All things STOCKS

[walkenvol]

Too much water isn’t good for you either. It flushes out needed stuff. I try to budget one 20/28 ounce Gator/Powerades a day.

Maybe try some of the electrolyte tablets or powders to add to some of your water or go completely natural with some coconut water/milk? Read the ingredients and decide if you really want that stuff in your body on a daily basis. Too many toxins and artificial ingredients in our food supply today that we don’t know the long term effects from. JMO as I’m not a doctor.

 

[Thunder Good-Oil]

I’ve held KO forever it seems since Buffet was always so bullish on it, but I’m thinking that money needs to find a new home. It broke $60 in February of 2020 and now it’s now bouncing in the $62-64 range with a 3% yield. I quit consuming their products 10 years back when I recognized the negative health impact it was having on me (Diet Coke). As we age especially, we sure don’t need the extra sugar of the non diet varieties due to the inflammatory effects and extra calories which didn’t bother me when I was younger. I could foresee the day where food/drink companies will have to defend themselves in court for selling unhealthy products to the American public.

What think you guys?

I have Pepsi (PEP) which is heavier into snack food than KO. It hasn’t been a great holding, but the dividend is pretty solid iirc.

The infrastructure and distribution networks for those two is peerless in US beverages. Maybe Kuerig-Dr Pepper is taking a good sized share.

They both sell water. And juices. They might figure it out.

I’ve wondered about tobacco-like litigation as well. But every food company sells lots and lots of sugar (corn sweetener). Humans can survive without tabacky. We wont survive without calories. The food industry might be too big to fail. I wish that all of the suburban lawns would be replaced with gardens and neighbors would exchange crops with each other. But the government won’t promote that - no taxes to contribute to their revenue fix.

 

[Thunder Good-Oil]

Maybe try some of the electrolyte tablets or powders to add to some of your water or go completely natural with some coconut water/milk? Read the ingredients and decide if you really want that stuff in your body on a daily basis. Too many toxins and artificial ingredients in our food supply today that we don’t know the long term effects from. JMO as I’m not a doctor.

I use coconut milk on my cereal. I can barely taste it. Don’t know if that’s just what it is or a long-term COVID after effect.

My bigger issue is staying hydrated.

 

[Go aeiou]

Do yourself a favor and stop drinking them again. Your feet , joints, and kidneys will thank you. Personally, why drink anything regularly except water, coffee, tea, and possibly milk / coconut milk? Why put extra sugar, artificial coloring, and God knows what else into your body? JMO, TIFWIW

Ha, it lasted 2 seven ounce cans.

 

[Thunder Good-Oil]

I also wonder how full we are of micro plastics from the bottles. But then again, what kind of **** is coming out of kitchen faucets?

I don’t know what the status of the connection of aluminum cans and Alzheimer’s is at this point.

Seems like everything is killing us.

 

[Thunder Good-Oil]

CMG:

$88 billion market cap

69x p/e

58x forward p/e

Zero dividend

Shares have doubled off of the 52 week low

90% institutional ownership

====================================

I’m in no hurry now to go long. The easy post COVID money has been made.

 

[Thunder Good-Oil]

Market Caps:
CMG $88 billion
SBUX $90 billion
MCD $187 billion
YUM $38 billion

 

[walkenvol]

It's funds from an inherited IRA. When my dad died a couple of years ago I received about $30,000 which I rolled into another IRA. I didn't take possession until the first of this year. It's my understanding I have to pull it out and pay taxes on it within the next 10 years. It's been sitting there making diddly for the last several months. I was looking for something to put it in hoping in the next few years it might offset the impending taxes. I only spent about a 1/3 of that on the NVDA.

I purchased some NVDA a couple of weeks ago, before the split and I've made a little on that as it's went up a few dollars.

