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Post by mnn2501 on Nov 30, 2015 23:39:42 GMT
Perhaps all of you are smarter than I am about retirement, but I just figured something out about NON-Roth IRA's and NON-Roth 401K's
The big deal was you reduce your taxable income now, save for the future and when you cash in you'll be making less so you'll probably pay less in taxes. That was how they were sold for years: A great investment and a current tax deduction.
Now The Rest of the Story.....by reducing your current taxable income you are also reducing your future Social Security benefits, since its based on what?....that's right, your taxable income.
Yeah, Uncle Sam giveth and Uncle Sam taketh away.
Guess I should have read the fine print a couple decades ago.
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Post by whereiwant2b on Dec 1, 2015 1:55:35 GMT
The tax base for FICA includes the wages put into an IRA. An IRA reduces income tax liability only. At least for wages. I'm pretty sure the same is true for the selfemployed equivalent but not really sure.
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Post by paisley on Dec 1, 2015 2:54:36 GMT
But disability policies funds paid out reduces the amount the government pays in many cases.
Be responsible self cover... decrees your personal cash flow...to spend...get tax as you earn it to pay for such a policy...reduces the funds that come from the government...
Had ss not take 6 years to declare my husband disabled per their standards.... no taxpayer would be funding my husband's disability claim... as I did have coverage ...commercial fishing is risky...and there was a minor child.... the statue to submit the claim required ss and had a three year max time to claim....
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Deleted
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Post by Deleted on Dec 2, 2015 0:55:02 GMT
If you look at a pay stub, social security taxes are based on pre-401k and HSA deductions. So you are not hurting future "SS income" by contributing. At this stage tho, does anyone think SS will actually be around in 20yrs?? I'm sure not counting on it.
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Post by mnn2501 on Dec 2, 2015 13:27:47 GMT
I looked at my SS statement straight from Uncle Sam and the SSA
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Post by farmrbrown on Dec 4, 2015 3:18:30 GMT
I looked into that because I was curious about my own retirement (years away) but I'm no tax expert. From what I could find, I think what part is exempt from the SS taxes is the EMPLOYER contributions, not the EMPLOYEE. So it shouldn't reduce your future benefits because that portion wasn't coming out of your income anyway. I could be wrong though about the Non Roth IRAs
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