes.
« Last Edit: September 29, 2021, 06:33:49 PM by NaN »

ender

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Re: New Roth IRA limitations proposed today
« Reply #104 on: September 29, 2021, 07:04:41 PM »
I guess my "huh?" is more that you seem to be reacting far more strongly to a non-existent reaction than anyone has voiced in this thread.


JJ-

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Re: New Roth IRA limitations proposed today
« Reply #105 on: September 29, 2021, 07:12:13 PM »
Sounds like somebody has a case of the Mondays.

NaN

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Re: New Roth IRA limitations proposed today
« Reply #106 on: September 29, 2021, 07:52:50 PM »
I don't think it was that strong, but my writing style could have been interpreted that way. astvilla's post does deserve that kind of reaction. "Eliminating the mega Roth kills my plans". It seems you replied to it as well.

Sounds like somebody has a case of the Mondays.

Maybe they should make the limit for MBR a penny? No one will notice.

ysette9

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Re: New Roth IRA limitations proposed today
« Reply #107 on: September 30, 2021, 08:10:51 AM »
Personally I love the MBR and will be sad when it goes away. On the other hand I see how unfair it is that only some have access to it. I also recognize that part of living in a society with things we like is paying for said things. I’d rather have nice things than not (bridges that don’t collapse, drinking water that doesn’t poison, and so forth), and if we are going to have them then someone has to pay for them. It seems this is an attempt to have those with more means pay for the things we have all decided we want.

What are the alternatives? Either we do without, and the US is already rather stingy compared to industrialized nations, or we make someone with less money pay. Either of those options seem worse to me.

DadJokes

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Re: New Roth IRA limitations proposed today
« Reply #108 on: September 30, 2021, 04:42:41 PM »
This is a horrible piece of tax legislation for most Mustachians. In fact, this whole bill just seems to be a sleuth of a lot of unsavory legislation that will be forced through and accepted by most cause everyone is sort of getting something they want.

Eliminating the mega Roth kills my plans. I just started and now they kill it. There are many better ways to do this but most people using mega Roth are average folks like us who want to save more for retirement as Social Security won't be there for many of us. If anything, this is more a tax on average poorer people and not the Peter Thiels of the world. And I'm sure the Peter Thiels out there will still find a loophole but the average Joe like us will be left losing paying more taxes while only adding $4 billion in tax revenue. And they decide it's better to give $1 billion to a rich country like Israel. Jeez I'm thinking of switching my votes next election cycle.

Too bad there isn't some lobby or anyone who wants to represent for aggressive savers out there in Congress. Looks like our silence means higher taxes on us average folk.

First of all, if your FIRE plan depended on a tax loophole, it was a shitty plan.

Second, average folks? You have to make $140k single or $208k married before it even comes into the equation, which puts you in the top 10% of earners in the country.

trc4897

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Re: New Roth IRA limitations proposed today
« Reply #109 on: October 01, 2021, 06:33:08 AM »
This is a horrible piece of tax legislation for most Mustachians. In fact, this whole bill just seems to be a sleuth of a lot of unsavory legislation that will be forced through and accepted by most cause everyone is sort of getting something they want.

Eliminating the mega Roth kills my plans. I just started and now they kill it. There are many better ways to do this but most people using mega Roth are average folks like us who want to save more for retirement as Social Security won't be there for many of us. If anything, this is more a tax on average poorer people and not the Peter Thiels of the world. And I'm sure the Peter Thiels out there will still find a loophole but the average Joe like us will be left losing paying more taxes while only adding $4 billion in tax revenue. And they decide it's better to give $1 billion to a rich country like Israel. Jeez I'm thinking of switching my votes next election cycle.

Too bad there isn't some lobby or anyone who wants to represent for aggressive savers out there in Congress. Looks like our silence means higher taxes on us average folk.

First of all, if your FIRE plan depended on a tax loophole, it was a shitty plan.

Second, average folks? You have to make $140k single or $208k married before it even comes into the equation, which puts you in the top 10% of earners in the country.

Did they switch from just straight eliminating the mega backdoor roth to adding income limits? I was hoping they would do that. We put about 31k in my wife's mega backdoor roth each year while falling well below the income limits you list above

Edit: or were you talking about "regular" backdoor roth?

ender

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Re: New Roth IRA limitations proposed today
« Reply #110 on: October 01, 2021, 08:51:13 AM »
Backdoor Roth had proposed income limits (due to income cap on Roth conversions).

Mega backdoor would go away entirely under these changes.

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #111 on: October 01, 2021, 09:23:58 AM »
Backdoor Roth had proposed income limits (due to income cap on Roth conversions).

