Anyone done a Roth IRA conversion?

Parent Cafe
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<p>" In our state, the average price per year for a private nursing home room is 140k."</p>

<p>And in the state of New York if you are severely disabled, apparently it can be 1.9 Million/year. Both situations are highway robbery. Someone is ripping off the system, or there are massive inefficiencies. You could have 24 hour a day help at your home to roll you over and take care of every last need for far less than that. Guarantee you that if families were paying that from their savings instead of medicaid, nobody would be paying it. Easier to get it done when someone else is paying for it. I don’t really think I’d want to live that way for long, and I sure wouldn’t if I was draining my kids resources.</p>

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<p>^^And is that what you say when you think someone is completely full of it? :D</p>

<p>Guaranteed to get a bad reaction from your family, that’s for sure!</p>

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<p>Well…</p>

<p>Are you going to change your mind if I continue? ;)</p>

<p>I will just say that the numbers I provided took into account deductions that were lost.</p>

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<p>“And in the state of New York if you are severely disabled, apparently it can be 1.9 Million/year.”</p>

<p>I don’t know what this is for our state, but I do know that for New York, a private room in a nursing home is 123k and looking at a map of the US, our state has the highest cost for nursing homes.</p>

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<p>Maybe. I have moderated my position considerably over the years.</p>

<p>What specifically should I change my mind about?</p>

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<p>DocT, I wonder why your state has such high costs. I was talking about this article that came out recently, which I realize is different than your nursing home facilities:</p>

<p>"ALBANY, N.Y. (AP) — New York’s residential centers for the developmentally disabled cost Medicaid about $1.9 million a year for each patient, and federal overpayments that total $15 billion since 1990 should end immediately, according to a congressional oversight committee.</p>

<p>In a report this week, the House Committee on Oversight and Government Reform said the overpayments represent “massive waste,” are likely illegal and should stop immediately. The report also faulted lax oversight."</p>

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<p>Our state has high costs for everything. It is the worst state to retire in from a financial standpoint. That’s one reason I plan on retiring in a neighboring state which compared to most of the country is still lousy but better than here.</p>

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<p>

</p>

<p>Not necessarily the highest cost. Is $123k by the YEAR? In CA it could be higher. Just spoke to a RN friend who is working for a skilled nurse facility this afternoon. As she stated, the “regular” charge in her facility is about the same as in NY. It would be much higher cost if an immobile patient is admitted. In a “regular” situation, one CNA(certified nurse assistant) takes care of 8 patients. If you need undivided attention of a CNA, the costs increase exponentially.</p>

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<p>this is an average cost: [2012</a> Cost of Care: Long Term Care Survey - Genworth](<a href=“http://www.genworth.com/content/non_navigable/corporate/about_genworth/industry_expertise/cost_of_care.html]2012”>http://www.genworth.com/content/non_navigable/corporate/about_genworth/industry_expertise/cost_of_care.html)</p>

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<p>and as far as retirement: [The</a> Costliest States for Retirement - Encore - SmartMoney](<a href=“MarketWatch: Stock Market News - Financial News - MarketWatch”>MarketWatch: Stock Market News - Financial News - MarketWatch)</p>

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<p>Busdriver11, do you believe in a progressive tax structure? A flat tax structure? </p>

<p>Should household with different incomes pay the same percentage of income in federal taxes? Should a household with an income of 61,500 pay the same the same percentage of income in federal taxes compared to a household with an income of 350,000?</p>

<p>Let’s say both households pay 30 percent of their income in federal taxes. That will mean the after tax incomes for these two families are 43,500 and 245,000 respectively. The percentage difference incomes between these two households are the same pre-tax and after tax.</p>

<p>Sales taxes and property taxes are not federal taxes. They are state taxes. States have different degrees of progressivity. I probably should say regressivity.
Most states have regressive tax structures.
<a href=“http://www.itepnet.org/whopays3.pdf[/url]”>http://www.itepnet.org/whopays3.pdf&lt;/a&gt;&lt;/p&gt;

<p>I think it is page 6.</p>

<p>Most states have regressive tax systems. Poor and middle income people have higher state tax burdens than the wealthy.</p>

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<p>Sure, I believe in a progressive tax structure. Not necessarily flat, but less complicated, with fewer loopholes and breaks.</p>

<p>Of course higher income levels should pay a higher percentage than lower ones. And income of all types should be considered the same.</p>

<p>I don’t think there are many households with an income of 61.5K that pay 30% of their income in federal taxes. I can’t imagine how that would happen.</p>

<p>Many state taxes are highly regressive, making people pay high levels of taxes at a fairly low income. Thank God people in my state aren’t stupid enough to vote in a state income tax, though some keep on trying. They pretend it will only be a tax on the rich, but we are smart enough to know they will change the rates and apply it to whomever they choose.</p>

