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, I was thinking of doing the exact same thing...assholes. So now what have you decided? Bite the bullet or keep them there and ride the wave?

I’m going to do some math and look at my income. I might take 1/3 out ~$3k in taxes. I’m trying to stay objective but it’s tough to pay that bill.

It might be easier to pay the money vs watch a 10% correction wipe out gains.

I’m not sure my long term strategy. Never thought of this stuff when I started 18 years ago.

That’s why I’m asking you f—-ers


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12 hours ago, di1630 said:


I’m going to do some math and look at my income. I might take 1/3 out ~$3k in taxes. I’m trying to stay objective but it’s tough to pay that bill.

It might be easier to pay the money vs watch a 10% correction wipe out gains.

I’m not sure my long term strategy. Never thought of this stuff when I started 18 years ago.

That’s why I’m asking you f—-ers


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Unless you actually need the money now, you're better off just holding on and riding the wave. Many studies show that buy-and-hold outperforms market timing >69% of the time.

Think about it this way - let's say you sell today and there is a 10% correction immediately after that. If you sell and pay $9k in taxes, you're left with $91k. If you hold and eat a 10% dip, you're sitting at $90k... virtually identical scenarios. On the other hand, if you sell now and the market goes up another 10%, you're talking about the difference between $91k and $110k and you're going to be kicking yourself. 

Couple that with the fact that the market tends to rise over time, and holding starts to look even better. Short term losses and gains are almost impossible to predict, but macro performance in the long- to very long-term is actually pretty easy: the market's going to go up, and the longer you hold on, the better your odds are of capturing that return.

Here's another example. Let's say you're 35-40 right now and don't need the money right away, so you're looking at a 30-year horizon for your investments. What are the odds that the market will rise over the course of those 30 years? Obviously there aren't any guarantees about the future, but if you use the past as a guide, you would say virtually 100%. If you look at the performance of the S&P 500 over the past century, and try to pick the absolute worst time to invest (at the market peak immediately prior to the Great Depression) with a 30-year horizon, you're still looking at about an 8% annual return over that time period.

If you let short-term fear and emotions rule out, you might get lucky here and there, but the odds aren't in your favor when you're betting against that kind of long-term macroeconomic trend. Hold on long enough though, and you're almost guaranteed to win.

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On 7/17/2019 at 12:35 PM, di1630 said:


I’m going to do some math and look at my income. I might take 1/3 out ~$3k in taxes. I’m trying to stay objective but it’s tough to pay that bill.

It might be easier to pay the money vs watch a 10% correction wipe out gains.

I’m not sure my long term strategy. Never thought of this stuff when I started 18 years ago.

That’s why I’m asking you f—-ers


Sent from my iPhone using Baseops Network mobile app

Check your state as well, some states (NY and CA I know for sure) tax all capital gains as income. So you get nailed for the full state tax rate on top of your federal capital gains taxes.

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On 8/1/2019 at 12:33 PM, Royal said:

Boys, has anyone here had any success or messed with real estate crowdfunding? The research I've done has come up a bit short.

People I know have used Fundrise and one other and been happy. But it's all bull market investing so far and I tend to be skeptical. There are lots of professionals in real estate, there are lots of banks and non-bank lenders with money they will lend against quality projects. I don't see how there isn't a massive adverse selection problem with these crowdfunding systems. If the real estate was really that attractive why do they need to crowdsource it? It's not like this is a niche area of the market where traditional lenders won't lend money so you have to get creative. There is a multi-hundred billion dollar industry built around real estate development, renovating, leasing. I want to see how well all the rosy projections from these companies survive the next recession. If you wanted to sell me on crowdfunding in 2009 when nobody wanted to lend to anybody for anything it might be a different story but with $17 Trillion of negative yielding debt around the world you have a tough time convincing me that in today's market getting funding is holding back any sort of capital investment plan.

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Something to watch; Anyone still holding oil related energy Stocks/Funds/ETF's/etc may get a rare opportunity to take some profits in the coming days/weeks. This might be somewhat entertaining but I doubt oil will hit $100/bbl.

"Saudi Attacks Raise Spectre Of Oil At $100/bbl" 

https://www.hartenergy.com/news/saudi-attacks-raise-spectre-oil-100bbl-182765 

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BLUF:  What is the actual mechanism for investing the full $57,000 in TSP while deployed to a tax free combat zone?

I haven't gone on a long deployment in a while, but am deploying on a 365 to Iraq this summer and will get the combat zone tax exclusion up to the max enlisted pay each month ($7,700).  That's $46,200 for the final 6 months of the year.  However, the TSP site says I can contribute $57,000 to TSP while deployed, which would enable me to go past the cap.  It specifies I could do $19,500 in ROTH TSP, but the remainder would have to be Traditional TSP. 

So, what's the actual mechanism to be able to invest more than $19,500 in Traditional TSP?  Normally if you try to invest more than $19,500 it won't deduct from your LES.  Are DFAS and MyPay smart enough to know and let me do it?  Or is this something I have to organize with the deployed finance folks?

