Should You Delay Social Security Benefits? [View instapost]
C:
Don't ignore the fact that depending on your income, SS benefits are taxable. If you are drawing SS and still working at age 62, you will have up to 85% of your benefit be taxed. There is a 15% exclusion to Federal taxes.
Should You Delay Social Security Benefits? [View instapost]
I found this article the other day. While I haven't completely digested the strategy, I do fall into that category of people who have a portfolio that is within the range discussed in this article.
One thing that I am aware of is the impact of delaying SS benefits. For me, being 64, I could have begun taking SS at age 62. My full retirement age is 66.
At age 62, I would have received a SS benefit which would have been around $1800 a month, based on my contribution history and the formula that SS uses. However, by waiting to collect Social Security, my benefit increases each year until age 70, when the maximum benefit is "earned."
Now, at age 70, I would draw a little over $3000 a month. That is quite a difference from the benefit at age 62. Now, since my wife works and has just gotten a major promotion in her career, out income with her working and me working will go up significantly next year.
That being the case, working the additional two years (until I reach 66) would make sense as we would be able to continue funding our retirement accounts with the new money from her raise. That would allow us to shelter the increase in her income from current taxation, put that money into tax deferred accounts and we would not miss a beat with our life-style as our take home income would remain consistent with this year's income.
Now, at age 66, I could begin to draw dividend income from my retirement accounts to supplement our household income; we would back off on contributions of her raise to my retirement accounts, but continue to fund hers at an accelerated rate; I would hold off on drawing SS and allow my own retirement accounts to continue gathering dividend income that is being reinvested back into my holdings.
There would be no RMD for my accounts until reaching age 70 1/2 which is ok. What I could do is take the RMD to satisfy the tax man, have the $3000 a month in SS benefits, and then take money from the RMD that I don't need and channel that back into my wife's Roth and or to my children's Roth accounts to have theirs be fully funded each year.
Anyway, going to have to sit down with the CPA and the attorney to determine what is the best course of action, but for now, I am leaning toward the delaying of SS benefits until age 70.
Don't know if you are addressing me. You didn't say "@" so I will assume.
I wasn't supporting or criticising the author of the story. I was addressing your statement: "give the employees a raise."
I was trying to educate you about the convenience store business model.
Now if this guy owns a bunch of stores, and he leases them out to others who operate them, then he can't give anyone a raise, because the guys leasing the stores are the ones who hire and pay the employee.
What happens is that the guy who owned the store in the first place sees that life is simpler and more profitable if he rents the store to some other schmuck (hey, I'm half Jewish) to run it. That way, he owns the store, gets rent, and none of the hassles of running it. The guy leasing the store is the one who just bought a minimum wage job.
I've been working with convenience stores since 1984 and am very versed in their business model--because that's my job and what I do for a living. I sell food service solutions to convenience stores--I have to know their business in order to have any credibility with the owners.
But, whatever. You don't need to take things so personally. It's just a blog site, after all is said and done.
Where I get frustrated is when people play the victim card. Hey life is about being born and then dying. What you do with things between those two points is really up to you as an individual.
I have three kids. They have been taught to not have a lazy bone in their bodies. I have three kids that are all very much capitalists who have money, invest their money and it doesn't matter if we what politicians do.
My CPA and my estate lawyer are gifted folks that can figure out how to take advantage of every opportunity and avoid taxes. That's what I pay them to do and they earn every penny.
I'm not offended at all. I was pointing out that the politics of the country are somewhat irrelevant to the process of making money and having a better life.
My cattle business is very prosperous and I have to jump through all kinds of hoops with the government to raise cattle for resale to market. That's a price of doing business. If and when the cost of doing business exceeds my profitablitity, I will find something else to do that interests me.
Everyone needs to do the same thing, in my humble opinion. Find an opportunity, invest in that opportunity and make money. The opportunity is all over the place.
My son started cutting lawns back when he was in high school to make money. Now he has a landscapping business that grosses almost 500k a year and employs six people. He is branching out into growing his own plants for resale (commercial nursury) and that business already has contracts with Home Depot and Lowe's.
Cha-ching.
As for politicians. They exist for one purpose. Power. Doesn't matter what side of the table where they sit. They are just driven by ego and greed. I won't let them stand in the way of my making money, plain and simple.
Most of the stores I work with have very sophisticated inventory management systems. I actually have one guy that put in a scanner system and he was showing it to me. He told me that one Wednesday, for example, he sold 100 newspapers.
He has inventory entered into the system and every time a item is scanned, it depletes the inventory. When new product comes in, it's scanned and added to the inventory.