Maybe you already know this, but you have to do more than just pull it out within 10 years. We have an inherited IRA (although we got it the year before the 10 year rule was created) and have to make annual calculations to determine the Required Minimum Distributions. Find out the IRS requirements for yours as the penalties for not adhering can be substantial

 

[Thunder Good-Oil]

Maybe you already know this, but you have to do more than just pull it out within 10 years. We have an inherited IRA (although we got it the year before the 10 year rule was created) and have to make annual calculations to determine the Required Minimum Distributions. Find out the IRS requirements for yours as the penalties for not adhering can be substantial

I really like the Roths. Convert. Pay taxes. Easily administered going forward. But I wouldn’t put it past our heavily debt burdened government to change the rules at some point.

If you can pay the taxes due with money not in the IRA, it’s almost a no brainer to convert to Roths. Exceptions are if your tax bracket will be much lower in retirement or if you plan to donate it to a charity/501(c)(3) organization. Also if you won’t be living much longer (eek!) and will soon pass it to beneficiaries. But I don’t know what the stepped up cost basis rules are with IRAs/401(k)s. I do know that the tax rules suck with variable annuities.

 

[walkenvol]

I really like the Roths. Convert. Pay taxes. Easily administered going forward. But I wouldn’t put it past our heavily debt burdened government to change the rules at some point.

If you can pay the taxes due with money not in the IRA, it’s almost a no brainer to convert to Roths. Exceptions are if your tax bracket will be much lower in retirement or if you plan to donate it to a charity/501(c)(3) organization. Also if you won’t be living much longer (eek!) and will soon pass it to beneficiaries. But I don’t know what the stepped up cost basis rules are with IRAs/401(k)s. I do know that the tax rules suck with variable annuities.

The cost basis is $0.00 as that money went into an IRA pretax and whoever inherits it picks up where you left off.

I don’t find the ROTH conversions to be a no brainer myself. If the IRA is in the $millions then the tax burden can be in the 32-37% range even if you spread the conversion over several years. You will no longer benefit from compounding growth of those dollars you gave to Uncle Sam. I’m comfortable paying the taxes now within the 12% but that will make very little dent in a substantial IRA if you have any other sources of taxable income. Maybe someone can prove mathematically how it works in the 22%, 24%, and higher brackets but every time I’ve tried to make sense of it I end up having to make a bunch of assumptions to find it a compelling option.

For reference, I’m in my early 60’s with this perspective.

 

[Thunder Good-Oil]

The cost basis is $0.00 as that money went into an IRA pretax and whoever inherits it picks up where you left off.

I don’t find the ROTH conversions to be a no brainer myself. If the IRA is in the $millions then the tax burden can be in the 32-37% range even if you spread the conversion over several years. You will no longer benefit from compounding growth of those dollars you gave to Uncle Sam. I’m comfortable paying the taxes now within the 12% but that will make very little dent in a substantial IRA if you have any other sources of taxable income. Maybe someone can prove mathematically how it works in the 22%, 24%, and higher brackets but every time I’ve tried to make sense of it I end up having to make a bunch of assumptions to find it a compelling option.

For reference, I’m in my early 60’s with this perspective.

That’s why I qualified it by saying paying the taxes with money outside of the IRA.

 

[Thunder Good-Oil]

It’s Time to Take Another Look at the Stepped-Up Basis Rules | Insight on Estate Planning

Thanks to a generous federal gift and estate tax exemption amount only the wealthiest of families are exposed to estate tax liability. For many, this means that estate planning now has a stronger focus on income tax planning.

www.apslaw.com

​

Stepped-up basis rules​

When assets are passed to the younger generation through inheritance, there are no income tax implications until the assets are sold. For these purposes, the basis for calculating gain is “stepped up” to the value of the assets on the date of death. Thus, only the appreciation in value since the individual inherited the assets is subject to tax. The appreciation during the deceased’s lifetime goes untaxed.

Assets affected by the stepped-up basis rules include securities, artwork, bank accounts, business interests, investment accounts, real estate and personal property. However, these rules don’t apply to retirement assets such as 401(k) plans or IRAs.

To illustrate the benefits, let’s look at a simplified example. Alan bought XYZ Corp. stock 10 years ago for $100,000. In his will, he leaves all the XYZ stock to his daughter, Barbara. When Alan dies, the stock is worth $500,000. Barbara’s basis is stepped up to $500,000.