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<p>It was explained in the link in post 48 how somebody with lower incomes could pay federal taxes at the same rates as somebody with higher incomes.</p>

<p>I posted the link and you came up with reasons why those rates weren’t accurate. You said that higher income people lose deductions.</p>

<p>I said that was already taken into account.</p>

<p>Then you brought up state taxes and said that higher income people pay more in state taxes.</p>

<p>State taxes are regressive not progressive.
The fact is our tax structure in the US is not very progressive.</p>

<p>Households that make 60,000 a year probably don’t have too much money to put into IRAs or Roth IRAs. Just to keep with the topic thread. :)</p>

<p>The flat tax Proposals by people like Forbes are very regressive.</p>

<p>You would hate California’s income tax. I don’t like it much myself.</p>

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<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>I didn’t address that because it seemed like cherry picking one situation to try to fit your point. </p>

<p>First point…if you’re single, making $62.5K, with no dependents? You’re a lot richer than most of us on this forum! You probably have some dispensable income to pay a share of taxes.</p>

<p>Second point…counting his employers share of medicare and social security as tax on him? I don’t think so. Anyone out there REALLY think their employer would give them that money if they didn’t have to give it to the government? No way, people usually get paid prevailing wages for their location and position, or what their union negotiates for them. Don’t believe for a second that if our employers didn’t have to pay those taxes we’d all see a 9.1% raise in our paychecks (at least of that portion).</p>

<p>Third, and most important point. This is a comparison to the top 400 people who get away with paying low/no taxes because they find holes in the tax code, or ways to get around paying the taxes that most of us do. That is serious cherry picking, not the reality of the majority.</p>

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<p>“First point…if you’re single, making $62.5K, with no dependents? You’re a lot richer than most of us on this forum! You probably have some dispensable income to pay a share of taxes.”</p>

<p>Really? Busdriver11, You are buying condos all over the place. You don’t have dispensable income? If you can pay private school tuition, you have dispensable income.</p>

<p>As for everybody else in this forum, some people are going to have more dispensable income, some are going to have less.</p>

<p>Since you addressed single taxpayers…
If you look at income tax rate schedules, single taxpayers pay more in
taxes for the same amount of income compared to married people. A single person that makes 60,000 is going to pay more in taxes compared
to a married couple making the same amount of money. (I don’t have a problem with this.) One person can live cheaper than two and the tax code adjusts slightly for this.</p>

<p>Your second point is arguable. The system is a little more progressive the way you look at it. Will businesses pocket 100 percent of their share of SS? I think that is extremely unlikely, but businesses might pocket a majority of their share of SS.</p>

<p>Your third point. ??? The article is about the top 400, but there is
information from the IRS on the rest of us. </p>

<p>If you had a choice, would you rather really be a single taxpayer making
61,500 a year compared to a married couple making more than 300,000 a year?</p>

<p>The point that a single taxpayer making $61,500 might have more
discretionary money to spend after taxes conpared to a married couple making over $300,000 is bs.</p>

<p>You can tax the $61,500 person zero and tax the $300,000 couple 50 percent and the couple has more after tax income.</p>

<p>People tend to spend more as their incomes rise so they feel squeezed. They want to live in nicer neighborhoods, buy bigger houses, send their
kids to better schools, might spend more on cars and vacations, might
want to save more. There is nothing wrong with any of these things. </p>

<p>I will still take $300,000 in income as a married couple with kids over a
single taxpayer making $61,500. :slight_smile: How many kids are we talking
about? :slight_smile: You have a bunch of kids, I might change my mind.</p>

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<p>Yes, we’re buying condo’s, but it’s not with dispensable income. It’s with money out of thin air (zero percent credit cards, HELOC). I was going to start a thread on this, asking where to get cheap money, because it is next to impossible to get a non-owner occupied loan on a condo. It’s risky and if interest rates go up, we’re in trouble. Artlovers suggestion about a self-directed IRA is interesting for real estate investors, but you have to have money to put in there first. I don’t consider things like college tuition, mortgage and insurance as dispensable income, but I’m sure many do.</p>

<p>"If you had a choice, would you rather really be a single taxpayer making
61,500 a year compared to a married couple making more than 300,000 a year?</p>

<p>The point that a single taxpayer making $61,500 might have more
discretionary money to spend after taxes conpared to a married couple making over $300,000 is bs."</p>

<p>Depends on whom you’re married to…you might be better off single! I’m a firm believer that it matters more what you save than what you make. And I don’t think these people in your example should be paying the same rate. But I’ll betcha that some of these kids graduating with high paying jobs in the tech industry (who are lucky to have no college debt), with no obligations, feel rich as can be. A person with the same income who is a single parent, couple of kids, mortgage, debt…feeling broke. </p>