When he does an audit, he can tell how much shrinkage he has. He does that at the end of each month with---scanners.
Employee theft is a built in cost factor for most stores. We take steps to prevent employee theft, but it's going to happen, for a number of reasons.
Some people think that they are being screwed by the store owner because they are not making a lot of money. Some people thing that the store owner is some rich guy who deserves to be stolen from, since "he can afford it."
The average non-chain convenience store has inside sales in the neighborhood of $60k a month. That's gross income minus gasoline, which they do not make any money on.
Now out of that $60k of revenue, they need to pay labor, fringe benefits, rent, utilities, replenishment of inventory, taxes, and license fees.
When all is said and done, the store might be keeping 5-10% of that 60k as "profit." At 10%, that means that the owner might have $72 grand at the end of the year. Now if he uses that for income, then there is no money to reinvest in capital improvents like expanding the store, putting in new gas pumps, increasing the beverage cooler size, or in to maintenence like replacing the roof, replacing air conditioning and heating equipment, or adding food service.
If he keeps the money as wages, then there's federal and state taxes to pay, social security and medicare taxes (both employer and employee parts), and that doesn't leave a lot.
Basically, the guy or gal who owns one store is working for minimum wage by the time all is said and done.
I am of the opinion that more people can find a reason NOT to own a stock than they can find reasons TO own it.
Look at a company like GE. People hate Immelt, so they won't buy GE. I loaded up the truck when it was selling under $15 a share. I don't give a rat about Immelt. What I like is the fact that the company is changing direction and focusing on core products. It was a steal under $15.
WFC and JPM are two companies that I have invested heavily in. While they are not considered DG stocks at this point in time, they were priced at a value to worth back in 2011. I bought JPM under $30 a share and WFC under $25. Why? Because they were priced at incredible bargain pricing.
But people HATE the banks. What evil people, what terrible business models etc. etc.
I look at it this way. I am in the stock market for two reasons--same as I am in the real estate and cattle producing markets--to make money.
I don't care who's the CEO is or what kind of a guy he is. It's the managers of the various divisions that are running the company. With tobacco? Hey, as a former smoker, I can appreciate the dynamics of their business. They make a ton of money, pay out dividends that are fantastic, have a history of paying those dividends and I will invest there for my basic goal--making money with my money.
I'm not sure where they are going, but they are going. I think that a lot of the newer folks coming here to comment (look at their comment count) have come here from Yahoo boards and other places and they add nothing to the conversation. Instead the level of snarky comments about government, socialism, right wing, left wing, conspiracy theories about big business and big banks, etc. etc. have helped to turn this site into something that has been rapidly deteriorating.
I don't submit articles anymore. I am tired of having them being rejected because they are "more like personal finance atricles and our readers are more sophisticated than that" editorial comments.
Instead I am using the blog provided as I can write about things that are important to me and not have to manufacture charts and graphs to make a point--especially when no one seems to be reading anything other than the headline and commenting on that.
But I've found that many of the old stalwarts have all but gone silent and instead this site is being visited by people who have little or no understanding about how markets work or how to go about successful investing.
I comment, because I like to challenge some of the comments that are coming into the discussion--but most of my responses are being deleted as offensive.
Meanwhile the original offensive comment remains in place.
I've also noted that a few old timers are beginning to major in the minors. One in particular has gotten a bug about "earnings." and uses every opportunity to point out how the article is "flawed."
Anyway, this is what I know. I've made a lot of money investing in stocks over the last 30 years. My portfolio has grown exponentially in value and in dividend income.
Is it because of a bull market? Not really. I've been investing in bull markets and bear markets. I buy quality and I accumulate shares in much the same way that a mutual fund manager or any other professional manager does.
When someone like Buffet or Yacktman purchase stock in a particular company and then adds to their position, they are averaging up because they believe that even at the higher price of investing today, they can and will make money.
Yet that notion of buying stocks at current prices is ridiculed, because "we are at all time highs!" Well, here's a news flash. Three years ago, people were saying the same thing.
Money sitting in your pocket is earning nothing. Having a substantial sum of money parked on the sidelines is money that is not working for you. When you own a particular stock at a $30 cost basis and that same stock is selling today at $60 a share and the earnings continue to grow and the metrics for that company are still good, purchasing additional shares will serve you well.
Frontier Communications - A Light At The End Of The Tunnel [View article]
Gibson was just psycho. He'd look at you and telegraph that he was going to put it high and inside and he did. When you looked back at him with a "WTF" expression, he would turn around, tap the ball into his glove, turn to face home plate, and then put another one in the same place as the first.