Mega backdoor would go away entirely under these changes.

I'd argue this might be good for mustachians long term. In reference to the how rich people avoid taxes thread. Building a reasonably sized taxable account with about 5 years living expenses and borrowing margin or an loc against it should allow a mustachians to never sell equities. Worst case you have to move some Roth contributions to taxable to cover some calls if you hit some bad sorry in the beginning.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #112 on: October 01, 2021, 09:55:05 AM »
Found this linked from a CNBC news article:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/SubtitleISxS.pdf
Quote
[Sec. 138302]
If an individual’s combined traditional IRA, Roth IRA and defined contribution retirement account balances generally exceed $10 million at the end of a taxable year, a minimum distribution would be required for the following year. This minimum distribution is only required if the taxpayer’s taxable income is above the thresholds described in the section above (e.g., $450,000 for a joint return). The minimum distribution generally is 50 percent of the amount by which the individual’s prior year aggregate traditional IRA, Roth IRA and defined contribution account balance exceeds the $10 million limit
...
This provision is effective tax years beginning after December 31, 2021.

Seems like the proposed legislation does avoid taxpayers earning under $400k, as I see that clause in other areas.  Someone with $1 billion in the IRAs doesn't have to take any action if their income is $390k.

It doesn't seem to be retroactive (if passed), as the earliest parts start in 2022 (but I could have missed some).

seattlecyclone

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Re: New Roth IRA limitations proposed today
« Reply #113 on: October 01, 2021, 12:47:48 PM »
Worst case you have to move some Roth contributions to taxable to cover some calls if you hit some bad sorry in the beginning.

I'd think that the worst case is you rack up a couple decades worth of living expenses in margin loans, something happens in the year 2040 to cause interest rates to rise to the point where you don't feel that holding that much debt at that rate is a good idea anymore, and you need to realize a million dollars of capital gains in a short period of time in order to extinguish the debt. That gets expensive.

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #114 on: October 01, 2021, 02:14:17 PM »
Worst case you have to move some Roth contributions to taxable to cover some calls if you hit some bad sorry in the beginning.

I'd think that the worst case is you rack up a couple decades worth of living expenses in margin loans, something happens in the year 2040 to cause interest rates to rise to the point where you don't feel that holding that much debt at that rate is a good idea anymore, and you need to realize a million dollars of capital gains in a short period of time in order to extinguish the debt. That gets expensive.

If rates appreciate to that the returns on keeping money invested will far outweigh the cost of those taxes. And at that point I will have converted over 2 million from trad to roth that can be tapped to pay off the debt if needed.

getmoneyeatpizza

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Re: New Roth IRA limitations proposed today
« Reply #115 on: October 09, 2021, 10:57:44 AM »
If you have kids <18 the average mustachian WILL be better off with this bill. If not you're income is so high you can FIRE soon anyway and reap the benefits of the means tested CTC later.

Putting your money in a taxable vs an MBR is just not that big of a deal.

secondcor521

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Re: New Roth IRA limitations proposed today
« Reply #116 on: October 09, 2021, 11:29:08 AM »
If you have kids <18 the average mustachian WILL be better off with this bill. If not you're income is so high you can FIRE soon anyway and reap the benefits of the means tested CTC later.

As a modest income parent of 3 offspring all >18, I'm on the other end of this particular bill.  Mostly I'm reading the "pay fors" section rather than the "goodies" section.  Oh well.  #mustachianpeopleproblems.

Putting your money in a taxable vs an MBR is just not that big of a deal.

With my passive index LTBH approach, agreed.  For active or yield investors with a long time frame, maybe not so much.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #117 on: October 11, 2021, 05:04:19 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.
They WILL according to who?  Politicians?  Data?

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #118 on: October 11, 2021, 05:45:26 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.
They WILL according to who?  Politicians?  Data?

the avg mustachian would get an increase of 1k -1600 per child under this bill and have their child care costs cut by 50% up to the first 16k in spending on childcare vs 5k at their marginal rate or 20% before.  They also would receive increased ACA benefits.  they lose MBDR - which the avg mustachian probably doesnt have access to and may not even have the income to fund and maybe BDR

Poll in 2017

https://forum.mrmoneymustache.com/welcome-to-the-forum/what's-your-income-level-and-savings-rate/

i'd say the avg mustachian likely benefits from this based on the numbers here

getmoneyeatpizza

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Re: New Roth IRA limitations proposed today
« Reply #119 on: October 12, 2021, 06:57:54 PM »
Yup @boarder42 articulated it well.

