For the record, I was the one who said “come out and contribute.” @IxnayBob did not. 
I thought they might have something useful to share.
@dstark
What you wrote makes sense if trading IS your business. But, how many people can make a decent living doing that. Are we back to day trading? If so, I’m definitely out of that conversation.
No. We aren’t back to day traders. Day traders are in trouble.
Most people can’t do this. I am not doing this anymore.
I had book group today. My H & I are by far the youngest. ( in our 50’s) Both my parents are deceased(@45,&75)
Three women have mothers who are still alive, in their mid 90’s, two have mils, in their mid 90’s, and a couple have both parents in their late 80’s, living in their house. (my inlaws are also both still alive and in their house, in their mid 80’s)
It kinda freaks me out how long that we have to plan for.
I also have to start doing research, cause I inherited one of my mothers stock funds, which is invested in things that I really dont want. I meant to do it a while back, but Im not great with that sort of thing.
There are states that don’t tax pensions and SS, but do tax other forms of income, even warm HI. Sadly, we have a very high cost of living and medical care (especially specialists) are tough to get, especially outside of Oahu.
Money is not everything. Big houses aren’t everything. Some people will pay up to live in more expensive areas like Hawaii if they can afford it. Some people will pay higher taxes to live in NYC or Calif or other expensive places. I know some people who left Calif because of taxes. Not many. I hear Utah has a reasonable cost of living. I don’t believe Utah has an estate tax.
NJres, you have tax exempt munis in your ira because…
They provided you the best after tax returns considerng the risk in the fixed income category?
Your financial assets are in iras?
I like your latest avatar better than your bald headed avatar.
Himom, are there stores where the locals shop and vacationers don’t know about? Stores with cheaper prices? I think there are people that would like to retire in Hawaii. Away from the coasts, are home prices still expensive?
I think I’ve mentioned that my son is a portfolio manager in a hedge fund. His income, coming from profits from his group minus expenses and minus a few other calculations that I don’t understand, is totally considered ordinary income. He pays NYC 4% city tax, NYstate and Fed income taxes. He nets less than 50% of his income, probably more like 40% after everything’s been taken out. His total compensation has been x times to xx times his base salary.
I asked him about carried interest and he said perhaps the partners of the hedge fund receive part of their total profits get this loophole but he absolutely does not. He is just an employee.
" Igloo, I would like to see a link that states the president can wipe out carried interest. I believe the president has proposed wiping out carried interest. Why didn’t the president just do it?"
Why do you think he would do it if he could, as opposed to just talk about it? I mean, those people are the important donors, right? So I’m sure he doesn’t actually want to raise taxes on them.
That might be true, busdriver11.
I was not talking about carried interest in my other post. There are other ways to get long term cap gains tax rates.
Everybody who owns the account and trades futures gets this…
I guess I confused posters. Ok. I reread post 5296 and I did not mention carry interest. 
This is igloo’s fault. i am off in a tangent here. We are off on a tangent here.
The taxation of carried interest is not going to affect most people’s retirement.
[quote]
The origin of carried interest can be traced back to the 16th century, when European ships were crossing to Asia and the Americas. The captain of the ship would take a 20% share of the profit from the carried goods, to pay for the transport and the risk of sailing over oceans/quote
Just a little intermission for any others who haven’t heard the term before.
Love it, @momsquad. Thanks.
From my days in the HF industry, the great thing that the HF industry (for themselves) other than enshrine 1 and 20 or 2 and 20 fee structure was to be able to defer paying tax on profits made by the partners if they reinvested for a number of years (10 or more). I don’t remember the exact details but I think it was like this: Because the profits from this year were uncertain, the partner didn’t recognize the income and thus pay tax until the end. I’m guessing this was considered ordinary income because the trading periods would likely be too short.
There was also a way to wrap an insurance product around and investment product which also had the effect of deferring taxation and maybe even making it capital gains. It was the sort of thing that I suspect would go away because it was a little too clever.
I remember something in a similar vein. When an investor pulled out of a friend’s hedge fund, and the hedge fund had long and short term gains, the investor who pulled out would be saddled with the short term gains. The long term gains would go to the owner of the hedge fund.
Kind of a penalty for pulling out. I have no idea if this is still going on…
President had no trouble pulling exec orders on immigration provoking republicans in congress but he is afraid to pull an excutive order on carried interest and anger billionaires? Whether you like repubs or not, it is a sad state of affairs.
I heard Senator Lee (Utah) discussing President Obama’s plans to change the tax code. He was on Larry Kudlow’s radio show. He said the president was going to issue executive orders to do so.
Sorry if this thread would be considered political. It is not meant to be. I just thought it was relevant in the discussion concerning carried interest.
We knew a doc from WI that did have his off season place in Texas - he had a fairly big family, and after evaluating FL and TX, decided he liked his money going further in TX. He would joke about TX being the poor man’s winter place, but I think he liked the work ethic of many Hispanic and enjoyed fitting in there. He probably also was turned off by FL having so many elderly (and he probably was also going more remote - who wants to keep giving out medical advice once people know you are a retired FP?) If you are considering being a snow bird, you have to be there at least one season of when you would live there - the heat/humidity is something else in many spots. Also the hurricanes, flooding, other natural disasters that possibly could occur. And simple things too like dealing with bugs, termites etc - some that are in one place but maybe have not ever dealt with. In some larger buildings in the south, once cockroaches have invaded, may have a hard time ever having totally eliminated. Tenting for flying termite infestations in some areas like CA and FL. Renting allows so much flexibility, or having a RV. Maybe you find a place you ‘love’ and can then settle in.
I have mentioned this before, but if you are considering AK, consider if you can find docs for regular care outside of the hospitals. SIL has been eligible for medicare, but continues on brother’s insurance because she can’t get docs that will take the medicare payments. Brother has the insurance guarantee for 5 more years, so maybe things will change by then.
Certainly taxes and other financial considerations should be evaluated. However people do continue to live in high cost or high tax states because they like living there and are willing to pay accordingly.
Another thing is that in 5 years, the paradigm may totally change on how to structure retirement finances to take advantage of the laws in place and also living in various places. So I imagine this thread will be long-lived as we continue to discuss how to handle all the ins and outs of planning and implementing retirement.
Hope so. To me, closing that loophole seems elementary. We have Bernie Sanders to thank for if it comes through. I also hope this is not being political.
The article I am still looking also mentioned a few other thing the president can do. I can’t remember what they were.
Let’s just please be careful. I also want to make comments, but I find this thread so informative that I’m resisting the urge (well, tbh, I’m resisting recently ). In the end, tax law will evolve independently of anything we say about it here.
First of all let me say thanks to everyone who has contributed and continues to contribute to this thread. I have learned so much.
So we are in the process of retiring right now. I finally found something I can add to the discussion.
If you have a 401k that only allows you to add to it through your weekly paycheck it is important to max it out as much as you can before your retirement date.
Our date is end of March. The company allows up to 30% pay deduction to be put into the 401k a week. So it would have been optimal to increase this to 30% for the first paycheck of the year and on to get as much of the full benefit of the $18,000 allowed.
Looking forward to getting pension monies and moving full throttle into consulting.
Some of our legs are a bit wobbly…but what the heck. I have come to realize that if we waited until we were standing on a boulder we would never leave.
@sax, I think deciding to retire is a bit like “deciding” to have kids. If we all waited until we were perfectly ready, the planet would no longer have humans.