When Barbara sells the stock two years later, it’s worth $700,000. Thus, she must pay a maximum 20% rate on her long-term capital gain. On these facts, Barbara has a $200,000 gain. With the 20% capital gains rate, she owes $40,000. Without the stepped-up basis, her tax on the $600,000 gain would be $120,000.

What happens if an asset declines in value after the deceased acquired it? The adjusted basis of the individual who inherits the assets is still the value on the date of death. This could result in a taxable gain on a subsequent sale if the value rebounds after death or a loss if the value continues to decline.

 

[walkenvol]

A non stock question I’m wrestling with right now is finding concrete information on strategies for Social Security for a married couple as I read too much conflicting information on the topic. Maybe someone on here has recently dealt with this? I know many of the strategies were eliminated a few years back, but I’m wondering if I chose to defer starting my SS till 67-70 range, can my spouse start drawing now on her own earned benefit and when I start my benefit does she still become eligible for my spousal benefit?

I’ve found an article on Vanguard showing this as a valid option and have found it as an example on the SS website. I called SS and the random clerk who picked up my call indicated that was no longer an option? What say ye guys? TIA

 

[walkenvol]

That’s why I qualified it by saying paying the taxes with money outside of the IRA.

My money is still gone from me regardless of which bucket I get it from?

 

[Thunder Good-Oil]

The best tax advantaged rule is the stepped up cost basis. Somebody that can find and hold a great investment FOREVER puts tgeir heirs in a great position. And the government gets nothing. I’m sure that one party wants to take the stepped up cost basis rule away from average citizens.

No doubt it gets framed as benefiting the wealthy that aren’t paying their fair share of taxes. That group of elites prey on the uninformed, financially ignorant, envious of success voters. What’s ignored are the benefits of providing the capital by owning equities for the growth of jobs and the economy. Don’t get me started egg me on.

 

[Go aeiou]

The cost basis is $0.00 as that money went into an IRA pretax and whoever inherits it picks up where you left off.

I don’t find the ROTH conversions to be a no brainer myself. If the IRA is in the $millions then the tax burden can be in the 32-37% range even if you spread the conversion over several years. You will no longer benefit from compounding growth of those dollars you gave to Uncle Sam. I’m comfortable paying the taxes now within the 12% but that will make very little dent in a substantial IRA if you have any other sources of taxable income. Maybe someone can prove mathematically how it works in the 22%, 24%, and higher brackets but every time I’ve tried to make sense of it I end up having to make a bunch of assumptions to find it a compelling option.

For reference, I’m in my early 60’s with this perspective.

What if income tax rates increase? Paying 22, 24% might look prudent if that happens.
Of course tax rates are mostly political. Getting reelected is what counts. Not about fairness, deficits, etc.
I'm in 70s , and I've been surprised how little income tax I pay. I made a $30k conversion from a SEP-IRA to a Roth last year,

In the mid 80s I worked on contingent fees. I had a large fee due from a client, and I asked them to hold off writing me a check until the new year so i would pay only 50% instead of 60% income tax. They consulted with their legal dept and agreed.
Convert as much annually as you want until you hit the highest acceptable tax bracket.
When you have to start taking withdrawals(age 73 now) the first one will be around 4%. It goes up each year after that.
There are tables showing how much you have to draw.

 

[Thunder Good-Oil]

A non stock question I’m wrestling with right now is finding concrete information on strategies for Social Security for a married couple as I read too much conflicting information on the topic. Maybe someone on here has recently dealt with this? I know many of the strategies were eliminated a few years back, but I’m wondering if I chose to defer starting my SS till 67-70 range, can my spouse start drawing now on her own earned benefit and when I start my benefit does she still become eligible for my spousal benefit?

I’ve found an article on Vanguard showing this as a valid option and have found it as an example on the SS website. I called SS and the random clerk who picked up my call indicated that was no longer an option? What say ye guys? TIA

I’ve been watching YouTubes on when to start taking SS. But they’re all over the place. Single versus married and continuing to work after electing to start taking benefits make the options even more complicated.