and I'd go even further and say it helps the average working mustachian and those who have already FIREd due to ACA fixes.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #120 on: October 13, 2021, 08:25:30 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #121 on: October 13, 2021, 08:29:44 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

https://www.cnn.com/2021/09/25/politics/house-budget-committee-biden-economic-agenda/index.html

its a bill you understand a bill is proposed legislation right and thats all that was stated so it can be said with certainty this will benefit the avg mustachian with sub 18yo kids- changes to this BILL have not been implemented and this is the only BILL on the table today being discussed around 3.5T

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #122 on: October 13, 2021, 08:41:33 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

At the end of the day moderate democrats will make this a worse bill just like they did to the ACA. It won't be good enough for Americans to actually be proud of it, but it will satiate their anger towards the Democrats inability to actually do something.

The GOP will then pretend like they actually pass laws in 2022 or won't cut your benefits, will win the house, and then nothing else (except tax cuts and military spending) will happen again until the next Democrat trifecta in 2030.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #123 on: October 13, 2021, 09:09:34 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

https://www.cnn.com/2021/09/25/politics/house-budget-committee-biden-economic-agenda/index.html

its a bill you understand a bill is proposed legislation right and thats all that was stated so it can be said with certainty this will benefit the avg mustachian with sub 18yo kids- changes to this BILL have not been implemented and this is the only BILL on the table today being discussed around 3.5T
Your link is from 3 weeks ago - a bit out of date for pending legislation.  It's a bit hard to follow all that text without a period.  But nobody is discussing 3.5T in Congress, because it can't pass.

Pelosi said she was bringing the bill to a vote weeks ago - then didn't.  She knew the votes weren't there.  Manchin is quoted in the article I mentioned (from today) as having a 1.5T target, and will vote down a 3.5T bill.  So that's dead.  Rumors are that negotiations are just over 2.0T right now.  Until the last 2 Democrats are in favor, those discussions will continue.

I wonder if half the spending is dropped, will half the tax cuts be dropped?

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #124 on: October 13, 2021, 09:19:38 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

https://www.cnn.com/2021/09/25/politics/house-budget-committee-biden-economic-agenda/index.html

its a bill you understand a bill is proposed legislation right and thats all that was stated so it can be said with certainty this will benefit the avg mustachian with sub 18yo kids- changes to this BILL have not been implemented and this is the only BILL on the table today being discussed around 3.5T
Your link is from 3 weeks ago - a bit out of date for pending legislation.  It's a bit hard to follow all that text without a period.  But nobody is discussing 3.5T in Congress, because it can't pass.

Pelosi said she was bringing the bill to a vote weeks ago - then didn't.  She knew the votes weren't there.  Manchin is quoted in the article I mentioned (from today) as having a 1.5T target, and will vote down a 3.5T bill.  So that's dead.  Rumors are that negotiations are just over 2.0T right now.  Until the last 2 Democrats are in favor, those discussions will continue.

I wonder if half the spending is dropped, will half the tax cuts be dropped?

It doesnt change the statement made which is what you were disputing - There is only one BILL on the table thats made it out of commitee and thats what the original poster was referencing.  I agree that this bill as written will be very unlikley to pass manchin but it doesnt change the statement.

This entire thread is based on the premise of what was written in that bill we should probably just quit discussing everything about the bill on these forums as its completey going to change and until the dems agree on something its worthless brain energy.

put some periods there for you.

35andFI

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Re: New Roth IRA limitations proposed today
« Reply #125 on: October 13, 2021, 12:27:09 PM »
I would love to see the percentage of people making $63,000 who even have access to a MBR, much less actually take advantage of it.

Not sure about percentages, but I make $70k ($62.5k last year) and take advantage of the MBDR.

I am not wealthy, yet this affects me directly.

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #126 on: October 13, 2021, 01:06:50 PM »
I would love to see the percentage of people making $63,000 who even have access to a MBR, much less actually take advantage of it.

Not sure about percentages, but I make $70k ($62.5k last year) and take advantage of the MBDR.

I am not wealthy, yet this affects me directly.

How much are you actually putting in though?

If you already have a Roth IRA and Roth 401k, you already have the ability to put away $26k in roth accounts. (Or close to 33k if you're over 50). So you're stuffing what? another $5k with MBDR?

Closing off the rare 70k worker from additional 5k of tax shelters compared to the mega wealthy who are regularly putting in 10x that amount every year is well worth it to society.

