4.23.2022

Quotations from Chairman Varones

 Inflation is progressive utopians encountering resource constraints for the first time.

4.08.2022

Taxable brokerage vs. traditional 401(k) account

The common wisdom says pre-tax 401(k)s and IRAs beat taxable accounts hands-down. But it's not so clear to me. If you put buy-and-hold stocks or index funds in a taxable brokerage account, it's actually remarkably tax-efficient because of the ability to defer capital gains, and the preferable tax rates on dividends and capital gains.

Here's a spreadsheet where you can play with the assumptions (you'll have to make a copy for  yourself to edit): link

Yes, traditional beats taxable in simplified base case, but this ignores:

  • tax loss harvesting 
  • HIFO withdrawals 
  • foreign tax credits
  • higher potential future tax rates
With the federal government running perpetual deficits of 3% - 5% of GDP, is it really out of the question that tax rates on wealthy retirees could hit 37%? That's about the point where taxable beats pre-tax even before considering HIFO and tax loss harvesting.

Mmmkay....

President who usurped Congressional spending authority to issue an executive order handing out hundreds of billions of dollars right before ...