A couple of takeaways I’ve learned:

I used to think what is the point of the full benefits age (67 for everybody born in 1960 or later)? But there are at least 2 uses of the FBA in the calculations. If working while taking SS benefits BEFORE 67 then there is a substantial hit to the worker on their taxes. Also, taking the SS benefits before 67 reduces the payments by 6% per year but AFTER age 67 then the INCREASE in benefits is 8% per year. So if starting at age 62 the payments are reduced by 30% (5 years). Waiting until 70 increases the benefits by 24% (3years).

There is no reason at all waiting until after age 70 to begin taking SS payments. Everybody needs to start taking benefits no later than when they turn 70. Otherwise you are donating your money to the government.

You do not have to wait until an annual birthday anniversary. The calculations are adjusted EVERY month. So taking benefits early is a 0.5% reduction each month. Delaying taking benefits after age 67 increases benefits by 0.67% per month.

The break even for waiting until age 70 is somewhere in your mid 70s. If you’re going to live into your 80s, 90s, and beyond then the formula suggests to wait. If you won’t live long, start taking SS ASAP.
=====================
Boomers born before 1960 need to consider the scenarios with a full retirement age to be less than 67.

Brokers and other advisors have calculators available to asses each individuals situation.

 

[Thunder Good-Oil]

What if income tax rates increase? Paying 22, 24% might look prudent if that happens.
Of course tax rates are mostly political. Getting reelected is what counts. Not about fairness, deficits, etc.
I'm in 70s , and I've been surprised how little income tax I pay. I made a $30k conversion from a SEP-IRA to a Roth last year,

In the mid 80s I worked on contingent fees. I had a large fee due from a client, and I asked them to hold off writing me a check until the new year so i would pay only 50% instead of 60% income tax. They consulted with their legal dept and agreed.

Rising tax rates are certainly a concern. Especially with the national debt approaching $35 trillion. Also, Social Security benefits could be cut by up to about 30% since the retiree population is growing faster than the worker population. Worst case scenario is probably that SS becomes a pay as you go plan. Whatever is collected from wages is distributed to the retirees.

It’s nauseating that the government has taken 6.2% x 2 (12.4%) of wages and there’s so little left to pay back to the retirees. The cap for high wage earners doesn’t seem right to me. I’d reckon that that is why they don’t call it a tax. It’s absolutely a regressive tax on the lower end worker. People earning $10k/year (in wages) pay a rate of 6.2%. People earning $1,000,000 pay what? 1% or 2%? The Medicare tax of 1.45% (2.9%) has no cap.

 

[Thunder Good-Oil]

My money is still gone from me regardless of which bucket I get it from?

But the compounding is super if using money from outside of the IRA to pay the taxes.

 

[InVOLuntary]

The reason I delayed taking and paying taxes on the inherited IRA was projecting a lower income, maybe a lower tax bracket. My wife retired this year and I'm itching to as well.

One thing I was wondering is does the 10 year clock start when your loved one passes or does it start when you take possession? I delayed taking possession for two years with that thought without knowing for sure. I didn't take possession until January of this year so I guess I'll find out when my accountant does my 2024 taxes.

 

[walkenvol]

Rising tax rates are certainly a concern. Especially with the national debt approaching $35 trillion. Also, Social Security benefits could be cut by up to about 30% since the retiree population is growing faster than the worker population. Worst case scenario is probably that SS becomes a pay as you go plan. Whatever is collected from wages is distributed to the retirees.

It’s nauseating that the government has taken 6.2% x 2 (12.4%) of wages and there’s so little left to pay back to the retirees. The cap for high wage earners doesn’t seem right to me. I’d reckon that that is why they don’t call it a tax. It’s absolutely a regressive tax on the lower end worker. People earning $10k/year (in wages) pay a rate of 6.2%. People earning $1,000,000 pay what? 1% or 2%? The Medicare tax of 1.45% (2.9%) has no cap.

Without doing a deep dive into the SS payouts as a whole, what strikes me as the problem is paying folks who have not earned a benefit via their contributions. This includes spousal benefits, disability benefits and minor children benefits. Do the math and only pay folks who have contributed. Provide the option similar to traditional pension plans to take a slightly reduced payout if you desire a survivor payment for your spouse.