Personally, I think it would just be easier to put a hard ceiling on retirement accounts ($5MM per person $10MM per couple) and that would basically solve all of these loopholes without having to change all the rules around.

secondcor521

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Re: New Roth IRA limitations proposed today
« Reply #127 on: October 13, 2021, 03:07:44 PM »
Closing off the rare 70k worker from additional 5k of tax shelters compared to the mega wealthy who are regularly putting in 10x that amount every year is well worth it to society.

I don't understand how the mega wealthy could take more advantage of the MBDR - I thought there was a hard limit of $58K per person per year regardless of income.  Maybe I'm missing something.

Personally, I think it would just be easier to put a hard ceiling on retirement accounts ($5MM per person $10MM per couple) and that would basically solve all of these loopholes without having to change all the rules around.

You might be happy to know that this is effectively one of the additional "pay fors" in the only extant version of the $3.5T bill.  I don't recall the details, but people with large retirement accounts around the numbers you mentioned are required to make additional distributions (50% of the excess IIRC).  I believe they are also limited in what they can contribute or convert.

Gronnie

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Re: New Roth IRA limitations proposed today
« Reply #128 on: October 13, 2021, 03:08:30 PM »
I would be all for "you can contribute X dollars lilfetime" and being able to do it anytime I am able.

If it's "your account can only have X dollars before it's taxed" that one doesn't make a lot of sense. What if I'm at X+Y dollars at some point, don't make any withdrawals, and then by the time I am ready to withdraw the money it has crashed and is worth X-Z dollars? Did I already have to pay a tax? It just doesn't make a ton of sense.

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #129 on: October 13, 2021, 03:59:44 PM »
I would be all for "you can contribute X dollars lilfetime" and being able to do it anytime I am able.

If it's "your account can only have X dollars before it's taxed" that one doesn't make a lot of sense. What if I'm at X+Y dollars at some point, don't make any withdrawals, and then by the time I am ready to withdraw the money it has crashed and is worth X-Z dollars? Did I already have to pay a tax? It just doesn't make a ton of sense.

The proposal we're discussing is that anyone making over 400k/ year and has over something like 10MM in accounts must withdraw 50% of the overage. (actual numbers might be off, but you get the gist).

If they somehow, withdraw the money down to the limit. Then in the following years when their account sinks below that limit, then can contribute again without having a forced withdraw.

Nothing complicated. And also nothing anyone in this thread would ever actually be in danger of hitting.

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #130 on: October 13, 2021, 04:16:02 PM »
Closing off the rare 70k worker from additional 5k of tax shelters compared to the mega wealthy who are regularly putting in 10x that amount every year is well worth it to society.

I don't understand how the mega wealthy could take more advantage of the MBDR - I thought there was a hard limit of $58K per person per year regardless of income.  Maybe I'm missing something.

That's just on your 401k. There's still the $6k allowance on IRA's. So the individual limit is closer to $65k.

Extremely wealthy individuals might also include their wife on the pay roll and "overpay" them for their contributions (like being a "board member" or "consultant"), and wrap up another $65k. So a couple could reasonably put $130k every year in a Roth, if they can line it up right.

That's why I think it's silly to be complaining about an extra $5k in your Roth. The rich paying more in taxes, funding our society, creating a better safety net, and increasing the benefits we receive from the government far out pace the marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth? Whereas a number of wealthy people have used this loophole to avoid literally millions of dollars in taxes.

There's also the value of potentially lowering the medicare age 5-10 years, or having dental added, keeping the child tax credit, shoring up social security to maintain current benefit levels, not dying when the bridge you're driving over collapses. All of which far exceed the tax savings of a couple extra grand in a Roth.

secondcor521

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Re: New Roth IRA limitations proposed today
« Reply #131 on: October 13, 2021, 04:47:58 PM »
@FIPurpose, I think I misunderstood your 10x number to refer to 10x the MBDR limit, not 10x the $5K additional amount of the other poster.

35andFI

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Re: New Roth IRA limitations proposed today
« Reply #132 on: October 13, 2021, 07:06:30 PM »
I would love to see the percentage of people making $63,000 who even have access to a MBR, much less actually take advantage of it.

Not sure about percentages, but I make $70k ($62.5k last year) and take advantage of the MBDR.

I am not wealthy, yet this affects me directly.

How much are you actually putting in though?

If you already have a Roth IRA and Roth 401k, you already have the ability to put away $26k in roth accounts. (Or close to 33k if you're over 50). So you're stuffing what? another $5k with MBDR?

Closing off the rare 70k worker from additional 5k of tax shelters compared to the mega wealthy who are regularly putting in 10x that amount every year is well worth it to society.

