What if you made $500,000 year?

BMF

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If made $500K without living in a high cost and high tax area, I’m pretty sure I could retire in about 4-5 years with the money I saved. Admittedly, that’s based on my current situation, which includes a military pension when I retire from active duty. If I was younger, I’d work a bit longer and invest a ton so it would have a better chance at sustainability.

MC, we both know good and well 4 to 5 years of making $500K would set us up for life! After taxes, you'd clear around $300K, meaning we (military guys) could put away close to $200K/year.....and if we could do that for 5 years on top of pension and TSP? Wow!

My goal is to work for 4 to 7 years after retirement (which is about 13 months away) and put away 100% of the pension and VA supplement (I'm assuming at least 50%, possibly up to 70%).....and live off the new job salary. I figure I'll put away $300k-400k, on top of maxing out TSP (over 50 years old).

It just blows my mind how much money some people can blow through. ($500K/year = about $25K+ per month net).
 

CGgater

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MC, we both know good and well 4 to 5 years of making $500K would set us up for life! After taxes, you'd clear around $300K, meaning we (military guys) could put away close to $200K/year.....and if we could do that for 5 years on top of pension and TSP? Wow!

My goal is to work for 4 to 7 years after retirement (which is about 13 months away) and put away 100% of the pension and VA supplement (I'm assuming at least 50%, possibly up to 70%).....and live off the new job salary. I figure I'll put away $300k-400k, on top of maxing out TSP (over 50 years old).

It just blows my mind how much money some people can blow through. ($500K/year = about $25K+ per month net).

All true, but I got 3 daughters. I might have to work till I’m dead.
 

Bushmaster

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Most CPA's allow the already populated tax software to spit out several pages of superfluous worksheets and then include it in the delivery at an inflated price.


Bull****. H&R Block and Jackson Hewitt do this.

I have worked at 4 firms prior to this and none of them do it. Get returns by other CPAs and dont see this with them either. Paper and toner cost too much to print unnecessary items.
 

Bushmaster

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I think this is debatable depending on personal investment strategy and portfolio make up to say the least...BTW I'm not saying you're wrong and in fact for someone like me it sounds....well pretty sound. Most of my investments are in local RE, Why? Because I have lived here for over 50 years and have been involved in the LOCAL market for about 30. I've had an Real Estate Appraisal license, Mortgage Broker License and have worked in Title Insurance for the last 5 years now ....I know more about Orlando area RE than probably any RE Broker in the area....I can invest with the utmost confidence.

On the other hand I don't live anywhere near Wall Street and don't know the inner workings of the stock market for sh!t.
If I had a large stock portfolio I would damned sure invest in the highest quality professional money manager/advisor I could find....


We have a saying g in my profession. If you think a good accountant is expensive, wait until you get ahold of a bad one.

The crap people assume they know amazes me.
 

Detroitgator

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We have a saying g in my profession. If you think a good accountant is expensive, wait until you get ahold of a bad one.

The crap people assume they know amazes me.
Again, people make fun of my "Kyosakisms", but I followed his advice, and my good lawyers and accountants have returned multiples, big multiples, over what I have paid them over the years.
 

78

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Bull****. H&R Block and Jackson Hewitt do this.

I have worked at 4 firms prior to this and none of them do it. Get returns by other CPAs and dont see this with them either. Paper and toner cost too much to print unnecessary items.
Relax, dude. I was punking L-Boy over the derogatory comment about brokers. But there is a kernel of truth. I'm a CFP. I collect tax returns from every financial client and also do 65 returns a year. I know what I know.
 

ChiefGator

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Bull****. H&R Block and Jackson Hewitt do this.

I have worked at 4 firms prior to this and none of them do it. Get returns by other CPAs and dont see this with them either. Paper and toner cost too much to print unnecessary items.

A relative worked for a CPA firm and she accumulated the details and input them into a program to prepare taxes. Now a CPA reviewed them and talked to the client about things they might have missed, but preparation is mostly input to a computer program.
 

Bushmaster

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A relative worked for a CPA firm and she accumulated the details and input them into a program to prepare taxes. Now a CPA reviewed them and talked to the client about things they might have missed, but preparation is mostly input to a computer program.


No. It's looking at the information a client brings in, knowing what should be there, knowing what could be there, knowing what can be allocated, etc. Its more than keying numbers into a program.

