Mainly directed at the self employed, but all input welcome.
We're LLC 's' corp, and I started looking into a SEP. We're a partnership, and I am paid about $25k on W2 from 'the business' - I'm going to run this past our CPA but am pretty sure we can contribute to this vehicle.
Goal is to exceed the $5-6 k limit each in the current 401k/ROTH plans we have, which are split - one third of the limit to ROTH, 1 third to 401k. Each - that is.
I'd be happier with about $12k total - $6k SEP, $4,500 401K, $1,500 Roth.
We left ODFL with $140k odd in each, in 2015, and didn't contribute anything until 2021, after 8 years owner operator, with Gretchen not working, balances are at about $180k 401K, and $8k Roth (Again - figures are the same for both her and I).
Last year as we all know was disastrous for retirement accounts, and had me wondering if buying 10-50 acre agricultural/rural sections, and paying on a mortgage for them, would be better than sinking money into retirement plans where gains were not to be found at all. Land - undeveloped, seems to consistently gain in value, with little expense. Property taxes are reasonable, and land can be rented for pasture or crops enough to offset the taxes and a little on the mortgage interest.
House/vehicles/equipment is paid for - but you always need a roof overhead and tools to generate revenue, so I never view net worth of assets as anything productive for passive income. We had residential rentals but sold them due to a long term dismal outlook on returns vs. risk in our area. And having become tired of feeling like a welfare provider most times. That money just sits there being eroded by inflation, hence my interest in land purchase as a safer haven for loose cash.
I don't really see retirement, unless I simply become too weak to work for whatever reason, so intend to do so as long as I can.
I played with the ssa.gov numbers, and it's clear that doubling the current wages we pay SET on has minimal effect on projected SS income - about $150/month , and simply delaying withdrawal from the program (if it still exists 20 years from now) generates a far higher monthly number.
Just wondered what everyone else in a somewhat similar situation, either now or in the past - has elected to do for savings/retirement.
P.S. - Just watched that Bernie Madhoff documentary, and yeah - not interested in anything like that. You can keep your cryptocurrency too.
SEP IRA and retirement in general
Discussion in 'Trucker Taxes and Truck Financing' started by blairandgretchen, Jan 29, 2023.
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I’m just glad you put a option up that I could vote on.The_vett, cke, OLDSKOOLERnWV and 1 other person Thank this.
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I have a sep,but with the market I’m only putting $100 a month in right now.The_vett, cke and blairandgretchen Thank this.
D.Tibbitt Road Train Member
- Apr 26, 2013
If your goal is to invest in long term without taking money out in the near future...another option is you may look into investing into a REIT (real estate investment trust)... in laymens terms what it is, is basically you give money to an investment company who specializes in real estate and they pool all this money together(for lack of a better term) to invest in different real estate properties , while they pay you dividends every quarter, as well as any appreciation when those properties are sold off...it not a bad investment if you find the right company.. a downside is some companies make you hold your capital investment for 5 years before you can liquidate it.. you can reinvest the dividends every quarter or cash them out... there's alot of research you can do with it and see what works for you...
investing money in some dividend paying stocks is not a bad idea either if you are looking for long term investment where you are paid a dividend every quarter... i think the main thing to keep in mind (im not sure how old you are) but for someone like me thats younger than 30, in an IRA, if you withdrawal any money before you are 60 years old, there is a 10% (IIRC) penalty...so i typically dont invest any money in them because that's along time to not be able to touch my money, but may work out for you if you are closer to that age... you can also use that IRA to invest in a REIT like i mentioned, or really any other investment you would like to put money into... theres alot of things to invest in and make your money work for you rather than the other way around..
I had about 100k invested in the stock market and forex market, trading in and out of it every once in a while.. and had some dividend paying stocks as well as some bonds paying around 7%... i cashed out all of it to go all in on my own authority and have lost most of it... some people think investing is to much risk but it's just as easy to go broke in trucking....really the possibilities are endless for what you can invest in. don't limit yourself to just stocks or bonds or precious metals or real estate. I find it very challenging but just as rewarding as running a business, when you are able to find success.
disclaimer this is not financial advice - do your own research.
Much of my adult working career prior to becoming an owner op is covered by a pension, but I also participated in a company 401k from the age of 19. The majority of my current retirement money goes by auto draft weekly into several fairly aggressive mutual funds in my Individual 401k. I choose the Roth for my portion and the company contribution has to be on the traditional side. I also did the Roth IRA until recently. I typically don’t do single stocks but when I was at Buster Brown they gave us a 10% discount so I bought all I could afford.Last edited: Jan 29, 2023
I can see the math in it, but it's depressing to see what you invest either stagnate or dwindle in the current (short term view) market.
The REIT piqued my interest a couple of years back - basically a 'hands off' approach to real estate investing. Some of it came when a flood of communications came when I listed one of the rentals, and when I got to a person that could explain it - revealed a shift in rental management.
Morally it didn't appeal to me, but, like said - we felt like welfare program participants when we owned rentals and held the belief we were contributing to a community in offering decent quality , affordable rentals. There's only so many years you can withstand renovating houses unnecccesarily due to (even well vetted) tenants.
I'll have to look further into this one.
I recall a guy we met at ODFL - back in 2010 - he was retired from YRC after 20 years, wanted to keep working, and said he received $2k monthly from his YRC pension and the stipulation was that he no longer worked for YRC (or union company? I forget) to receive it. So he earned $4k plus at ODFL and his $2k pension, and was close to drawing SS.
I guess these are first world problems.
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