How much I am contributing is besides the point. The point is that I am making less than the median household income, yet am able to (and do) take advantage of this.

To answer your question though, I contributed:
$7,764 in 2019 when I was making $59,902 and $7,952 in 2021 when I am making $70k.

That being said, I am also making contributions to a taxable account so actually could afford to contribute more like $12k/yr via the MBDR if I wanted to.
« Last Edit: October 13, 2021, 07:08:16 PM by 35andFI »

35andFI

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Re: New Roth IRA limitations proposed today
« Reply #133 on: October 14, 2021, 06:41:48 AM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

habanero

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Re: New Roth IRA limitations proposed today
« Reply #134 on: October 14, 2021, 07:10:23 AM »
As I don''t live in the US the tax issues discussed are of limited relevance to me, but during my time at this forum I'm a bit surprised that there (at least to my eyes) seems to be rather little discussion about long-term risks from substantial changes in the tax code over time, what I have seen mostly relates to the ACA. Over decadeds a lot of things that seem very "un-american" can happen with potentially large consequences. As a - at least to US eyes - fairly radical example we have tax on wealth, which effectitvely makes the 4% rule into the 3% rule as the deductible is very low And the actual tax rate and the weighting of how bonds vs real estate vs equities vs cash can change from governent to goverment (and it does) making the waters a bit rougher to navigate. On the other hand we have much lower property taxes and don't need to budget for massive health care costs so cherrypicking one single item is also not very constructive when comparing tax regimes across nations (or states).

Granted, changes in the tax code and other areas affecting long-time financial planning can swing the other way as well during the same time frame and lots of other good and bad things can and some will happen over the next decades, but if I lived in the US I would view changes in tax code as one of the main risks I was exposed to.

The definition of "rich" is also in flux, we have tax on wealth after the first ~200k USD of (taxable) net worth, but debt is deducted and primary residence is given very favouralbe tax treatment compared to other asset classes. I wouldn't consider a net worh of 200k USD anywhere near rich but our government does, apparantly. Around 13% of the population over 18 years pay wealth tax, but for the majority the sums in question are pretty small.

Some years ago the system for property tax was revamped here and primary residence was, for wealth tax purposes, weighted at 25% of assessed market value. As one academic commented "there are a lot of numbers between 25% and 100%.

boarder42

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Re: New Roth IRA limitations proposed today
« Reply #135 on: October 14, 2021, 07:23:50 AM »
As I don''t live in the US the tax issues discussed are of limited relevance to me, but during my time at this forum I'm a bit surprised that there (at least to my eyes) seems to be rather little discussion about long-term risks from substantial changes in the tax code over time, what I have seen mostly relates to the ACA. Over decadeds a lot of things that seem very "un-american" can happen with potentially large consequences. As a - at least to US eyes - fairly radical example we have tax on wealth, which effectitvely makes the 4% rule into the 3% rule as the deductible is very low And the actual tax rate and the weighting of how bonds vs real estate vs equities vs cash can change from governent to goverment (and it does) making the waters a bit rougher to navigate. On the other hand we have much lower property taxes and don't need to budget for massive health care costs so cherrypicking one single item is also not very constructive when comparing tax regimes across nations (or states).

Granted, changes in the tax code and other areas affecting long-time financial planning can swing the other way as well during the same time frame and lots of other good and bad things can and some will happen over the next decades, but if I lived in the US I would view changes in tax code as one of the main risks I was exposed to.

The definition of "rich" is also in flux, we have tax on wealth after the first ~200k USD of (taxable) net worth, but debt is deducted and primary residence is given very favouralbe tax treatment compared to other asset classes. I wouldn't consider a net worh of 200k USD anywhere near rich but our government does, apparantly. Around 13% of the population over 18 years pay wealth tax, but for the majority the sums in question are pretty small.

Some years ago the system for property tax was revamped here and primary residence was, for wealth tax purposes, weighted at 25% of assessed market value. As one academic commented "there are a lot of numbers between 25% and 100%.

currently the numbers for weatlh and income testing are very high in this country 450k income and 10MM in wealth before these taxes kick in - at least in the proposed plan.  i would say the risk to a mustachian in the tax space is low as it seems while we're moving more liberal it will be a slow and arduous process.  maybe this affects my kids but I can't see taxes getting into the middle class anytime soon to support these

habanero

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Re: New Roth IRA limitations proposed today
« Reply #136 on: October 14, 2021, 07:33:40 AM »
it will be a slow and arduous process.  maybe this affects my kids but I can't see taxes getting into the middle class anytime soon to support these

yeah, fair point. These things tend to move slowly generally whie trending in one or another direction.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #137 on: October 14, 2021, 08:00:16 AM »
If you have kids <18 the average mustachian WILL be better off with this bill.

