<p>“That was from the article that <em>you</em> posted the link to, so don’t look at me”</p>
<p>I’m chuckling at that one. It has not been a happy day, so I appreciate the laugh, notrichenough.</p>
<p>The reality is, is that even though people at higher income levels generally have more deductions, they are severely limited at a certain income levels. Between me and my husband, we generally have 25-30K worth of deductible job expenses (union dues, travel, commuting and food expenses). We are allowed to deduct exactly 0 of those expenses. Yet if our company pays for us to get to work, we are taxed on that benefit.</p>
<p>Well, I suppose that you could do a NPV using short-term interest rates but I don’t think that the difference will amount to a hill of beans.</p>
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<p>Do you really believe that will happen? I don’t.</p>
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<p>Yes. I know. There are dividends too. And they are tax advantaged. There’s interest too but you’re really doing something wrong if your retirement accounts are in money markets. What did I miss that isn’t tax advantaged?</p>
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<p>Yes. But they will pay taxes on them eventually. The income/gains should be a lot bigger than the contributions though.</p>
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<p>I just try to make as much as I can in all of my accounts.</p>
<p>Because I am trying to be Helpful here amongst…I guess I should respond to your post responding to my post, BCEagle91.</p>
<p>"> deferred tax revenue is worth less than revenue today.</p>
<p>Well, I suppose that you could do a NPV using short-term interest rates but I don’t think that the difference will amount to a hill of beans.</p>
<p>Actually, that comment doesn’t deserve a response.</p>
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<p>Do you really believe that will happen? I don’t.</p>
<p>What may happen is a person who retires may end up in a lower bracket than when he was working. That can happen even if tax brackets are higher. Yes I do believe that is going to be the case for many taxpayers including myself. We will see. No guarantees.</p>
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<p>Yes. I know. There are dividends too. And they are tax advantaged. There’s interest too but you’re really doing something wrong if your retirement accounts are in money markets. What did I miss that isn’t tax advantaged?</p>
<p>Uhhhh… Are bonds money markets? </p>
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<p>Yes. But they will pay taxes on them eventually. The income/gains should be a lot bigger than the contributions though</p>
<p>I already answered that.</p>
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<p>I just try to make as much as I can in all of my accounts.</p>
<p>That’s fine. I try to throw bonds with taxable interest in my tax deferred retirement accounts and muni bonds that pay tax free interest in taxable accounts. I am pretty sure others are doing this too. :)</p>
<p>"You have enough deductions and subisidies. Be happy.</p>
<p>“Yet if our company pays for us to get to work, we are taxed on that benefit.”</p>
<p>If the company did that, it would be worth it for you. You would save money."</p>
<p>My unhappiness has nothing to do with deductions. I’m unhappy because I have to make a phone call and lie. Everybody wants/needs me to lie, including the person I’m talking to, and everyone that it affects. Everyone. But it is almost physically impossible for me to lie, I don’t know how I can even do it.</p>
<p>If my company didn’t pay for my ticket to get to work, I wouldn’t pay the $460 ticket price. I would jumpseat, for free. As it is, it is barely worth it for me to pay the taxes on that ticket as opposed to getting on a jumpseat. My point is that is seems odd to get taxed on a work related benefit, yet be limited from writing off any work related costs. And I wouldn’t be limited, if we decreased our income.</p>
<p>“My unhappiness has nothing to do with deductions. I’m unhappy because I have to make a phone call and lie. Everybody wants/needs me to lie, including the person I’m talking to, and everyone that it affects. Everyone. But it is almost physically impossible for me to lie, I don’t know how I can even do it.”</p>
<p>I am sorry about this. I don’t like to lie either.</p>
<p>The good news is, I just got the nerve to call the person up, ready to lie…and they were out of the office. I got an email address. Maybe I can do it online instead. That’s a lot easier. And everyone will be happy.</p>
<p>Well, I guess that means that you concede the point.</p>
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<p>That’s different from what you wrote. I think that tax brackets for
the same amounts of income will be higher in the future. Whether or
not you are in a higher or lower bracket depends on how much you pay
yourself out of your retirement funds per year though I think that
there is some mandated floor.</p>
<p>If you’re younger, then inflation (Fed’s printing $85B/month these
days), may put you in a higher bracket. If you’re closer to
retirement, then inflation may have less time to work its magic.</p>
