<p>Thanks, but I never have been able to figure out the system. Though I don’t consider being able to keep a bit more of my own money a “gift”. One would need to have the perspective that all money belongs to the government, and if they allow you to keep more of what you earned, it is a gift. I’m all for paying reasonable amounts of taxes, but I will never have that mindset.</p>
<p>I don’t think all the money belongs to the government.</p>
<p>I think some of the money does.</p>
<p>You don’t have a responsiblilty to pay more than the tax laws allow.</p>
<p>I am feisty because my accountant made a mistake on my returns for multiple years. I am waiting for him to fix this year’s return. </p>
<p>Very, very annoying. I don’t want to pay more in taxes than I need to either. Lol</p>
<p>I don’t know that I’d give him another chance. Hopefully he won’t keep messing it up.</p>
<p>Yeah…</p>
<p>I have been with him for 30 years. </p>
<p>I don’t know…</p>
<p>When I was working I did not have a Roth IRA because my income exceeded the limit for a Roth. I did not convert any traditional IRAs to Roth when I was working because the taxes owed would have been a high percentage of the amount converted. Now that I am not working and have almost no income it makes sense to convert a small amount of traditional IRA to Roth every year. With personal exemptions and a little real estate taxes and a few other small deductions there will be little or no federal taxes owed with $25,000 in income, or more… I haven’t run the exact numbers. I joke that I have solved the tax problem: No income = no tax. Yes, we are living mostly on savings at the moment. Fortunately we have some savings but our situation is not sustainable indefinitely. I used to think I was getting a big tax break on my $25k per year real estate taxes but then I took a hard look at the numbers and realized that with the AMT I wasn’t really getting a deduction for most of my real estate taxes. I paid a lot of income taxes when I was working (and other taxes).
The state of NC is not nearly as generous as the Feds. I pay state income tax on every dollar earned. </p>
<p>A federal (or state) asset tax would make me very unhappy. If they can tax your home, land, car, and other personal property, why not tax your bank and brokerage accounts?</p>
<p>Ok…let’s not go there. (The asset tax). NJres, My situation is similar to yours except I am younger. :)</p>
<p>So, if I get into a situation where for a year I don’t pay a federal income tax, and I am called a freeloader, by some nut case who never is going to pay the taxes I paid…well I…I …can’t swear anymore on this site. :)</p>
<p>So NJres…are you going to get a part time job? Or are you going to wait until you are 80 and then say, “Oops.”?</p>
<p>What kind of job can ex-traders get besides, “Would you like fries with that?”.</p>
<p>^^Please don’t. You already got me in hot water on that one!</p>
<p>But that is a good question for NJres, what do you do? Do you start working again? Expecting a good inheritance (or insurance money from knocking off your spouse—just kidding, of course)? Do you have dedicated kids that are going to help out? Or what do you do? Because it sounds like you think you will run out of money.</p>
<p>Busdriver11… This link is for you.
[The</a> fortunate 400 | David Cay Johnston](<a href=“http://blogs.reuters.com/david-cay-johnston/2012/06/06/the-fortunate-400/]The”>http://blogs.reuters.com/david-cay-johnston/2012/06/06/the-fortunate-400/)</p>
<p>I now think I might not run out of money. 
10 years should be no problem. 20 years should be ok too, but it is impossible to forecast that far out. If social security and medicare remain intact we should be ok. 30 years out? unknown. Beyond 40 years I can’t worry about now.</p>
<p>So what I am doing now is enjoying life. I don’t think I am being irresponsible or naive, but my emphasis is definitely on now rather than 40 years from now, and as I mentioned earlier, having no income now makes the ROTH conversion decision much easier.</p>
<p>Ok NJres,</p>
<p>Not going to worry about you. :)</p>
<p>Interesting chart, dstark. If I read the chart accurately, it is quite notable the very low federal tax rates that people are paying if they make less than 200K/yr. And of course, the decline if you are in the 77.4Mil and over tax bracket. Sure would like to be in that bracket! Somewhere over 200K income, you are starting to pay a far larger percentage in taxes than everyone else. But the obvious take on this is not that the “rich” aren’t paying a fair share in taxes, it is that some very wealthy people are getting away with paying next to nothing because their income is classified differently, which is why I vote for all income to be taxed the same, with most deductions tossed. Not to single out or penalize any specific income group, but to equalize the tax code so you can’t get those special breaks if you’re wealthy enough or have enough political pull to get favorable tax code treatment. Pretty eye opening.</p>
<p>NJres, sounds like you do have it figured out more than most of us. I don’t know how anyone can plan for 40 years in the future. I hope to God that social security and medicare does stay solvent, even if we have to do some drastic changes to it…as it seems to be all some people have in the end. I don’t know if it’s that people are living much longer than they planned, or that life just ended up getting more expensive. I think sometimes people end up getting very sick, or dementia, and lose much of their common sense.</p>