"WILL" describes certainty, not proposed legislation that cannot pass without changes.  Especially since Manchin is attacking that specific part of the bill, while also demanding half the spending be dropped.

https://www.npr.org/2021/10/13/1044543025/united-against-higher-spending-centrist-democrats-dont-agree-on-what-to-cut-or-k
Quote
"My number has been 1.5. I've been very clear — you all have got the outline on how I got there," Manchin said last week.
...
For example, Manchin wants to change one policy Democrats see as a cornerstone of their proposal — the child tax credit ... But Manchin has insisted that these benefits should be "means tested" going forward ..."

https://www.cnn.com/2021/09/25/politics/house-budget-committee-biden-economic-agenda/index.html

its a bill you understand a bill is proposed legislation right and thats all that was stated so it can be said with certainty this will benefit the avg mustachian with sub 18yo kids- changes to this BILL have not been implemented and this is the only BILL on the table today being discussed around 3.5T
Your link is from 3 weeks ago - a bit out of date for pending legislation.  It's a bit hard to follow all that text without a period.  But nobody is discussing 3.5T in Congress, because it can't pass.

Pelosi said she was bringing the bill to a vote weeks ago - then didn't.  She knew the votes weren't there.  Manchin is quoted in the article I mentioned (from today) as having a 1.5T target, and will vote down a 3.5T bill.  So that's dead.  Rumors are that negotiations are just over 2.0T right now.  Until the last 2 Democrats are in favor, those discussions will continue.

I wonder if half the spending is dropped, will half the tax cuts be dropped?

It doesnt change the statement made which is what you were disputing - There is only one BILL on the table thats made it out of commitee and thats what the original poster was referencing.  I agree that this bill as written will be very unlikley to pass manchin but it doesnt change the statement.

This entire thread is based on the premise of what was written in that bill we should probably just quit discussing everything about the bill on these forums as its completey going to change and until the dems agree on something its worthless brain energy.

put some periods there for you.
Look at the original post I quoted - you didn't even write it.  To that other poster, I disputed that child tax credits are a certainty, that they "WILL" happen if the bill passes.

Why did you say "quit discussing everything" and then continue posting?

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #138 on: October 14, 2021, 08:21:13 AM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.

Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes

So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.

But let me answer your other question/point:

The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)

Consider the value of a single year's contribution. (we can do both scenarios)

$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k

So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k

You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.

So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200

And that's how much you're saving 30 years from now, not today.

I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.

trc4897

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Re: New Roth IRA limitations proposed today
« Reply #139 on: October 14, 2021, 11:38:19 AM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.

Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes

So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.

But let me answer your other question/point:

The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)

Consider the value of a single year's contribution. (we can do both scenarios)

$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k

So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k

You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.

So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200

And that's how much you're saving 30 years from now, not today.

I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.

Good point. Didn't think about it like this before.

My wife and I make around 170k combined and she has access to a MBDR. The last 2 years we have put in 31k each year. If this passes, next year we will move this 31k to a traditional brokerage account.

In retirement, we plan to live on around 60k/yr. So we would essentially not pay taxes on our capital gains or any dividends. The only way I can think that this will hurt us (not that I am complaining) is that we will have to pay taxes on the dividends before retirement while our income is 170k. I'm projecting around 500k in a brokerage account by the time we retire, so that year before retirement we would pay $1500 extra in taxes (2% dividend yield = $10k * .15 = $1500). Still not bad at all!

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #140 on: October 14, 2021, 12:06:01 PM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.

Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes

So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.

But let me answer your other question/point:

The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)

Consider the value of a single year's contribution. (we can do both scenarios)

$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k

So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k

You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.

So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200

And that's how much you're saving 30 years from now, not today.

I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.

Good point. Didn't think about it like this before.

My wife and I make around 170k combined and she has access to a MBDR. The last 2 years we have put in 31k each year. If this passes, next year we will move this 31k to a traditional brokerage account.

In retirement, we plan to live on around 60k/yr. So we would essentially not pay taxes on our capital gains or any dividends. The only way I can think that this will hurt us (not that I am complaining) is that we will have to pay taxes on the dividends before retirement while our income is 170k. I'm projecting around 500k in a brokerage account by the time we retire, so that year before retirement we would pay $1500 extra in taxes (2% dividend yield = $10k * .15 = $1500). Still not bad at all!