Thanks, Pajaro

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BLUF:  What is the actual mechanism for investing the full $57,000 in TSP while deployed to a tax free combat zone?
I haven't gone on a long deployment in a while, but am deploying on a 365 to Iraq this summer and will get the combat zone tax exclusion up to the max enlisted pay each month ($7,700).  That's $46,200 for the final 6 months of the year.  However, the TSP site says I can contribute $57,000 to TSP while deployed, which would enable me to go past the cap.  It specifies I could do $19,500 in ROTH TSP, but the remainder would have to be Traditional TSP. 
So, what's the actual mechanism to be able to invest more than $19,500 in Traditional TSP?  Normally if you try to invest more than $19,500 it won't deduct from your LES.  Are DFAS and MyPay smart enough to know and let me do it?  Or is this something I have to organize with the deployed finance folks?
Thanks, Pajaro
Deployed finance was a bit confused when I asked, but eventually figured it out. It seems to be tied to CZTE being processed, which then allows you to go above, but like you said only for traditional. I had timed my contributions to stay below 19k until a month into my deployment, and contributed above 19k after ctze started
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22 hours ago, Pajaro said:

BLUF:  What is the actual mechanism for investing the full $57,000 in TSP while deployed to a tax free combat zone?

I haven't gone on a long deployment in a while, but am deploying on a 365 to Iraq this summer and will get the combat zone tax exclusion up to the max enlisted pay each month ($7,700).  That's $46,200 for the final 6 months of the year.  However, the TSP site says I can contribute $57,000 to TSP while deployed, which would enable me to go past the cap.  It specifies I could do $19,500 in ROTH TSP, but the remainder would have to be Traditional TSP. 

So, what's the actual mechanism to be able to invest more than $19,500 in Traditional TSP?  Normally if you try to invest more than $19,500 it won't deduct from your LES.  Are DFAS and MyPay smart enough to know and let me do it?  Or is this something I have to organize with the deployed finance folks?

Thanks, Pajaro

My recommendation would be to do everything you can to max out your Roth TSP while your home-station. DFAS limits Roth TSP contributions at 65% since they don't know your in a combat zone and leave some of your pay for taxes. Once you start getting the CZTE then max out the Traditional to as high as you can muster (I did 100%). These will be noted under the "TSP Exempt" section of your LES. Once keep the high Traditional TSP the entire deployment and only switch back to the Roth once you get back home. This way you will have as much in the TSP tax free as you can.

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On 12/10/2019 at 10:35 AM, jazzdude said:
On 12/9/2019 at 9:28 PM, Pajaro said:
BLUF:  What is the actual mechanism for investing the full $57,000 in TSP while deployed to a tax free combat zone?
I haven't gone on a long deployment in a while, but am deploying on a 365 to Iraq this summer and will get the combat zone tax exclusion up to the max enlisted pay each month ($7,700).  That's $46,200 for the final 6 months of the year.  However, the TSP site says I can contribute $57,000 to TSP while deployed, which would enable me to go past the cap.  It specifies I could do $19,500 in ROTH TSP, but the remainder would have to be Traditional TSP. 
So, what's the actual mechanism to be able to invest more than $19,500 in Traditional TSP?  Normally if you try to invest more than $19,500 it won't deduct from your LES.  Are DFAS and MyPay smart enough to know and let me do it?  Or is this something I have to organize with the deployed finance folks?
Thanks, Pajaro

Deployed finance was a bit confused when I asked, but eventually figured it out. It seems to be tied to CZTE being processed, which then allows you to go above, but like you said only for traditional. I had timed my contributions to stay below 19k until a month into my deployment, and contributed above 19k after ctze started

 

On 12/10/2019 at 10:40 AM, JBueno said:

It takes some care and feeding but Doug has a good explanation on his website.

https://the-military-guide.com/maximizing-your-thrift-savings-plan-contributions-in-a-combat-zone/

 

 

21 hours ago, Breckey said:

My recommendation would be to do everything you can to max out your Roth TSP while your home-station. DFAS limits Roth TSP contributions at 65% since they don't know your in a combat zone and leave some of your pay for taxes. Once you start getting the CZTE then max out the Traditional to as high as you can muster (I did 100%). These will be noted under the "TSP Exempt" section of your LES. Once keep the high Traditional TSP the entire deployment and only switch back to the Roth once you get back home. This way you will have as much in the TSP tax free as you can.

Folks, this is the exact gouge I was looking for!  Thanks for the help.  

The rest of my plan is to sell some funds to generate capital gains.  With the new 2020 standard deduction for Married Filing Jointly ($24,800) and $37,500 in traditional TSP, my taxable income will be about $62,000.  Next year's new upper income limit to pay 0% capital gains tax is $80,000, so I can have $18,000 in capital gains without paying tax.

Thanks again, Pajaro

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16 minutes ago, HossHarris said:

Is that 18k still taxable as income?

Not if it’s a long term capital gain. Different tax rates for W-2 income and LTCG.  The technique is called tax gain harvesting.  Wise move.

i tried to do it the year I left AD.  Then I ended up with an unexpected temp tech job (I.e. with few of the AD tax shelters) and got hammered the following April. 
 

Pajaro’s income forecast is probably more accurate than mine was.

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On 12/11/2019 at 5:28 PM, HossHarris said:

Is that 18k still taxable as income?

Nunya answered this, but note that short term capital gains are taxed at the same rate as normal W-2 income.  I will be selling index funds I bought as a lieutenant 2 decades ago.  

I could also reduce my taxable income by another $29,500 if I invest that much in traditional IRA and traditional TSP next year.  I thought about it, but it would save me only $4,500 in taxes (15% of $29,500).  I figured that the tax free growth of the ROTH IRA and ROTH TSP would pretty easily outweigh the $4,500 in tax savings.

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