Paper gains are not taxed. Only when you sell them and realize the gain is tax due, and then only on the net realized gains, that is realized gains minus realized losses.
Tom NJ
Tom NJ
Many baby boomers have little saved for retirement
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Originally Posted By: hattaresguy
... My ideal lifestyle which I'm working towards involves a condo in CT, a fairly large house with acreage in NH, and a house/condo either in FL or NC. I also want a boat large enough to be able to move with the seasons. Hatt 55 maybe?...
Bertram 58 over a Hatt 55. Or even an Egg Harbour
... My ideal lifestyle which I'm working towards involves a condo in CT, a fairly large house with acreage in NH, and a house/condo either in FL or NC. I also want a boat large enough to be able to move with the seasons. Hatt 55 maybe?...
Bertram 58 over a Hatt 55. Or even an Egg Harbour
Originally Posted By: Tom NJ
Paper gains are not taxed. Only when you sell them and realize the gain is tax due, and then only on the net realized gains, that is realized gains minus realized losses.
Tom NJ
With reinvested dividends in the mutual fund, you get taxed on the paper gains. This is because the mutual fund itself sells the securities to cover for the people who take the distribution from the mutual funds. Ironically, when the market does not do well, people panic and starts taking money out causing the mutual funds to declare dividends and capital gains.
If the NAV of your mutual fund was $10 yesterday and if it declares dividend of $2 today; the NAV becomes $8. If you re-invest your dividends, your account total in dollar value still remains the same. But you owe uncle sam taxes on $2 immediately. It does not matter if the NAV last year was $15 either!
So smart people invest in stock or indexed mutual funds or better have the investment in tax deferred account. Some of us were not that smart :-(
Paper gains are not taxed. Only when you sell them and realize the gain is tax due, and then only on the net realized gains, that is realized gains minus realized losses.
Tom NJ
With reinvested dividends in the mutual fund, you get taxed on the paper gains. This is because the mutual fund itself sells the securities to cover for the people who take the distribution from the mutual funds. Ironically, when the market does not do well, people panic and starts taking money out causing the mutual funds to declare dividends and capital gains.
If the NAV of your mutual fund was $10 yesterday and if it declares dividend of $2 today; the NAV becomes $8. If you re-invest your dividends, your account total in dollar value still remains the same. But you owe uncle sam taxes on $2 immediately. It does not matter if the NAV last year was $15 either!
So smart people invest in stock or indexed mutual funds or better have the investment in tax deferred account. Some of us were not that smart :-(
Originally Posted By: Vikas
Then every year you will have pleasure of sending a huge I_Love_You to uncle sam on Apr 15 for those capital gains and dividends on your mutual funds :-( Worse things is that those are all paper gains and you get taxed on them :-(
Not realized inside a 401(k) or IRA until you take distribution.
Then every year you will have pleasure of sending a huge I_Love_You to uncle sam on Apr 15 for those capital gains and dividends on your mutual funds :-( Worse things is that those are all paper gains and you get taxed on them :-(
Not realized inside a 401(k) or IRA until you take distribution.
Originally Posted By: Vikas
I said taxable account aka outside 401k or IRA.
Later in the thread, but not in what I quoted.
I said taxable account aka outside 401k or IRA.
Later in the thread, but not in what I quoted.
I put 16% into my TSP and my employer matches the first 5%. I also will get a pension and a Social Security supplement. Last time I checked I had around $235,000 in my TSP. I can retire in Sept. of 16 at age 49 and am mandatory retired out at age 57.
I got divorced in 2004 and lost 65% of my TSP balance so I basically had to start all over. I do have my house paid off but have a car and ATV loan. I also pay child support for two kids until my youngest is 21 which will be in four years. My oldest child will drop off in a little over a year.
I don't feel like I have or will have enough for retirement at this point even though my total debt is only around $25,000 at this point. I plan on probably not retiring until the mandatory age of 57 and up my TSP contribution amount as my Child support drops off. Maybe with this plan, I can live decently in retirement.
Wayne
I got divorced in 2004 and lost 65% of my TSP balance so I basically had to start all over. I do have my house paid off but have a car and ATV loan. I also pay child support for two kids until my youngest is 21 which will be in four years. My oldest child will drop off in a little over a year.
I don't feel like I have or will have enough for retirement at this point even though my total debt is only around $25,000 at this point. I plan on probably not retiring until the mandatory age of 57 and up my TSP contribution amount as my Child support drops off. Maybe with this plan, I can live decently in retirement.
Wayne
I can retire at age 59.5 no problem, but depending on how things are going...
I might stay working just to stay busy, with 6 weeks of vacation per year I get antsy if I have too much down time.
I might stay working just to stay busy, with 6 weeks of vacation per year I get antsy if I have too much down time.
Originally Posted By: Vikas
Originally Posted By: Tom NJ
Paper gains are not taxed. Only when you sell them and realize the gain is tax due, and then only on the net realized gains, that is realized gains minus realized losses.
Tom NJ
With reinvested dividends in the mutual fund, you get taxed on the paper gains. This is because the mutual fund itself sells the securities to cover for the people who take the distribution from the mutual funds. Ironically, when the market does not do well, people panic and starts taking money out causing the mutual funds to declare dividends and capital gains.
If the NAV of your mutual fund was $10 yesterday and if it declares dividend of $2 today; the NAV becomes $8. If you re-invest your dividends, your account total in dollar value still remains the same. But you owe uncle sam taxes on $2 immediately. It does not matter if the NAV last year was $15 either!
So smart people invest in stock or indexed mutual funds or better have the investment in tax deferred account. Some of us were not that smart :-(
Yes you are correct that distributions are a taxable event, and if reinvested they are a paper gain. I am retired so I take my distributions.
Tom NJ
Originally Posted By: Tom NJ
Paper gains are not taxed. Only when you sell them and realize the gain is tax due, and then only on the net realized gains, that is realized gains minus realized losses.
Tom NJ
With reinvested dividends in the mutual fund, you get taxed on the paper gains. This is because the mutual fund itself sells the securities to cover for the people who take the distribution from the mutual funds. Ironically, when the market does not do well, people panic and starts taking money out causing the mutual funds to declare dividends and capital gains.
If the NAV of your mutual fund was $10 yesterday and if it declares dividend of $2 today; the NAV becomes $8. If you re-invest your dividends, your account total in dollar value still remains the same. But you owe uncle sam taxes on $2 immediately. It does not matter if the NAV last year was $15 either!
So smart people invest in stock or indexed mutual funds or better have the investment in tax deferred account. Some of us were not that smart :-(
Yes you are correct that distributions are a taxable event, and if reinvested they are a paper gain. I am retired so I take my distributions.
Tom NJ
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