Yeah this is a good point. You could compare the 2 and say that the tax you pay on the 2% dividend (if you're in the 15% category, though the 70k example would likely not be and could be collecting qualified dividends at a 0% tax rate without the barrier of a Roth account)

That would equate to a .3% drag on investment returns. So basically, if you're in the 100-450k / year range, you could say that you're losing out on that compounding interest of .3% if comparing to a roth account (which isn't nothing for sure!) There's also the whole topic on what parts of your portfolio to put where for maximum advantage.

For the $5k example for 30 years that comes out to 2-4k of lost compounding. But again, you could really only claim these savings if you're earning six figures. Just more evidence that the richer you get, the exponentially larger these savings become.

seattlecyclone

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Re: New Roth IRA limitations proposed today
« Reply #141 on: October 14, 2021, 12:12:38 PM »
Right, loss of the mega backdoor would have the following impacts for moderate-income Mustachians as far as I can tell:
* Need to pay tax on any dividends or capital gains realized from those investments, which could include taxes paid at a relatively high rate while still working.
* Need to count income from those investments toward MAGI which could have an effect on post-retirement costs such as ACA health insurance premiums.
* Any amounts not spent during your lifetime will pass on to your heirs in taxable form (with stepped-up basis as of now) instead of being eligible for a further ten years of sheltering in an inherited Roth account.

Those costs definitely aren't nothing, but they also aren't likely to be humungous for most of us. Realizing that this was always a blatant loophole, we shouldn't be surprised or dismayed that they would close it eventually. It makes no sense at all to have a $19.5k Roth 401(k) limit, except for those who work for companies that have made the magic incantations in their plan documentation to allow a further $25k-ish.

ender

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Re: New Roth IRA limitations proposed today
« Reply #142 on: October 14, 2021, 07:17:31 PM »
Another possibility is wealth taxes excluding retirement accounts.

35andFI

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Re: New Roth IRA limitations proposed today
« Reply #143 on: October 14, 2021, 08:25:28 PM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.

Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes

So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.

But let me answer your other question/point:

The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)

Consider the value of a single year's contribution. (we can do both scenarios)

$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k

So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k

You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.

So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200

And that's how much you're saving 30 years from now, not today.

I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.

I don't mean to get bogged down in my specific numbers but in an effort to be transparent... my W2 is $70k, I make a few thousand elsewhere, max out tIRA, t401k, and HSA (which brings my current tax liability down), and my spending is ~$18k/yr.

So far in 2021, I have contributed $6,900 to my taxable account, $7,952.51 via MBDR, and could contribute another $4,087.23 via MBDR if I continued but want to make a clean cut in case MBDR goes away on 1/1 so that will likely go to my taxable account.

Assuming a 7% return (to adjust for inflation) on a $12k contribution, that's a value of $91k in 2021 dollars after 30 years.
So using your $100k number, that's a savings of $2,740 per year (in 2021 dollars) not accounting for dividends.

I'm not making any statements for or against closing the loophole, all that I am saying is that for someone in the middle class, such as myself, to save thousands of dollars a year in taxes is pretty big and that getting rid of the MBDR will cost me (and whomever else is doing something similar) thousands of dollars per year. Therefore, this does not just affect the wealthy.

FIPurpose

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Re: New Roth IRA limitations proposed today
« Reply #144 on: October 14, 2021, 08:38:40 PM »
That's why I think it's silly to be complaining about an extra $5k in your Roth.
...
marginal benefit of being able to stick an extra $5k a year in a Roth. This person is at most saving $1-5k in taxes 30-50 years from now by having that money in a Roth
...
All of which far exceed the tax savings of a couple extra grand in a Roth.

Not complaining, just stating the fact that it's not only the rich who will be affected by this.

Also, having the ability to contribute an extra $12k/yr (even 5k if that was the number) to a Roth account is not at all marginal, at least not to me (the one that this is benefiting).
That's $1.13M (inflation adjusted) of tax free money after 30 years (or $472k at $5k/yr).

Not sure how you came to a total tax savings of $1-5k but I digress.

I'm not really following your numbers here. You said in a previous post that you make 70k. But that you also use 8k worth of MBDR.

Even just thinking this through then:
5k - FICA Taxes
6k - IRA
19.5k - 401k
8k - MBDR
12k - Brokerage
5-8k? - Other Taxes

So then you're saying you're living on less than 15k? I'm not saying that's impossible, but that's a pretty low level of spending even for MMM.