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<p>Money markets may hold short-term debt instruments but they aren’t
paying a lot of interest these days. I guess that they may be safer
than stocks right now.</p>
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<p>Then I did too.</p>
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<p>How many? A few? Many? Most? Most people I talk to have their retirement
funds in S&P 500 Index Funds.</p>
<p>I think the tax brackets are indexed for inflation. </p>
<p>You keep talking money markets. Some people own bonds. I keep reading where the public is putting their money in bonds and bond funds. I own bonds in my retirement account. </p>
<p>As fas as investing in S&P index funds in a retirement account, I am sure people are doing that, but the people I talk to are for the most part managing their own retirement account and aren’t indexing. How many? I haven’t counted. </p>
<p>I have been thinking about investing in S&P index funds. Maybe I should start a new thread.</p>
<p>Premiums for the high BCBS PPO medical insurance family plan we are on with H is just a bit over $1000/year, with both the portion we pay and the portion H’s employer (the federal government) pays. It will be well under the $27,500 which is a significant amount–that are supposedly “cadillac plans.” Our plan provides exceptional coverage (for example, we owed NOTHING for expenses related to both of our children’s births, no lifetime maximum, maximum out-of-pocket excluding Rx is $2500/person, $7500/familyl–have hit that a few times, no pre-existing condition exclusion). I wish everyone were allowed to have the plan we enjoy at the premiums we pay.</p>
<p>$1000/YEAR for both sides of your insurance premiums? Are you sure? I’ve worked with some government plans and NONE of them have been anywhere near that low for both sides.</p>
<p>According to the OPM website, <a href=“http://www.opm.gov/insure/health/rates/nonpostalffs2013.pdf[/url]”>http://www.opm.gov/insure/health/rates/nonpostalffs2013.pdf</a>, the highest total premium for family coverage on a monthly basis is under $1600/month x 12 = under $19,200/year. This is both the employee’s share AND the share paid by the employer (federal government). Of course, these are just the national plans and there is variation by region and particular states offer different plans as well, but it is a useful yardstick. Of course most employers don’t have the bargaining power the federal government does when negotiating contracts with insurers.</p>
<p>I am grateful that we are able to get the insurance we do have at such reasonable rates.</p>
<p>According to the OPM website, <a href=“http://www.opm.gov/insure/health/rates/nonpostalffs2013.pdf[/url]”>http://www.opm.gov/insure/health/rates/nonpostalffs2013.pdf</a>, the highest total premium for family coverage on a monthly basis is under $1600/month x 12 = under $19,200/year. This is both the employee’s share AND the share paid by the employer (federal government). Of course, these are just the national plans and there is variation by region and particular states offer different plans as well, but it is a useful yardstick. Of course most employers don’t have the bargaining power the federal government does when negotiating contracts with insurers.</p>
<p>I am grateful that we are able to get the insurance we do have at such reasonable rates.</p>
<p>Himom, is it $1000 per month? or $1000 per year as you wrote above. We just bumped up our deductible from $2500 to $3500 and our coinsurance from 20% (up to $2000) to 30% (up to $3000) but our premium went from around $1100 to $690 something. Private pay BCBS for the 2 of us.</p>
<p>Back to taxes. 5 years ago I went from a relatively high income profile to a very low income. All of a sudden there were things I could take advantage of that were never previously considered. I wasn’t ready for this. There was one year when I had a small amount of unearned income but it was just enough to make me ineligible for a tax credit. I can’t remember the exact amounts but there was no sliding scale - it was all or none. Turned out that $400 of interest income made me lose a $1500 tax credit.</p>
<p>The premium for the insurance is under $1600/month–we pay 1/3 or 1/4 of it and employer pays the rest. We have no deductible and pay a co-pay of $15/doctor visit. We have BCBS PPO private pay and have been very happy with it. We went from lower income to middle to higher income. Each time we switched brackets, we qualified for fewer credits & other things, but are NOT complaining. Not sure what bracket we’ll be in after H retires but HI does NOT have income tax on pensions, so that will be a savings, since that will be our primary source of income after he retires this month.</p>
<p>busdriver11–she said upthread that her plan costs less than $1000/year for the employee and employer portion. Maybe the year was a typo and she meant month, which is reasonable, but not a $1000/YEAR.</p>
<p>“Premiums for the high BCBS PPO medical insurance family plan we are on with H is just a bit over $1000/year, with both the portion we pay and the portion H’s employer (the federal government) pays.”</p>