Just added 50% to my position at 29.37. Not terrific prices, but in the lower percentiles for the rest of the div cycle.
These will be keepers, too. They're in a Roth, so the divs will be pure, untaxed ROI. Survive 6 quarters and the stock pays for itself. With reinvestment it doubles every 12-13 months. Then pay nothing for the privilege of spending it. What a country!
And another tranche, at 29.2393 (gotta love the robo-chiselers on the book). Gross basis sitting about 29.35. Still have order open at 29.03 for anyone who wants to sell there.
Thanks for that clarification. I would not have a clue as I have been self employed most of my life.
This board is the best.
Our PBS network has been featuring a retirement investment shager telling everyone, like the full service borker-age pirate ships, to switch their trads to a roth. So my wife comes to me with a great idea to do the switch. I said I thought the trad would outperform our tax liability.
The trad IRA is better because you expect future tax rate to be lower than current tax rate. If your marginal tax rate in retirement is as high as your marginal tax rate now, then you've done a bang-up job of planning for retirement. Most of us will drop a bracket or two and will get a benefit from deferring our taxation until then.
The only reason to open a Roth IRA if you have a trad IRA is because you're not allowed to contribute anything to a trad IRA if your workplace has a retirement plan (401k or similar). But you can still put money in a Roth. So it makes sense to use the Roth to tax-protect the gains on money you'd have in a savings account or a taxable brokerage account anyway.
I have not done the nums in my compounding worksheets, but wondering if the upfront hit you take in opening a roth is a handicap in growth.
The question is: Will the enhanced growth in a traditional IRA outgrow your future tax liability?
So In 2025 you will be distributing the same fraction from a larger cake and does that fraction minus your tax liability equal more or less than your tax free fraction from a much smaller cake?
Part of the answer lies in your taxbracket. Your roth contributions get a 15-35% handicap. That is eqaul to or greater than your dividends.