But let me answer your other question/point:

The money you put into a Roth is not the benefit you get out of it. The benefit is that your returns are tax free. So you're saving the value of CG taxes. For most of us here that means somewhere between 0-15%, though closer to 0% in retirement since you have to exceed $80k(married) of income. (So already, people who earn more than $450k of CG's per year are getting more value out of a Roth)

Consider the value of a single year's contribution. (we can do both scenarios)

$5k in 30 years will be worth $30-50k
$12k in 30 years will be worth $70-120k

So you are saving CG taxes on:
($5k) 25-45k
($12k) 58-108k

You're in retirement and want to withdraw $100k. That means the effective tax rate on what you withdrew if it had only been in a brokerage account is 3%.

So then the effective value of the taxes you're saving each year:
($5k) $750 - 1,300
($12k) $1,740 - 3,200

And that's how much you're saving 30 years from now, not today.

I'm not saying that it's nothing, but it's not that fantastic of a savings vehicle for most Mustachians. For the ultra rich, they're are getting 5-10x the tax savings you are simply by where you are on the tax schedule. The benefits of the bill far outweigh the value of losing MBDR.

I don't mean to get bogged down in my specific numbers but in an effort to be transparent... my W2 is $70k, I make a few thousand elsewhere, max out tIRA, t401k, and HSA (which brings my current tax liability down), and my spending is ~$18k/yr.

So far in 2021, I have contributed $6,900 to my taxable account, $7,952.51 via MBDR, and could contribute another $4,087.23 via MBDR if I continued but want to make a clean cut in case MBDR goes away on 1/1 so that will likely go to my taxable account.

Assuming a 7% return (to adjust for inflation) on a $12k contribution, that's a value of $91k in 2021 dollars after 30 years.
So using your $100k number, that's a savings of $2,740 per year (in 2021 dollars) not accounting for dividends.

I'm not making any statements for or against closing the loophole, all that I am saying is that for someone in the middle class, such as myself, to save thousands of dollars a year in taxes is pretty big and that getting rid of the MBDR will cost me (and whomever else is doing something similar) thousands of dollars per year. Therefore, this does not just affect the wealthy.

I actually got that a little wrong.

If you withdrew 100k in one year in retirement, you'd have saved about $0 in taxes. (15% bracket starts at 80k married, but I didn't include that you'd also have the 24k standard deduction) Especially now that you said that you use tIRA and t401k to lower you income. You'd be solidly in the 0% tax bracket on qualified dividends and even while working your capital gains are still 0%.

So actually, it's really sounding like you're not really saving anything by having a Roth. Perhaps some tax filing simplification, but you're also locking the money behind a Roth which comes with its own rule set.

You might get some advantage if your income increases by a lot in a few years, then you'll be protected against the 15% bracket. Or against potential CG/QD tax bracket changes that might increase your tax burden. But as it is today, you're not gaining anything.

VaCPA

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Gronnie

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Re: New Roth IRA limitations proposed today
« Reply #146 on: November 23, 2021, 09:51:35 AM »

VaCPA

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Re: New Roth IRA limitations proposed today
« Reply #147 on: November 23, 2021, 09:53:51 AM »
https://www.cnbc.com/2021/11/01/tax-strategy-of-the-rich-backdoor-roth-survives-in-latest-democrat-plan.html

Backdoor Roth might survive?

This article is from 11/1.

It was put back in a few days after that.

Was it? Haha. I saw the article was a couple weeks old but didn't think anything changed since then. Oh well

secondcor521

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Re: New Roth IRA limitations proposed today
« Reply #148 on: November 23, 2021, 10:28:24 AM »
https://www.cnbc.com/2021/11/01/tax-strategy-of-the-rich-backdoor-roth-survives-in-latest-democrat-plan.html

Backdoor Roth might survive?

This article is from 11/1.

It was put back in a few days after that.

Was it? Haha. I saw the article was a couple weeks old but didn't think anything changed since then. Oh well

I believe it was put back in as well.

The early versions of the bill were quite varied in the pay-for section.  Now that a version has passed the full House, I expect those variations to decrease, but I personally still expect some changes in the Senate.  Those should be well publicized and easier to follow though.

MustacheAndaHalf

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Re: New Roth IRA limitations proposed today
« Reply #149 on: November 24, 2021, 02:59:27 AM »
Schwab's legislative expert described the changes that are heading to the Senate.  The mega backdoor Roth is prohibited.  The $10 million limit on IRAs is delayed a decade, so it has no effect until 2031.  While unrelated to this thread, the state and local tax (SALT) exemption rises from $10k to $80k, which is likely controversial.  New York and California have population based representation in the House, but only 4% of the Senate.  If the legislation moves quickly, maybe the $80k SALT exemption will be dropped but the IRA and Roth changes remain.