He was something else. I would rather dodge a bullet at 100 yards than try to bat against Gibson if he was pissed off that day.
Are you implying that the Federal budget is not a mess today? Oh, silly me. We don't have a Federal budget today!!!! Oh, my goodness.
Where do you guys get your talking points?
By the way, I'm just curious. If you guys are actually "socialists" and I doubt you are, the why would you be participating in the stock market--which is a capitalist tool to dupe the masses into thinking they have a chance of escaping their mundane lives.
Isn't the stock market run by crooks and thieves who are taking your money? Wouldn't we be better off, I mean as socialists now, having all business be nationalized?
Then we wouldn't have a stock market that preys on the emotion of the masses and instead we would have a controlled economy where everything is equal.
A trophy for everyone who tries out for the team!
Yeah, I don't understand why anyone would be opposed to that. I mean think of it. No one would have a nicer house, car, boat, clothes education than you would have. (Except for the politicians).
The government would decide where you live, where you work, what career you will have, what kind of car (if any) you will drive, how many kids you can have, and will provide for all your needs both physical and spiritual!
What a great system that is! I mean instead of you and me having to try to better ourselves in life, someone else will do it for us--and the only people who won't be just like the rest of us will be our leaders. I mean, they deserve better because of all the responsibilities they have.
I can remember sponsoring a Polish family to come to America back in the 80s'. After a year here they wanted to go back to Poland because there, they did not have to make so many decisions. Here, everything required a decision. Do they buy the ribeye or the sirloin? Do they drive a Honda or a Ford? Do they use a GP or an internist? Do they get generic or name brand drugs? Do they study engineering or history at university?
Now, that's what I want. A world where someone else is making all the decisions for me. Because I know they will always have my best interest at heart. After all, people are good by nature aren't they? I mean Stalin killed those people because they were "dissidents". Same with Che. Same with Pol Pot. Same with Mao.
Should You Delay Social Security Benefits? [View instapost]
Like you, I worry how long I am going to live. However, I am planning on living "forever" (dellusional of course!)
Dave
Should You Delay Social Security Benefits? [View instapost]
As I get closer to decision time, I am spending more time looking at the ins and outs of SS.
Dave
Should You Delay Social Security Benefits? [View instapost]
Don't ignore the fact that depending on your income, SS benefits are taxable. If you are drawing SS and still working at age 62, you will have up to 85% of your benefit be taxed. There is a 15% exclusion to Federal taxes.
Dave
Should You Delay Social Security Benefits? [View instapost]
One thing that I am aware of is the impact of delaying SS benefits. For me, being 64, I could have begun taking SS at age 62. My full retirement age is 66.
At age 62, I would have received a SS benefit which would have been around $1800 a month, based on my contribution history and the formula that SS uses. However, by waiting to collect Social Security, my benefit increases each year until age 70, when the maximum benefit is "earned."
Now, at age 70, I would draw a little over $3000 a month. That is quite a difference from the benefit at age 62. Now, since my wife works and has just gotten a major promotion in her career, out income with her working and me working will go up significantly next year.
That being the case, working the additional two years (until I reach 66) would make sense as we would be able to continue funding our retirement accounts with the new money from her raise. That would allow us to shelter the increase in her income from current taxation, put that money into tax deferred accounts and we would not miss a beat with our life-style as our take home income would remain consistent with this year's income.
Now, at age 66, I could begin to draw dividend income from my retirement accounts to supplement our household income; we would back off on contributions of her raise to my retirement accounts, but continue to fund hers at an accelerated rate; I would hold off on drawing SS and allow my own retirement accounts to continue gathering dividend income that is being reinvested back into my holdings.
There would be no RMD for my accounts until reaching age 70 1/2 which is ok. What I could do is take the RMD to satisfy the tax man, have the $3000 a month in SS benefits, and then take money from the RMD that I don't need and channel that back into my wife's Roth and or to my children's Roth accounts to have theirs be fully funded each year.
Anyway, going to have to sit down with the CPA and the attorney to determine what is the best course of action, but for now, I am leaning toward the delaying of SS benefits until age 70.
Dave
If You Must Invest In Tobacco [View article]
Don't know if you are addressing me. You didn't say "@" so I will assume.
I wasn't supporting or criticising the author of the story. I was addressing your statement: "give the employees a raise."
I was trying to educate you about the convenience store business model.
Now if this guy owns a bunch of stores, and he leases them out to others who operate them, then he can't give anyone a raise, because the guys leasing the stores are the ones who hire and pay the employee.