<p>We’re trying to help out my Grandmother, and it is really eye opening. Always thought everything was just fine, would bring her things she needed, but she’s living in a very nice retirement facility and seemed happy as can be. Just found out, she has almost no money left and really needs more medical care and can’t afford to live there. Trying to think of how she got into this situation. Wondering, why would she have decided to move into these fancy retirement homes with my grandpa when she was only in her mid fifties, and could have easily kept cooking and taking care of the home. Why did they have to keep fighting with the staff at these places, getting kicked out of a few (and no doubt losing their large deposits). Why did she decide to retire early when she could have worked many more years, and now getting a miniscule retirement check. Why did she decide to to go on multiple cruises after my grandpa passed away (single cabins, balcony rooms only, of course). Why didn’t people who were pretty intelligent make smarter decisions in their earlier years? And this was before dementia started kicking in, and bank account went to zero. I don’t get it.</p>
<p>A lot of people think that if they run out of money, the state will take care of them and to some degree they’re right. I know a number of people in their 50’s who haven’t saved a dime and aren’t at all concerned.</p>
<p>^^Really? Wow, that’s crazy. I can’t imagine trusting the state that much! Sure, you might be able to count on a minimal level of support, but who wants to live on next to nothing, even if you are certain of it?</p>
<p>I’ve been broke before, and had to give up things like coffee, alcohol, some electricity and buying a single thing. Doable when you’re young, but who wants to do that in retirement? What’s the point if you can’t even drink a glass of wine?</p>
<p>On that thought, I’m getting thirsty.</p>
<p>Unless you have significant assets, you’re most likely going to end up with the state paying. In our state, the average price per year for a private nursing home room is 140k.</p>
<p>Busdriver11, those are not federal tax rates in the chart. Those are federal income tax rates. Very, very big difference because people who get paid wages pay SS too.</p>
<p>"On top of his $9,225 federal income tax, he also paid $9,409 in payroll taxes, which include Social Security and*Medicare taxes. Half of the payroll tax was deducted from his check. His employer paid the other half, which was really hidden wages taxed at a 100 percent tax rate.</p>
<p>His total federal tax burden was 30.3 percent, exactly 50 percent more than the 20.2 percent tax burden, measured the same way, on the 400 at the top."</p>
<p>The rich pay lower percentages than the middle class too. This bothers me, but you knew that already.</p>
<p>Busdriver11, I do love the way you look at things. :)</p>
<p>As far as your grandmother goes, I think it is tough to plan so many
years out. There was a study that said after age 53 people’s financial </p>
<p>thinking declines.
If you live long enough, The compounding costs of living are hard to
handle for those that don’t have pensions and are not in the top 2-5 percent of wealth. Of course when you retire is important. If you retire in your 60’s instead of your 50’s you need less.</p>
<p>Depending on what you estimate your returns on money are going to in the future ( difficult to say the least) and inflafion and taxation, a person that retires today and wants to live with an income of $100,000 is going to need some bucks. If that person lives 40 years, that person may need $4,000,000. Not too many people have net worths of $4 million. SS and medicare will lessen the amount somebody needs. If somebody ends up in a nursing home for years, more is going to be
needed.</p>
<p>SS can be worth 1 million to somebody that is going to retire in her 50’s and lives into her 90’s. Medicare is worth a fortune too. Remember that
when somebody wants to play around with these programs.</p>
<p>My folks are living in an independent-assisted living center. It is very expensive and they aren’t in the assisted living section yet.</p>
<p>My aunt and uncle would like to move to a place like my patents. My aunt is 75. I said to her, "You are too young. Both your parents lived into their 90’s. Your money is likely to run out while you are alive. My aunt is worth over 1 million.</p>
<p>A million doesn’t go that far anymore. If she didn’t have SS or medicare, she would be toast.</p>
<p>I think depending on the state when you are broke is a risky game.</p>
<p>The small section In post 56 that is in quotes is from the link in post #48.</p>
<p>If there is a problem with that please erase the quoted section.</p>
<p><a href=“http://news.ycombinator.com/item?id=1627889[/url]”>The US inflation rate over the last 40 years is readily available from the US De... | Hacker News;
<p>I think what is in this link shows why it is difficult to retire for 40 years for most people.</p>
<p>Hopefully inflation will be lower over the next 40 years compared to the last 40 years.</p>
<p>I do understand that when you are talking about tax burdens, you are adding in social security and medicare, which raises the burden for lower/middle income. And maybe it should, as people in this group will benefit directly from these programs, probably much more so than upper income people. But you aren’t including the burden that many upper income people pay, such as a higher state income tax rate, and more in sales tax and property tax. Add in the loss of benefits unqualified for (such as college assistance and limited deductions), and upper income people pay more than those numbers indicate.</p>
<p>I know (or think) that you would be fine with many people paying up to 50% of their income in taxes, and many others paying nothing at all, right? But unless you change what how income is taxed, you’re still getting billionaires paying very little.</p>
<p>As far as this statement,
“The rich pay lower percentages than the middle class too. This bothers me, but you knew that already”</p>
<p>I guess it depends upon what you consider as “rich” and what you consider as “middle class” as to whether I’d consider that statement accurate.</p>
<p>Ok busdriver11…</p>