<p>And yes, I think businesses would pocket the extra money if they didn’t have to pay ss and medicare. Along with if they don’t have to pay healthcare costs because they choose to pay a tiny fine. That money isn’t going into our paychecks, it’s going to their bottom lines. It would be nice to be wrong on this one.</p>

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<p>" But I’ll betcha that some of these kids graduating with high paying jobs in the tech industry (who are lucky to have no college debt), with no obligations, feel rich as can be. A person with the same income who is a single parent, couple of kids, mortgage, debt…feeling broke. "</p>

<p>Absolutely…are we switching away from taxes and into lifestyles?</p>

<p>I am going to make a guess that the tech guy or tech gal pays more in taxes, but has more more money that can be saved.</p>

<p>Ok…I want you to start a thread…</p>

<p>You are borrowing everything when you buy a condo? With adjustable interest rates? How long do the credit cards stay interest free? You told me the condos are cash flow positive. How high do interest rates have to rise before you are running negative cash flows?</p>

<p>I think in certain areas of the country, if you have kids, it is difficult to
have savings if your income is below 150,000 a year. And you may need a lot more if you have kids in private schools or private colleges. </p>

<p>A family in a very high bracket, let’s say makes 360,000 a year and pays a third in taxes still has 240,000 left. Even with a couple of kids in private school, that family should still be ok. Maybe not saving a lot, but
ok. Not neccessarily rich. I know that family is called rich, but that family is not rich. Not unless there is savings, inheritance, or great pensions. Something else is needed besides that income.</p>

<p>Pensions can be worth millions of dollars. One thing about the statistics on wealth is it doesn’t include inheritance. That is ok there aren’t that
many families that are going to inherit substantial sums and with the cost of health care, who knows what the inheritance is?</p>

<p>If it wasn’t so difficult, pensions should be included in wealth figures. Wealth figures are understated.</p>

<p>Saving is very important. I agree.</p>

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<p>Yeah, I should start a thread. But we’ve gotten so many of these low/no interest rate credit cards and loans that our credit score is starting to go down, so we’re thinking it might be best to just pay everything down like crazy and get the score higher before applying for more money. Our loans/credit cards are from 0%-1.99% for periods of 1-5 years (then we’ll pay them off), with a HELOC floating of 4.875%. Interest rates for a HELOC would have to go up to about 8-9% before we’d go negative. I can also lock into a 5 year HELOC rate of 4.75% if I want.</p>

<p>Pensions should be included, but then again it seems they’re not a certainty anymore. Most of my compatriots have lost what they had counted on, as a tidy pension to retire on. What used to be a sure thing has disappeared for many.</p>

<p>That family that makes 360K is absolutely not rich. If you have 240K left after paying taxes, as in your example, subtract the going rate for most private schools (55K each for tuition, room and board), and you have 130K left. Comfortable enough to live in nice housing, pay into 401K, go on a couple of trips a year…but surely not rich. If you live in NYC, you just might be broke. In Omaha, if you stay in that nice little house you bought 20 years ago, you might be rich.</p>

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<p>I think you are pretty safe on that interest risk for awhile.</p>

<p>If you aren’t going to pay off the heloc, why not just convert it into a mortgage? A mortgage has to be cheaper than a heloc. There are 5 year fixed loans and 7 year fixed loans out there.
Or are you going to pay off the heloc? You are going to increase your borrowing and you like the flexilbilty of the heloc?</p>

<p><a href=“https://www.wellsfargo.com/mortgage/rates/[/url]”>https://www.wellsfargo.com/mortgage/rates/&lt;/a&gt;&lt;/p&gt;

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<p>Problem is, it is near to impossible to get a HELOC or a cash-out refi on a non-owner occupied investment condo. At any rate, believe me, I’ve checked. Investment property narrows it to almost nobody, condo narrows it to only two lenders. That I’ve found, and I’ve looked long and hard. Don’t want to get a second mortgage instead of a HELOC on our home, values have gone down and nobody would give us money on it. I appreciate that my bank has not re-evaluated the worth of our home and adjusted the HELOC. I know that has happened to many.</p>

<p>Only options are—Pentagon Federal non-owner occupied HELOC, 4.75% for 5 years, then can adjust every 5 years, only pay appraisal fee. Aim mortgage, rates are 4.25% for almost 2K in closing costs, 30yr mortgage, and will only give us 93K (based on the purchase price paid for a short sale, not the true value). I’m leaning on the PenFed HELOC, as you can pay it down like crazy when you get your paycheck, then move some money back when bills are due, lowering interest paid overall. Just can’t stand having loans and paying interest, really.</p>