What happens is that the guy who owned the store in the first place sees that life is simpler and more profitable if he rents the store to some other schmuck (hey, I'm half Jewish) to run it. That way, he owns the store, gets rent, and none of the hassles of running it. The guy leasing the store is the one who just bought a minimum wage job.
I've been working with convenience stores since 1984 and am very versed in their business model--because that's my job and what I do for a living. I sell food service solutions to convenience stores--I have to know their business in order to have any credibility with the owners.
But, whatever. You don't need to take things so personally. It's just a blog site, after all is said and done.
Dave
How Much Will I Need To Retire? [View article]
Where I get frustrated is when people play the victim card. Hey life is about being born and then dying. What you do with things between those two points is really up to you as an individual.
I have three kids. They have been taught to not have a lazy bone in their bodies. I have three kids that are all very much capitalists who have money, invest their money and it doesn't matter if we what politicians do.
My CPA and my estate lawyer are gifted folks that can figure out how to take advantage of every opportunity and avoid taxes. That's what I pay them to do and they earn every penny.
I'm not offended at all. I was pointing out that the politics of the country are somewhat irrelevant to the process of making money and having a better life.
My cattle business is very prosperous and I have to jump through all kinds of hoops with the government to raise cattle for resale to market. That's a price of doing business. If and when the cost of doing business exceeds my profitablitity, I will find something else to do that interests me.
Everyone needs to do the same thing, in my humble opinion. Find an opportunity, invest in that opportunity and make money. The opportunity is all over the place.
My son started cutting lawns back when he was in high school to make money. Now he has a landscapping business that grosses almost 500k a year and employs six people. He is branching out into growing his own plants for resale (commercial nursury) and that business already has contracts with Home Depot and Lowe's.
Cha-ching.
As for politicians. They exist for one purpose. Power. Doesn't matter what side of the table where they sit. They are just driven by ego and greed. I won't let them stand in the way of my making money, plain and simple.
Dave
If You Must Invest In Tobacco [View article]
Most of the stores I work with have very sophisticated inventory management systems. I actually have one guy that put in a scanner system and he was showing it to me. He told me that one Wednesday, for example, he sold 100 newspapers.
He has inventory entered into the system and every time a item is scanned, it depletes the inventory. When new product comes in, it's scanned and added to the inventory.
When he does an audit, he can tell how much shrinkage he has. He does that at the end of each month with---scanners.
Dave
If You Must Invest In Tobacco [View article]
Employee theft is a built in cost factor for most stores. We take steps to prevent employee theft, but it's going to happen, for a number of reasons.
Some people think that they are being screwed by the store owner because they are not making a lot of money. Some people thing that the store owner is some rich guy who deserves to be stolen from, since "he can afford it."
The average non-chain convenience store has inside sales in the neighborhood of $60k a month. That's gross income minus gasoline, which they do not make any money on.
Now out of that $60k of revenue, they need to pay labor, fringe benefits, rent, utilities, replenishment of inventory, taxes, and license fees.
When all is said and done, the store might be keeping 5-10% of that 60k as "profit." At 10%, that means that the owner might have $72 grand at the end of the year. Now if he uses that for income, then there is no money to reinvest in capital improvents like expanding the store, putting in new gas pumps, increasing the beverage cooler size, or in to maintenence like replacing the roof, replacing air conditioning and heating equipment, or adding food service.
If he keeps the money as wages, then there's federal and state taxes to pay, social security and medicare taxes (both employer and employee parts), and that doesn't leave a lot.
Basically, the guy or gal who owns one store is working for minimum wage by the time all is said and done.
If You Must Invest In Tobacco [View article]
I am of the opinion that more people can find a reason NOT to own a stock than they can find reasons TO own it.
Look at a company like GE. People hate Immelt, so they won't buy GE. I loaded up the truck when it was selling under $15 a share. I don't give a rat about Immelt. What I like is the fact that the company is changing direction and focusing on core products. It was a steal under $15.
WFC and JPM are two companies that I have invested heavily in. While they are not considered DG stocks at this point in time, they were priced at a value to worth back in 2011. I bought JPM under $30 a share and WFC under $25. Why? Because they were priced at incredible bargain pricing.
But people HATE the banks. What evil people, what terrible business models etc. etc.
I look at it this way. I am in the stock market for two reasons--same as I am in the real estate and cattle producing markets--to make money.
I don't care who's the CEO is or what kind of a guy he is. It's the managers of the various divisions that are running the company. With tobacco? Hey, as a former smoker, I can appreciate the dynamics of their business. They make a ton of money, pay out dividends that are fantastic, have a history of paying those dividends and I will invest there for my basic goal--making money with my money.
