Comments on: Your 2021 Guide To Actually Saving Real Money

By: Mr. Clipping Chains

Mr. Clipping Chains — Fri, 14 Jan 2022 00:37:20 +0000

In reply to Bob Ross. Correct you are, Bob! Get ready to pony up on the tax bill for the ring pop. Thanks for the clarification.

By: Bob Ross

Bob Ross — Thu, 13 Jan 2022 23:18:37 +0000

Note that the HSA funds used for ring pops after age 65 are not tax-free. They’re still only tax-free for qualifying medical expenses. But they are penalty-free after age 65.

By: Mr. Clipping Chains

Mr. Clipping Chains — Wed, 20 Jan 2021 01:09:34 +0000

In reply to Courtney. Thanks Courtney! So a trad IRA will lower your tax obligation in 2021, if that’s important. If you are looking to beef up usable (I.e. spendable) money, I’d go taxable. Just keep in mind that Roth IRA funds have to “season” for five years before withdrawal to avoid penalty. If you already have five years in taxable (+ cash), then I’d maybe consider the Backdoor Roth.

By: Courtney

Courtney — Wed, 20 Jan 2021 00:59:37 +0000

Very clear and excellent post! After maxing out employer 401k, do you recommend funding a Traditional IRA (I do not qualify for Roth) before moving on to taxable investment accounts? I always have maxed out my contributions to the IRA, but expect to FIRE in 1-2 years so thinking of saving in more easily available accounts.

By: Mr. Clipping Chains

Mr. Clipping Chains — Mon, 18 Jan 2021 20:30:48 +0000

In reply to Frugal Professor. Thank you sir! Excited about diving more into taxes and Roth conversions! Check this guy out in the meantime ☝️

By: Frugal Professor

Frugal Professor — Mon, 18 Jan 2021 20:28:14 +0000

Great post!

By: Mr. Clipping Chains

Mr. Clipping Chains — Mon, 18 Jan 2021 16:17:54 +0000

In reply to Briana. Great Briana, glad it's helpful. Definitely check out that Mad Fientist post linked, and this one by GoCurryCracker. I'm going to do an interview/case study on our situation with a fellow climber/tax nerd. Mrs. CC and I are living this in real time!

By: Briana

Briana — Mon, 18 Jan 2021 16:07:12 +0000

Thanks for the great post! I especially appreciate the paragraph below bc I’ve been unsure of whether to max out my Trad IRA or split the money and fund a Roth too. I’m excited for this upcoming post!

“ Withdrawing Retirement Funds Early: The Roth Conversion Ladder

Note: For those eyeing a potential early retirement, I’d aim to dominantly fund a traditional 401(k) with pre-tax dollars, foregoing Roth contributions. Once retired and seated squarely in the 10-12% income tax bracket, the Roth Conversion Ladder allows for early access of retirement funds. This strategy is used to effectively pay little or no taxes on this income. More on this in an upcoming post.”