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Today's stock market decline is brought to you by the "inverted yield curve"


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43 minutes ago, Massdriver said:

Some 401k plans have a Roth component. However, matching programs are better than Roths. You can't beat doubling your money right off the bat; plus you get to deduct the savings from your taxes.

 

What do you mean by deduct the savings from your taxes?

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3 hours ago, Amazatron said:

Roth IRA >> 401K because your withdrawals are tax-free (money is taxed going in).  Really the main benefit of 401K is if your company has a good matching program.

Really depends on a host of factors unique to each individual.

 

Generalized comments like this make me a little queasy since there are so many nuances which can impact the financial calculus for each family.

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1 hour ago, Massdriver said:

You’ll take home less money, but if your employer matches, it is a good deal if you can manage to afford it.  Your ira contributions won’t be matched. 

 

No I understand most things about how a 401k work. It's just I don't get this idea that the money is taken pretax, but you can also deduct at the end of the year as well. A client of mine had mentioned that last week and it confused me.

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1 hour ago, Jose said:

 

No I understand most things about how a 401k work. It's just I don't get this idea that the money is taken pretax, but you can also deduct at the end of the year as well. A client of mine had mentioned that last week and it confused me.

You can't deduct if you are putting your gross income (rather than net) in. That is equivalent to deducting at the end of the year.

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10 hours ago, Jose said:

 

No I understand most things about how a 401k work. It's just I don't get this idea that the money is taken pretax, but you can also deduct at the end of the year as well. A client of mine had mentioned that last week and it confused me.

The 401k contribution is taken from your paycheck before taxes are duducted. Therefore lowering your taxable income. When you file your taxes you specify this on your w4 based on your W-2 which will state the contribution amount. You pay taxes on it when you take the money out in retirement.

 

 

 

So you're not deducting it twice, when you file your taxes it will snow your gross income and the taxes you paid, which will be lower than they should be and therefore you will owe money. You there report your 401k contribution so you're not taxed on that portion of your income - bringing your taxable income in line with the taxes you've been paying over the year.

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Quote

 

Nonfarm payrolls jumped by 312,000 jobs last month, the largest gain since February, as employment at construction sites snapped back after being restrained by unseasonably cold temperatures in November.

 

There were also broad gains in hiring last month. Data for October and November were revised to show 58,000 more jobs added than previously reported. The economy created 2.6 million jobs last year compared to 2.2 million in 2017.

 

Average hourly earnings rose 11 cents, or 0.4 percent, in December after gaining 0.2 percent in November. That lifted the annual increase in wages to 3.2 percent, matching October’s rise, from 3.1 percent in November. The average workweek increased to 34.5 hours in December from 34.4 hours in November.

 

The unemployment rate increased to 3.9 percent from a near 49-year low of 3.7 percent in November as a strong labor market pulled some 419,00 jobless Americans from the sidelines.

 

https://www.reuters.com/article/us-usa-economy/robust-employment-report-underscores-u-s-economic-strength-idUSKCN1OY0AU

 

This is a pretty strong report. I doubt it will be as strong in January with the shut down and China uncertainty growing.

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1 hour ago, Jason said:

 

1 hour ago, Jason said:

Uh oh

 

 

Kudlow isn't exactly known for getting these things right. :s

 

The 90s one is hilarious, but the one I remember from 07 which the marketwatch link talks about is always the one I hold over him.

 

"And Kudlow has made some enormous and stupendously bad calls. In the fall of 2007, when the housing and stock markets were collapsing, he downplayed it, writing in National Review that, “Despite all the doom and gloom from the economic pessimistas, the resilient U.S economy continues moving ahead quarter after quarter, year after year, defying dire forecasts and delivering positive growth.” Looking ahead to 2008—when the entire U.S. economy came crashing down and millions of Americans lost their jobs, and banks, automobile makers and mortgage lenders had it be bailed out to the tune of hundreds of billions of taxpayer dollars—he said “we are about to enter the seventh consecutive year of the Bush boom.”

Anyone who thinks otherwise, he added with flair, “are going to wind up with egg on their faces.”"

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