Dave
If You Must Invest In Tobacco [View article]
I'm not sure where they are going, but they are going. I think that a lot of the newer folks coming here to comment (look at their comment count) have come here from Yahoo boards and other places and they add nothing to the conversation. Instead the level of snarky comments about government, socialism, right wing, left wing, conspiracy theories about big business and big banks, etc. etc. have helped to turn this site into something that has been rapidly deteriorating.
I don't submit articles anymore. I am tired of having them being rejected because they are "more like personal finance atricles and our readers are more sophisticated than that" editorial comments.
Instead I am using the blog provided as I can write about things that are important to me and not have to manufacture charts and graphs to make a point--especially when no one seems to be reading anything other than the headline and commenting on that.
But I've found that many of the old stalwarts have all but gone silent and instead this site is being visited by people who have little or no understanding about how markets work or how to go about successful investing.
I comment, because I like to challenge some of the comments that are coming into the discussion--but most of my responses are being deleted as offensive.
Meanwhile the original offensive comment remains in place.
I've also noted that a few old timers are beginning to major in the minors. One in particular has gotten a bug about "earnings." and uses every opportunity to point out how the article is "flawed."
Anyway, this is what I know. I've made a lot of money investing in stocks over the last 30 years. My portfolio has grown exponentially in value and in dividend income.
Is it because of a bull market? Not really. I've been investing in bull markets and bear markets. I buy quality and I accumulate shares in much the same way that a mutual fund manager or any other professional manager does.
When someone like Buffet or Yacktman purchase stock in a particular company and then adds to their position, they are averaging up because they believe that even at the higher price of investing today, they can and will make money.
Yet that notion of buying stocks at current prices is ridiculed, because "we are at all time highs!" Well, here's a news flash. Three years ago, people were saying the same thing.
Money sitting in your pocket is earning nothing. Having a substantial sum of money parked on the sidelines is money that is not working for you. When you own a particular stock at a $30 cost basis and that same stock is selling today at $60 a share and the earnings continue to grow and the metrics for that company are still good, purchasing additional shares will serve you well.
But, hey, I need another cup of coffee.
Dave
Frontier Communications - A Light At The End Of The Tunnel [View article]
He was something else. I would rather dodge a bullet at 100 yards than try to bat against Gibson if he was pissed off that day.
Dave
How Much Will I Need To Retire? [View article]
Are you implying that the Federal budget is not a mess today? Oh, silly me. We don't have a Federal budget today!!!! Oh, my goodness.
Where do you guys get your talking points?
By the way, I'm just curious. If you guys are actually "socialists" and I doubt you are, the why would you be participating in the stock market--which is a capitalist tool to dupe the masses into thinking they have a chance of escaping their mundane lives.
Isn't the stock market run by crooks and thieves who are taking your money? Wouldn't we be better off, I mean as socialists now, having all business be nationalized?
Then we wouldn't have a stock market that preys on the emotion of the masses and instead we would have a controlled economy where everything is equal.
A trophy for everyone who tries out for the team!
Yeah, I don't understand why anyone would be opposed to that. I mean think of it. No one would have a nicer house, car, boat, clothes education than you would have. (Except for the politicians).
The government would decide where you live, where you work, what career you will have, what kind of car (if any) you will drive, how many kids you can have, and will provide for all your needs both physical and spiritual!
What a great system that is! I mean instead of you and me having to try to better ourselves in life, someone else will do it for us--and the only people who won't be just like the rest of us will be our leaders. I mean, they deserve better because of all the responsibilities they have.
I can remember sponsoring a Polish family to come to America back in the 80s'. After a year here they wanted to go back to Poland because there, they did not have to make so many decisions. Here, everything required a decision. Do they buy the ribeye or the sirloin? Do they drive a Honda or a Ford? Do they use a GP or an internist? Do they get generic or name brand drugs? Do they study engineering or history at university?
Now, that's what I want. A world where someone else is making all the decisions for me. Because I know they will always have my best interest at heart. After all, people are good by nature aren't they? I mean Stalin killed those people because they were "dissidents". Same with Che. Same with Pol Pot. Same with Mao.
We can't have free thinkers in our midst.
How Much Will I Need To Retire? [View article]
The governernment doesn't influence the stock market. It runs on emotions. Right now it's running on "greed."
When you have a government pumping 85 billion dollars a month into financial markets, though, it surely doesn't hurt.
Dave
How Much Will I Need To Retire? [View article]
Really? Is that necessary? Do we have to respond in a negative way to comments we don't like and be just as silly as the original commentator?
I don't really like the Left or Right wing. I'm more of a breast man myself....
Dave
How Much Will I Need To Retire? [View article]
Dave