I’m convinced that the biggest motivation for same sex marriages are to allow one of the couple to draw spousal benefits from retirement and medical plans. Why would I give any emotional energy to forcing someone to validate my union with another adult unless there was a financial benefit from doing so? I don’t care what anybody else in this world thinks of me and my wife’s union and I’m heterosexual. Why would a homosexual care what any heterosexual folks think of their partner choice? I’ve never walked in their shoes with those urges and doubt I’ll start getting them in my graying years.

 

[Thunder Good-Oil]

The reason I delayed taking and paying taxes on the inherited IRA was projecting a lower income, maybe a lower tax bracket. My wife retired this year and I'm itching to as well.

One thing I was wondering is does the 10 year clock start when your loved one passes or does it start when you take possession? I delayed taking possession for two years with that thought without knowing for sure. I didn't take possession until January of this year so I guess I'll find out when my accountant does my 2024 taxes.

I can’t decide. And then they make the choice even more difficult by upping that annual increase from 6% to 8% after age 67.

If high investment returns were a guarantee then starting ASAP makes the most sense. Build up a big enough account value before starting to take benefits and the returns could more than offset the extra payments available by waiting.

 

[walkenvol]

The reason I delayed taking and paying taxes on the inherited IRA was projecting a lower income, maybe a lower tax bracket. My wife retired this year and I'm itching to as well.

One thing I was wondering is does the 10 year clock start when your loved one passes or does it start when you take possession? I delayed taking possession for two years with that thought without knowing for sure. I didn't take possession until January of this year so I guess I'll find out when my accountant does my 2024 taxes.

That’s an interesting question that I don’t know the answer to but can ask my broker who handled ours if you can’t find an answer. Personally, I’d start my clock when the estate put the account into my name and then argue with the IRS if they said I couldn’t. Of course this would assume the estate took RMD’s during the 2 year period between death and probate completion.

 

[InVOLuntary]

That’s an interesting question that I don’t know the answer to but can ask my broker who handled ours if you can’t find an answer. Personally, I’d start my clock when the estate put the account into my name and then argue with the IRS if they said I couldn’t. Of course this would assume the estate took RMD’s during the 2 year period between death and probate completion.

We had a trust. I have a younger brother by 4 years and a younger sister by 12 years. My sister took hers and paid the taxes. My brother took his and rolled it into an inherited IRA account with his broker to defer the taxes. I purposely didn't take mine for two years, the maximum allowed by MetLife, the holder of the IRA. My 1/3 stayed with metlife in my dad's name for the 2 years.

 

[Thunder Good-Oil]

Without doing a deep dive into the SS payouts as a whole, what strikes me as the problem is paying folks who have not earned a benefit via their contributions. This includes spousal benefits, disability benefits and minor children benefits. Do the math and only pay folks who have contributed. Provide the option similar to traditional pension plans to take a slightly reduced payout if you desire a survivor payment for your spouse.

I’m convinced that the biggest motivation for same sex marriages are to allow one of the couple to draw spousal benefits from retirement and medical plans. Why would I give any emotional energy to forcing someone to validate my union with another adult unless there was a financial benefit from doing so? I don’t care what anybody else in this world thinks of me and my wife’s union and I’m heterosexual. Why would a homosexual care what any heterosexual folks think of their partner choice? I’ve never walked in their shoes with those urges and doubt I’ll start getting them in my graying years.

There’s a Social Security thread in (I think) the Politics Forum that does a lot of deep diving into who is entitled to collect SS payments. It’s why I refuse to follow the government’s narrative that SS withholdings from paychecks isn’t a tax.

At the beginning none of the retirees contributed. Giving benefits to immigrants (especially illegal immigrants) is pretty much an unfair handout. I think that there are a couple of distinct trust funds though. Retiree and survivor/disabled benefits. It’s a tax. EVERYBODY should pay the 6.2% on ALL of their wages.

I prefer to stay on the investment related discussion here. But I go into the political rabbit hole now and then.