Then there is planning.

Maybe your tax person sucks. I dont know. But if that is all they are doing, you aren't getting good service.
 

ChiefGator

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No. It's looking at the information a client brings in, knowing what should be there, knowing what could be there, knowing what can be allocated, etc. Its more than keying numbers into a program.

Then there is planning.

Maybe your tax person sucks. I dont know. But if that is all they are doing, you aren't getting good service.


The talking to the client covers all that stuff you are talking about. I do my own planning and tax perp, since I know enough to do so. And my relative was somewhat trained in sorting the data and what to expect. Now these were fairly simple returns, not like say the president's.

Since I have dividend income in retirement, I don't pay federal income taxes at all, nobody could do better than that.
 

Concrete Helmet

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We have a saying g in my profession. If you think a good accountant is expensive, wait until you get ahold of a bad one.

The crap people assume they know amazes me.
I agree. I don't mess with things I don't know or understand...I pay well for professional help because I'm the type of person who likes things done right the first time. I learned early on that when you f vck something up and need someone else to fix it they usually charge extra to fix it :lol:
 

Bushmaster

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The talking to the client covers all that stuff you are talking about. I do my own planning and tax perp, since I know enough to do so. And my relative was somewhat trained in sorting the data and what to expect. Now these were fairly simple returns, not like say the president's.

Since I have dividend income in retirement, I don't pay federal income taxes at all, nobody could do better than that.


When did dividend income become non taxable?

Agree on a simple return. I have an intern who is pretty good at them. Makes my life easier.
 

ChiefGator

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When did dividend income become non taxable?

Agree on a simple return. I have an intern who is pretty good at them. Makes my life easier.

When you don't make much money. Qualified dividends are dividends that meet the requirements to be taxed as capital gains. Under current law, qualified dividends are taxed at a 20%, 15%, or 0% rate, depending on your tax bracket.

I had no idea since my wife does the keying, the program of course knew.

The tax rate on qualified dividends for investors that have ordinary income taxed at 10% or 15% is 0%. Those that pay income tax rates greater than 15% but less than 39.6% have a 15% tax rate on qualified dividends. The tax rate on qualified dividends is capped at 20%, which is for individuals in the 39.6% tax bracket.
 

78

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It's based on ordinary income for 2018. If you have less than $38,600 in ordinary income, qualified dividends are not taxed.
 

ChiefGator

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It's based on ordinary income for 2018. If you have less than $38,600 in ordinary income, qualified dividends are not taxed.

Or more if you are married or head of household. I think it is 78K for 2019.

I really did not know this, but found out. If I had known some investments I made would have been different. Now I do have to make sure I don't earn too much, that has not yet been an issue.
 

78

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Or more if you are married or head of household. I think it is 78K for 2019.

I really did not know this, but found out. If I had known some investments I made would have been different. Now I do have to make sure I don't earn too much, that has not yet been an issue.
Yes, 78.5k for marrieds. It's an inducement from a pro-growth president to put money at work in the market.
 

ChiefGator

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Yes, 78.5k for marrieds. It's an inducement from a pro-growth president to put money at work in the market.

It has been that way for several years, I think over 10 so while I like the idea of being pro growth this changed in 2005 according to wikipedia.

The Tax Increase Prevention and Reconciliation Act of 2005 ("TIPRA") prevented several tax provisions of the 2003 bill from sunsetting until 2010 and further lowered the tax rate on qualified dividends and long-term capital gains to 0% from 5% for low to middle income taxpayers in the 10% and 15% ordinary income tax bracket.

I know many will think this very unfair, but dividends come from cash flow which somewhat is already taxed at the corporate level. Once your budget does not have this expense in it I would be unhappy if say some future congress eliminated it. It is mostly for retirees as I understand it.
 

Bushmaster

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Thanks for clarifying QUALIFIED divivends.

I have liked this law. Came out under Bush I thing. Since these dividends are already taxed at the corporate rate of 35% (now 22), it's a good law. Before at 35% dividend holders were getting hosed. Add in state tax and a dollar of profit will get taxed over 50%.
 

ChiefGator

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When did dividend income become non taxable?

Agree on a simple return. I have an intern who is pretty good at them. Makes my life easier.

Yes my sister in law had experience similar to an intern but on a regular basis, and when you have their previous years and they are elderly not much changes.
 

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